Lawmakers criticize draft weakened oil and gas regulations

A proposed bill to control the cumulative impacts of oil and gas drilling is drawing criticism from lawmakers and environmental advocates because Colorado state regulators have watered it down to accommodate industry demands.

At issue is a draft of cumulative impact rules written by the Colorado Energy and Carbon Management Commission in August. Compared to a draft from June, the draft contains at least 17 changes, all of which reduce or limit oversight, according to an analysis by lawmakers.

“The current draft deviates significantly from the intent of the laws we campaigned for. It jeopardizes the protection of disproportionately affected communities and gives operators great scope to exceed pollutant limits,” 24 state parliamentarians said in a letter to the ECMC.

Lawmakers have passed several bills directing the commission to develop cumulative impact rules, limit their impacts, and protect disproportionately affected communities, including Senate Bill 181 in 2019, House Bill 1294 in 2023, and Senate Bill 229 and House Bill 1338 in 2024.

“It is a shocking retreat from the essential protections that were included in the June bill,” said Rep. Elizabeth Velasco, a Democrat from Glenwood Springs and a sponsor of the Cumulative Impacts and Environmental Justice Act. “The agency has prioritized industry over public health and safety.”

Kelsy Been, a spokeswoman for the ECMC, said in an email that “the commission appreciates the legislators sharing their views” and that the letter “will become part of the legislative record. A public hearing on the draft will begin on September 3.”

“The Commission is committed to carefully reviewing all feedback and ensuring that the final rules are consistent with our mission (and statutory requirements) to protect public health, safety, welfare, the environment, wildlife resources, and disproportionately impacted communities,” Been said.

Many of the changes in the August draft addressed issues raised by oil and gas operators and industry groups in submissions and comments to the Commission on the June draft.

Chevron Corp., Colorado’s largest oil and gas producer, said in a letter that it supports “the thoughtful staff revisions” that will provide the industry with “additional clarity on the standards that will apply to operations.”

Four other operators and three industry associations also expressed their support for the August draft.

“This rulemaking is taking place in a sea of ​​other mandates and rules,” said Kait Schwartz, director of the trade group API-Colorado.

The ECMC, for example, just finalized a regulation on wildlife impacts, and the state’s Air Pollution Control Division has issued new regulations to address emissions. “We need to look at this cumulatively with all of our other work,” Schwartz said.

But environmental and civic groups say it’s just business as usual. “This is more or less 60 pages of new rules that don’t fundamentally change what’s happening in Colorado,” said Kate Merlin, an attorney for WildEarth Guardians.

The June draft laid down conditions under which a permit for a new drilling could be refused or under which the Commission would have to intervene if sector-wide pollution targets were exceeded. This wording has either been revised or deleted.

“Industry will never agree to rules that protect the public by denying permits outright, and the commission must accept that,” said Heidi Leathwood, climate policy analyst for the environmental group 350 Colorado. “Rules don’t have to be popular with industry.”

In their letter, the legislators urged the ECMC to consider revising the rules again, even though it is still legally obligated to complete the rulemaking process.

“I would rather have strong rules that protect the community than rush something through,” said Senator Faith Winter (D-Westminster), sponsor of two bills that direct the commission to look at the cumulative effects of pollution.

Disproportionately affected communities reclassified, status downgraded

Among the biggest changes is the shift from assessing impacts for the legally defined disproportionately affected communities to a new designation of “cumulatively affected community.” Disproportionately affected communities are those with low incomes, communities of color, vulnerable populations, or disproportionate environmental impacts.

However, designation as a cumulatively affected community (CIC) would limit the assessment of affected communities to communities that score 80% or higher on the state Department of Health and Environment’s EnviroScreen tool, which assesses risks and impacts for DI communities.

“DI communities make up as much as 50% of the state,” said API’s Schwartz. “In our view, this is not the best way to find out who is affected by emissions… using EnviroScreen is more accurate.”

However, this means that the cumulative impact assessment is limited to about one-fifth of the state’s disproportionately affected census tracts.

“This term is counterproductive to environmental justice and only serves to weaken protections for affected communities,” the lawmakers said in their letter. “No new oil and gas production occurs in CICs – in fact, no oil and gas permits have been issued in a CIC for at least 5 years.”

The August draft would also limit the assessment of cumulative impacts to a one-mile radius around the proposed drilling site. “That’s three square miles … a wide swath of land,” Schwartz said.

The one-mile limit would not take into account the spread of wildfires or regional ozone pollution, said Mike Freeman, an attorney with Earthjustice, which represents the environmental groups Green Latinos and Earthworks.

For example, Civitas, one of the largest operators in the state, has four drilling platforms planned in the same area, but each one is a little more than a mile apart. The cumulative impact of all four is not assessed. There are only four separate cumulative impact analyses,” Freeman said.

“The key takeaway here is that the decisions in these cumulative impact rules are not based on the total level of cumulative impact,” Freeman said.

Another controversial change was the removal of the requirement that oil companies seeking to drill in disproportionately affected communities within 600 meters of residential homes must obtain permission from those residents.

In its statement before the hearing, Chevron said the rule “would essentially prohibit the development of new oil and gas reserves within the DICs … and should be eliminated in its entirety.”

The ECMC draft is based on the nitrogen oxide, NOx and greenhouse gas intensity rules set by the Air Pollution Control Division. The intensity rule limits emissions per barrel of oil produced.

In the June draft, the ECMC director could deny a permit if an operator was “likely to exceed its NOx and greenhouse gas intensity targets.” In the August draft, a drilling company only had to demonstrate that it met the previous year’s standards.

Eight counties – Arapahoe, Adams, Denver, Boulder, Broomfield, Douglas, Jefferson and Weld – and part of Larimer County violate federal health standards for ozone pollution.

Ozone, a corrosive gas, is created when nitrogen oxides and volatile chemical pollutants mix on hot, sunny days. Ozone levels are highest during the summer months. As of August 7, there have been 42 days with ozone warnings this year.

The oil and gas industry is the largest single source of NOx in the state, and the June draft included a condition of approval that no drilling or fracking would occur in the noncompliance areas between May 1 and September 30 unless an exception was approved.

The August draft allows summer drilling and fracking as long as steps are taken to mitigate the impacts.

“The remaining profitable part of Colorado for industry is the Denver-Julesburg Basin. That’s where most of the people live. And we’re seeing the ECMC approve hundreds of wells in an area where ozone levels are not being met,” Merlin said.