Setting the Record Straight on Denver Post 90-Day “Loophole” Story
Anti-fossil fuel activists have been spinning a tale for months that oil and gas companies can spew “toxic air pollution” into the air for three months without consequence.
The short answer is no: the claim only takes into consideration “permitting” and does not account for Colorado regulations. For example, truth is, there is no “loophole” or 90-day exemption. A comprehensive regime exists to control emissions from storage tanks and other equipment from the first day of production.
But the activist group WildEarth Guardians has longtime ally U.S. Rep. Dianna DeGette calling this a “loophole” in state regulations. EID has tracked reporter Bruce Finley’s work at the Denver Post in the past, noting that substantive materials are often omitted or avoided. In this case, the context of the work and efforts companies make to address concerns – and take steps to prevent those concerns altogether by exceeding regulatory requirements through technology and other industry-leading procedures – is never mentioned.
Let’s dive into this story and set the record straight.
#1 What Industry Is Already Doing: Innovative Approaches That Emphasize Technology Over Regulation
According to the Colorado Oil and Gas Association, the state’s air quality has drastically improved over the past four decades, with the fewest poor air quality days in 2018, even as overall oil and natural gas production has increased tenfold. That includes volatile organic compound emissions dropping by 45 percent between 2011 and 2017, while oil production quadrupled. A combination of the most recent regulations—Colorado’s are among the most stringent in the country—and advancements in technology have led to the reduced emissions, according to the Regional Air Quality Council and the Colorado Department of Health and Environment.
Among the rules enacted in 2014 is the regulation of methane emissions from oil and natural gas production, implementing comprehensive leak detection and repairs, and expanding control and inspection requirements for storage tanks to ensure tank emissions are captured and routed to the required control devices. There are no shortcuts or “loopholes.”
Companies like Anadarko Petroleum, Extraction Oil and Gas, and Noble Energy have adopted various types of innovative technology and best practices that have been put into place over the past few years, including tankless development. Using tanks only for water storage, oil and natural gas is piped directly for processing or treatment, eliminating emissions at the source while also reducing truck traffic.
Many of these companies deploy best-in-class development tools and innovations to reduce impacts, such as electric drilling rigs and quiet completions fleets, sound and visual mitigation, closed-loop engineering so that facilities fall below the permitting threshold for an air permit from CDPHE, pipelines instead of traffic and other emissions, and no permanent oil storage tanks. This includes implementing a system that does not require air permits for oil or water tanks, truck loading, facility combustion engines, and any additional fugitive emissions falling below CDPHE thresholds.
Even a brief examination of the companies’ efforts shows a much different narrative of technological innovation, responsiveness to concerns, a willingness to exceed regulations technologically or through best practices that avoid emissions altogether, and compliance with the current regulatory framework in all other cases.
#2 Activists and the Post Ignore Colorado Regulations
Activists and the Denver Post focus on the permitting process without accounting for the entirety of Colorado regulations. Colorado regulations—the state, like many others, through its EPA-approved State Implementation Plan (SIP), allows operators who are dealing with uncertainty in forecasting oil and gas production from new wells and the potential emissions that could result, to gain coverage under a general construction permit. Yet the regulations currently in place do not allow blind, unaccountable emissions.
From the first day of drilling, companies are required to implement various best practices, such as green completions, and install vapor recovery systems or combustion devices to capture and control emissions from storage tanks and other production equipment. These control devices shall operate between 95% and 98% control destruction, depending on type, to minimize the potential emissions of VOCs in nonattainment areas including hydrocarbons like methane.
To require an air emissions permit before drilling commences or to forecast future emissions would likely require a regulatory change by the state, subject to approval by EPA. The federal Clean Air Act gives states flexibility in their state implementation plan, so DeGette calling this approach a “loophole” is problematic at best and does not reflect the reality of what it takes to comply with stringent regulations.
Here’s a small section of how things work:
State Regulation 7 (Control of Ozone via Ozone Precursors and Control of Hydrocarbons via Oil and Gas Emissions, adopted 11/15/18, effective 01/14/19), and in particular Section XII.D.1 is part of Colorado’s SIP. It is a state-only regulation, requiring 95 percent control of storage tank emissions during the first 90 days after production, as here in XII.D.1:
“(State Only) New and Modified Condensate Tanks
“Beginning February 1, 2009, owners or operators of any new or modified atmospheric condensate storage tank at exploration and production sites shall collect and control emissions by routing emissions to and operating air pollution control equipment pursuant to Section XII.D. The air pollution control equipment shall have a control efficiency of at least 95%, and shall control volatile organic compounds during the first 90 calendar days after the date of first production after the tank was newly installed, or after the well was newly drilled, re-completed, re-fractured or otherwise stimulated. (emphasis added)
Section XII.D.1 applies to ozone nonattainment areas and only to VOCs, while XVII.C.1.c applies statewide and to all hydrocarbons, including methane:
“XVII.C.1.c. Control requirements within ninety (90) days of the date of first production.
“XVII.C.1.c.(i) Beginning May 1, 2014, owners or operators of storage tanks at well production facilities must collect and control emissions by routing emissions to operating air pollution control equipment during the first ninety (90) calendar days after the date of first production. The air pollution control equipment must achieve an average hydrocarbon control efficiency of 95%. If a combustion device is used, it must have a design destruction efficiency of at least 98% for hydrocarbons. This control requirement does not apply to storage tanks that are projected to have emissions less than 1.5 tons of VOC during the first ninety (90) days after the date of first production.” (emphasis added)
The rules allowing operators to submit Air Pollutant Emission Notices (APENs) and permit applications 90 days after first production are found in Reg 3, Part A § II.D.1.lll (APEN deadline) and Part B § II.D.7 (permit application deadline). These parts of Reg 3 are part of Colorado’s SIP, which EPA approved at 40 C.F.R. 52.320.
#3 WildEarth Guardians Anti-Fossil Fuel Agenda
The anti-fracking activist WildEarth Guardians has a long history of spreading misinformation about Colorado’s oil and gas development, as chronicled by EID. The group’s Climate and Energy Program Director Jeremy Nichols said in a statement announcing potential litigation in February:
“The oil and gas industry is willfully violating our clean air laws at a massive scale along Colorado’s Front Range. With our health at risk, we can’t afford to let fracking companies keep trouncing our clean air.”
In the Post, Nichols alleges “substantial” problems but offers little evidence:
“It is hard to fully quantify the harms to our air and our health, but based on what we know of the problem, they are substantial. The industry is developing massive multi-well facilities that have the potential to emit tens of thousands of tons of VOCs — yet operating with no permit and no meaningful assurances that they are meeting any level of emission controls necessary to protect clean air.”
But as Nichols recently tweeted, the ultimate goal of his organization is not regulation, but a complete ban on any oil and gas production:
— Jeremy J Nichols (@JeremyJNichols1) April 8, 2019
Nichols doesn’t want compliance—with permits or with currently standing regulations, as he makes clear — but a complete end to any production.
#4 Concerns Raised by Public in the Story
Two residents in Berthoud highlighted in the story, Janis Butterfield and Stephanie Nilsen, filed complaints with the Colorado Oil and Gas Conservation Commission on November 20, 2018, for dust, noise, and property damage.
The first complaint of dust was assigned to COGCC staffer Jason Gomez, who responded a week later. According to the complaint against Extraction Oil and Gas, at the Trott location in Weld County, “dust was out of control. Had pregnant mare, could not see her at times due to the thick dust between us (sometimes all day into the night).” In response, Gomez wrote,
“I performed a complete inspection of the location, I found no dust or opacity issues as described in the complaint.” (emphasis added)
Butterfield and Nilsen also alleged noise violations. “Possible violations pertaining to noise: [June 2017] Please be advised to the vibrations being experienced at my home. This vibration has been occurring for the last 4 days being experienced around every 5 – 10 mins during day and night,” they wrote. Gomez responded,
“I did not perform a sound study as heavy industrial operations suspected to be the source of the noise have since ceased.”
The final allegation, of property damage, disruption of breeding season for the horses, and a loss of pay, found the well nearest the complainant “shows compliance.” Gomez and field inspector Adam Kraich responded:
“No violation of COGCC rules were observed at the time of the inspection.” (emphasis added).”
As a result, no letters were sent to the operator. But the resolution of the complaints was never covered in the Post story, even though more than five months had passed.
It is clear WildEarth Guardians are pushing the initiative, from the Post story to garner Congressional support from DeGette, chair of the House Energy and Commerce Committee’s Oversight and Investigations panel, as well as the administration of Gov. Jared Polis, whose staffers promise action after the successful passage of Senate Bill 181.
With the issuance of an intent to sue on Feb. 19 by WildEarth Guardians, Colorado should expect lawsuits on or around April 20 – which happens to be a convenient date to promote itself for EarthDay. However, real environmental performance is being demonstrated by the oil and gas industry in Colorado through its continuous improvement in reducing emissions through technological innovation.
In the meantime, the Post failed to provide a complete analysis of the regulations already in place that backstop any permitting required by CDPHE for a facility’s first 90 days; an exploration of the background of the well-known activist group pushing this issue at the Congressional level or through potential lawsuits; the conclusion by the state oil and gas regulators to the residents’ complaints; or a complete explanation of how companies preclude the need for emission controls during those first three months by eliminating or drastically reducing emissions altogether.