The Colorado Department of Public Health and Environment, Air Pollution Control Division (Division) held the first of several public meetings to engage stakeholders on potential revisions to the Air Quality Control Commission's Regulations Number 3 and 7(Reg 3 and Reg7), addressing the requirement set forth in SB 19-181 to minimize air emissions from the oil and gas industry.

Based on the stakeholder meeting, the Division is expecting to address SB19-181 and is considering the following changes:

Leak Detection and Repair (LDAR)

25-7-109 (A) and (B) of SB 19-181 requires that LDAR inspections be conducted, at a minimum, on a semi-annual basis for well production facilities, and on a regular basis for transmission pipelines and compressor stations.

In lieu of the above, the Division's proposal states the following

  • Semi-annual LDAR requirements for all facilities (E&P and compressor stations) with facility-wide emissions > 2 tpy
  • Retain existing quarterly and monthly LDAR requirements as currently in place per Reg 7 for applicable facilities
  • Allow operators to use an alternative approach (aerial surveys, long path monitoring) if it can be proven to have equal or more effectiveness than semi-annual LDAR inspections

Transmission Sector

In short, this proposed rule is based on the emission reduction program developed by the Statewide Hydrocarbon Emission Reduction (SHER) team, and requires companies to develop and implement company-specific Best Management Practices (BMPs) statewide. This may involve annual compliance certifications and company-wide emissions reports with third party verification.

Pneumatic Devices

25-7-109 (D) of SB 19-181 indicates that requirements be established to reduce emissions from pneumatic devices, and that the commission should require oil and gas operators, under appropriate circumstances, to use pneumatic devices that do not vent natural gas.

In lieu of the above, the Division's proposal involves seeking consensus on establishing regulatory provisions through discussions between the SHER team and Pneumatic Controller (PC) task force.

Unofficial discussions between industry groups and other stakeholder groups have suggested movement towards a state-wide "find and fix" program to eliminate leaks at wells sites and compressor stations, with the caveat that a compliance discretion be established and maintained for a period of two years.

Statewide Exploration and Production Facility Permitting

The Division proposes to remove existing regulatory provision (under Regulation 3, Part B) which allows operators of new oil and gas exploration and production facilities up to 90 days to apply for a permit, and treat it like any other industry sector via the pre-construction permitting process.

There have been substantial arguments (legal and otherwise) in opposition to this proposed change.

There are two new proposed General Permits (GP-09 and GP-10) which were released for public comment on July 31, 2019. Informal discussions with the Division have revealed that the GP-09 will serve as a facility-wide General Permit prior to the serious non-attainment designation. The GP-10 will serve as a facility-wide General Permit to be used after designation to serious non-attainment.

A potential future scenario could include the 90-day provision removed, with the exemption of E&P sources that have applied for a General Permit.

Storage Tanks

The Division has proposed many changes to the regulatory provisions under Reg 7 for Storage Tanks. Some are as follows:

  • All tanks statewide with VOC emissions equal to or greater than 2 tpy must have controls (prior threshold under Reg 7 was 6 tpy of VOC)
  • Controls in accordance with the above limit to be implemented in the non-attainment area by May 1, 2020, and outside of the non-attainment area by March 1, 2021
  • All new tanks to install auto-gauging devices to eliminate emissions when liquid levels are checked

Truck Loadout of Storage Tanks

Current regulatory requirements under Reg 3 or Reg 7 do not explicitly deal with Reg 7. The proposed changes would involve:

  • New and existing well production facilities statewide should control hydrocarbon emissions from loadout of tanks to trucks by using submerged fill and routing vapors to an enclosed combustion device or Vapor collection system
  • Existing facilities would be required to have control systems in place by May 1, 2021
  • Inspection and recordkeeping requirements pursuant to the above are also expected

Discussions are in progress to see if exemptions can be built in for older condensate tanks and condensate tanks with infrequent loadout.

Well Liquids Unloading

Reg 7 requirements for downhole well maintenance and liquid unloading events, state the owners and operators must use BMPs to minimize hydrocarbon emissions. The proposed changes seek to expand statewide BMP requirements to include emissions during plugging and abandonment activities, and enhance recordkeeping requirements.

Statewide Annual Emission Report

This annual report would entail a comprehensive emission report for all oil and gas facilities in Colorado. Pollutants reported would include methane and ethane, in addition to NOX and VOC. Emission sources would be comprehensive, and would almost mirror the sources reported under 40 CFR 98, Subpart W.

Future rulemaking will touch upon various other areas and could include: continuous methane emissions monitoring; minor source offset program or other system-wide reduction; enhanced control requirements based on proximity to homes; increase capture of gas and reduce flaring and tankless production.

Stay connected to our Colorado news page for more updates. For any questions or to get the latest on these evolving regulations, email Hari Krishna Bharadwaj or call (720) 638-7647, Ext. 116.