Colorado’s oil and gas boom combined with a cash-strapped state government has caused a backlog of 1,800 pending air pollution control permits for oil and gas equipment.
“It could have an impact on jobs,” said Doug Hock, spokesman for Encana, a major oil and gas producer.
Construction projects can be held up for a year waiting for the state health department to start reviewing an application. The permits cover condensate tanks, dehydrators that take the liquid out of gas, valves and pumps on pipelines, compressors, engines, drill rigs and other equipment. The applications detail how much the equipment will pollute, and what control equipment will keep the contamination in check.
“Every company is affected,” said Tisha Schuller, president of the Colorado Oil and Gas Association. “If you don’t have a permit, you can’t construct.”
Encana and the industry association, however, credit Gov. John Hickenlooper’s administration for working to solve the problem. Six temporary engineers have been hired, and so far they have cut the backlog from a peak of 2,000 to 1,800, according to Will Allison, director of the Colorado Air Pollution Control Division.
“The state has been really responsive,” Schuller said, not just adding staff but also helping companies learn the system to get the paperwork right the first time, she said.
But even those six additional engineers won’t be able to eliminate the backlog until the end of 2012, Allison said.
The backlog is the result of a 70 percent jump in applications, from 164 to 284 per month from 2008 to 2010. The division has told the legislature it needs 20 permanent new staffers.
Meanwhile, Colorado is expecting a further surge in oil and gas exploration, particularly in the Niobrara shale area, which is centered on Weld County but reaches across Northern Colorado and south to Colorado Springs. Major players like Anadarko and Noble Energy have announced plans to spend billions of dollars on thousands of new wells in the Niobrara area. These plans were driven by large hits off wells that use relatively new horizontal drilling techniques to tap a thin, widespread layer of oil under Colorado.
All this new activity leads to concern that the state’s air pollution will worsen, especially ground-level ozone, which exacerbates asthma and bronchitis and can damage plant life.
Oil and gas operations are only one of many sources of ozone. They emit nitrogen oxides and volatile organic compounds (VOCs), which combine in sunlight to create ozone.
State air pollution control chief Allison says Colorado has made great progress on reducing most types of air pollution, and the state is compliance on federal limits – except for ozone in Denver and Fort Collins. He says the rules will keep pollution in check despite the boom in oil and gas. “We have a good handle on it.”
Allison credited a Colorado law that is switching a number of power plants from coal to natural gas. That strategy will cut tens of thousands of tons of pollutants from the air — and allow a growing economy to emit smaller amounts of pollutants from other sources, including oil and gas facilities, he said.
But environmentalists like Jeremy Nichols of Wild Earth Guardians say the state isn’t being tough enough. “They’re issuing all these permits and Denver is in violation.”
Greeley, Rocky Mountain National Park, Aspen Park southwest of Denver, Colorado Springs and Manitou Springs all have experienced spikes over 75 ppb ozone in 2011 that didn’t qualify as violations.
“The science says we need to be doing a lot better” on limiting ozone to keep humans healthy, Nichols said. The Obama Administration was expected to lower the standard to the 60-70 ppb range but has delayed that decision until 2013, he said. The issue could be decided by the outcome of the presidential election, he added.
To keep the sudden jump in oil and gas drilling and production from exacerbating the state’s air pollution, companies must submit detailed applications for air pollution permits. The applications count how much pollution will be added by each engine, compressor station, tank and other significant piece of equipment that emits air pollution. Then the company may have to figure out how that new pollution adds to the existing pollution, under various weather conditions, and according to the local terrain.
“It’s a huge amount of work,” said Schuller.
Meanwhile, companies are reacting to the backlog by submitting applications early and often – sometimes too often, said Encana’s Doug Hock. “We’ll ask for three or four, to make sure we have one. And that exacerbates the problem,” he said.
New federal regulations due in February are expected to partly mirror Colorado’s laws but also extend the reach of the permitting process to additional sources of pollution, said Bruce Baizel, a Durango attorney for Earthworks Oil and Gas Accounting Project.
One application for a large natural gas compressor station runs 219 pages. It was submitted to the state by Oxy USA for a site 15 miles north of DeBeque in Garfield County. It is expected to produce 183 tons per year of nitrogen, 86 tons of carbon monoxide, 113 tons of volatile organic compounds (VOCs) and 12 tons each of small and large particulates, and 0.8 tons of sulfur dioxide. That made it a major source of emissions under one set of rules.
Oxy promised in the application to add air pollution controls to the unit. The state’s own guidelines say Oxy should have had its permit within three to four months, by September of 2010. Instead it is still under consideration. Oxy declined comment.