Colorado Clamps Down on Oil and Gas Emissions; U.S. EPA Follows Suit

Oil and gas producers’ methane emissions are hugely underreported, says the International Energy Agency (IEA) and others watching this sector.  Meanwhile, accurate data is key to gauging progress toward tackling climate change—a goal of over 150 countries who aim to slash their methane emissions by 30 percent by 2030 over 2020 levels.

Colorado has set a target of its own: cutting oil and gas producers’ methane 60 percent by 2030 over 2005 levels. It passed legislation that is the first of its kind in the world to try and help reach the mark—the Greenhouse Gas Intensity Verification Rule.

What ranks the verification rule as a “policy first” is that it requires use of technologies to determine direct emissions—systems that accurately measure releases at the source in real time. Traditional instruments can detect plumes, or at best determine gas concentrations, but they can’t pinpoint actual on-site emissions rates as they happen.

The Greenhouse Gas Intensity Verification Rule launched in July 2023, two years after Colorado set intensity limits for upstream oil and gas operations.  The “Centennial State”  continues to build on this policy work, having created and published a protocol in May 2024 to guide the industry in complying with the 2023 rule.

While the state law makes clear that operators must get direct methane measurements, questions remain around just which systems they should use and other fine details tied to execution, says Nini Gu, regulatory & legislative manager of the Environmental Defense Fund (EDF). The global nonprofit helped shape Colorado’s protocol, which serves as an instruction manual of sorts, explaining how to implement a measurement, reporting, and verification program.

EDF, who has long pushed for greater transparency in the oil and gas sector, just released data collected from aircraft accounting for releases from production sites across the U.S. that indicates methane emissions are more than four times higher than U.S. Environmental Protection Agency (EPA) estimates. The figure translates to emissions eight times greater than industry targets.

As accounts like this make headlines, and as more states talk about gas and oil’s carbon footprint, Gu sees the argument strengthening for advanced measurement systems, as well as for rules and protocols like Colorado’s. Already the move to get a better handle on true methane release rates is starting to happen.

The EPA published an oil and gas sector methane rule in May 2024 – the same month Colorado released its verification protocol, which imposes new emissions reporting requirements, and also looks at advanced measurement technologies, creating a streamlined process for their adoption.

The agency law coincides with its greenhouse gas reporting program requiring the oil and gas sector to report emissions from the field in real time using empirical data.

“Federal legislation provides a regulatory minimum that is consistent across states. It is essential since methane emissions do not stop at state borders. They are an interstate problem with national and maybe even international impact,” Gu says.

Still while federal regulations should provide a bare minimum of protection, states should set up their own rules and reporting requirements, as they are best equipped to tailor requirements to address their own unique issues, she says.

Colorado has led in clamping down on methane since 2014 when it first set rules to reduce oil and gas industry pollution.

Today on its website, the state’s Department of Public Health and Environment, who has been behind some of the policy work, states:

“Climate change, driven by an increase in greenhouse gases, is affecting our communities worldwide [with consequences like drought, flooding, intensifying heat with higher energy costs, water shortages, and poor air quality].

“Regulations to reduce greenhouse gas emissions [from oil and gas operations] will help reduce these problems. These regulations may affect specific jobs in the oil and gas sector. At the same time, they will help reduce hazardous air pollutants and improve public health in neighborhoods across Colorado,” the agency says.

States can turn to Colorado’s verification protocol for more insight in areas from accounting for measurement-informed emissions; to developing and implementing processes and compliance requirements for verification programs.

The verification protocol spun out from input from environmental organizations, industry representatives, and regulators, and there is insight to be gleaned from that work too, Gu surmises.

“We wrote the protocol together, so there is a good lesson in there for states on how to bring many voices together to write what we hope will be a successful framework to use going forward.” 

Capital and operating costs of more advanced technology will require the industry to reach into its pockets, but policy shapers believe the recovered gas should generate a robust revenue stream, resulting in little to no cost for infrastructure in the long term. An analysis commissioned by EDF and Taxpayers for Common Sense shows that oil and gas producers lost gas to the atmosphere that would have been worth $500M in 2019—enough to power 2.2M homes.

EDF is banking on that access to transparent, vetted data will not only help inform methane-reduction progress and best mitigation practices, but heighten public awareness and confidence, and sway this sector into action.

So, the nonprofit launched a satellite in March 2004, which is scheduled to start delivering public emissions data later this year.

“When we have reliable data on these emissions, taken with validated instrumentation, it becomes more credible. It shows you are on track or not; then whatever follow up action that needs to be taken will have more credibility too,” Gu says.

“It becomes a proof-of-concept framework that can be adopted by other regulators to make informed decisions. But we need data, and we need to be able to trust it to be able to make these decisions.”