Is the Colorado Regulation Model Good Enough For Obama?

Is the Colorado Regulation Model Good Enough For Obama?

In the final year of the Obama presidency, a string of legal cases could make or break his environmental legacy, with the fault lines straddling the states’ rights vs. federal authority battle that has defined environmental conflict in the past four decades.

And not by chance, the state of Colorado again finds itself in the middle of the political dispute. By dint of Colorado’s unusual combination of a strong extractive industry history – oil, natural gas and hard-rock mining – and an increasingly urbanized and environmentally conscious population, politicians and activists were been forced by necessity to find compromises over energy access before the federal government could act. The positioning of Colorado Gov. John Hickenlooper as one of only a few outspokenly pro-drilling Democrats in the country has also given political cover to an industry that has become increasingly dependent on Republicans for support.

As a result, the state has become either the vanguard or the guinea pig of much regulatory state-level experimentation concerning energy extraction in the past several years, depending on how one looks on such things.

Exhibit One is the August 2014 compromise on hydraulic fracturing activity in Colorado, a hard-fought battle between corporate and environmental interest groups that forced oil and gas companies to install emission-control on new wells: compressors and storage tanks that found methane leaks and helped lower the amount of methane emitted by more than 40 percent.

While some drilling firms grumbled about the cost of installing the emissions controls, the industry was pleased the compromise kept a referendum to ban drilling off the 2014 statewide election ballot. And it left Colorado drillers well ahead of competitors in other states at meeting draft federal methane guidelines that were published at the beginning of September.

“With the alliance between the environmental community and the energy development community, we were able to come up with methane rules that were a win-win for everyone,” said Rep. Diana DeGette, a Democrat who represents Denver in the U.S. House of Representatives. “The energy companies were able to keep and resell that methane, and there were more environmental controls to make sure there weren’t unwanted releases. We were able to come up with a good rule in Colorado, and that’s generally what the new EPA rules are modeled on." (video)

A second example occurred in September, when the federal government decided not to list the Sage Grouse as an endangered species, largely as a result of the efforts by 11 western states, including Colorado, to protect the animal’s habitat by curtailing damage done by oil and gas drilling. Putting the Sage Grouse on the Endangered Species list could have blocked industrial activities on millions of acres of land.

Federal Heartburn Authority

But the two Colorado examples may not have much company in the final year-and-a-half of the Obama presidency. The federal government’s chief environmental steward, the Environmental Protection Agency, is trying to push through a number of regulations that could have dramatic impacts on the oil, gas and coal industries before he leaves office in January 2017.

The first environmental priority for the White House is the successful execution of its Clean Power Plan (CPP), which aims to lower greenhouse gas emission from coal-fired power plants by at least 25 percent from 2005 levels by 2030. (See article.)

“The climate action plan and the constituent elements of it really demonstrates the seriousness of the president and the EPA administrator’s commitment by the sustained follow-through that we ourselves have pursued and are setting the foundation for U.S. climate policy in the long-term,” said Joe Goffman, assistant administrator & senior council for the EPA’s Office of Air and Radiation, speaking at an event in Washington on Sept. 29.

Other environmental priorities for the administration that will either be finalized before the end of 2016 or are already tied up in court are regulations concerning ozone levels, hydraulic fracturing on federal lands, mercury toxics standards, and the expansion of federal jurisdiction to non-navigable waters currently under state management.

Just last week, Colorado was one of four states that were awarded an injunction by a federal judge against the Bureau of Land Management’s (BLM) rule governing hydraulic fracturing on federal and tribal lands, a regulation that had been finalized in March of this year. The judge found that the rule exceeded the BLM’s statutory authority.

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