Colorado will become a testing ground for reducing emissions from oil and gas exploration and production (E&P). A new rule, known as Regulation 7, is an early effort at reducing E&P emissions and may help resolve a contentious issue in a state that combines rich unconventional oil and gas resources and significant opposition to how they are developed.
The addition of another regulation is not likely to be celebrated in the industry, but the collaborative process used to write the rule was praised by the head of one of the affected companies. “Hopefully, it is a new way to write a regulation,” said Doug Suttles, CEO of Encana, during his keynote address at the start of the IADC/SPE Drilling Conference and Exhibition in Fort Worth, Texas.
One of the advantages of the regulation—created by a coalition of government officials, environmental groups, and oil companies—is the flexibility it offers companies for how they meet goals to reduce emissions blamed for smog or global warming.
The result could create demand for proven technology, such as capture devices to reduce tank emissions and pumps that prevent natural gas from bleeding out, as well as new methods for detecting and reducing emissions.
Suttles predicted greater use of infrared cameras to detect airborne emissions as part of the required inspections needed to detect leaks. He said the new system could remove 92,000 tons of emissions a year in the Rocky Mountain state, or the equivalent of the pollution caused by every car in Colorado for a year.
The industry has a strong motivation to find lower-cost ways to discover and eliminate emissions. While capturing gas now leaking into the atmosphere can add to sales, the cost of doing so is still expected to be higher, Suttles said.
He said that the regulation will be re-viewed in 2 years to evaluate how it has performed and determine if there are better, lower-cost ways of implementing it.
