New Rule to Slash Methane Emissions

With the world paying more attention to reducing methane emissions as a way to meet climate goals, Colorado state regulators will be collaborating with oil and gas companies operating in the state to implement a new methane intensity rule. This rule limits the amount of methane that oil and gas companies can emit based on production levels. It is intended to help Colorado meet requirements to decrease greenhouse gas emissions by 26 percent relative to 2005 levels by 2025, with a targeted 90 percent decrease by 2050.

The intensity rule’s framework was developed in 2021, marking a change in the state’s approach to methane emissions. Before, Colorado’s regulations focused on looking for leaks rather than attempting to quantify emissions for the entire oil and gas industry, which accounts for 60 percent of all methane emitted in the state. After finalizing the framework, state regulators worked with environmental groups, local governments, and oil and gas industry representatives to figure out how to monitor emissions and develop a testing protocol, which was adopted on May 2, 2024.

Allowed Emissions Based on Production

Under Colorado’s intensity rule, oil and gas companies have limits on how much methane they can emit. Methane emissions are converted into tons of carbon dioxide equivalent, a figure calculated based on a gas’s warming potential relative to carbon dioxide (in this case, methane has 30 times the short-term warming potential of the same amount of carbon dioxide).

Colorado regulators will use aircraft and satellite observations from 12 counties, along with on-site methane measurements from select oil and gas facilities to validate observations, and calculate statewide emissions. Colorado has required oil and gas companies to report estimated emissions each year, but those estimates have typically been based on models. Regulators will compare each region’s measured emissions to those in oil and gas company reports to adjust emissions targets as needed.

Next the rule takes each company’s oil and gas production in barrels of oil equivalent (BOE). For the first year of the new rule (2025) companies that produce 10 million BOE or more would be limited to 11 tons of carbon dioxide equivalent per 1,000 BOE, while smaller operators producing less than 10 million BOE per year would have a limit of 34 tons of carbon dioxide equivalent per 1,000 BOE. In 2027 and again in 2030 the rule will reduce the allowed emissions level per 1,000 BOE to mirror emissions targets.

A Different Approach

Although the intensity rule sets limits on how much methane oil and gas companies can emit, companies have been given free rein to on how best to meet their individual targets. This approach allows for the use of many different techniques and technologies to monitor, measure, and mitigate methane emissions. Companies have the option to conduct their own measurements, but so far only six of Colorado’s 258 operators have chosen to do so, with the rest opting to rely on state data.

Basing emissions on output is a new approach and the monitoring protocol’s flexible methods will allow companies to tailor remediation to their circumstances leading to the most cost-effective and impactful reduction possible. For companies with methane leaks manifesting downhole, BioSqueeze provides innovative solutions for identifying and remediating a variety of well integrity challenges. Our solutions boast an industry leading success-rate ensuring predictable, cost-effective intervention to maximize the impact of available funding.