Category Archives: New O&G regs for Larimer Cty

Written comments by Rick Casey to the BOCC on the final public input on Larimer County’s O&G regulations

[Author’s Note: I submitted the following comments to the Board of County Commissioners on July 28, 2021 because I did not get the opportunity to speak in the Zoom meeting on Monday night, July 26, 2021. Since the topic of this final meeting was about the financial ability of operators to conduct their business, that was my focus.]

Good evening commissioners, county staff, and the public in attendance:

Thank you for allowing public testimony at tonight’s historic meeting. I and my colleagues in the Larimer Alliance deeply appreciate this opportunity to make our voices heard.

Climate change is barreling down on us, and anybody who is in denial of this reality is either in denial of global scientific evidence or is seriously in need of a mental health checkup. I am sure the county government is on the side of science, factual evidence and the law.

Since this evening’s meeting is primarily about fiscal responsibility of how oil and gas operators conduct their business, I will frame my comments around the long term outlook for how well local operators will be able to continue to operate. I am only a common layperson who reads the news, but having been an economics instructor at Front Range Community College since 2009, I have read deeply into these economic issues.

I would ask the commissioners to be especially wary any operators seeking to drill new wells in the county. The primary economic indicator to which these operators will frantically point is the international price of oil; typically the NY Mercantile Exchange price, which today was $72/bbl. But that price is as unstable as a wind vane: it will change with the winds of change in international economics. Last September, that price was at $36/bbl. The current price is based on recent announcements by OPEC+, which could change tomorrow.

Fundamentally, the long term price of oil is stacked against drilling of any new wells because the forecast for the long term need of oil and gas is, shall we say….unfavorable.

The evidence for this is that the GHG from cars and trucks surpassed the GHG from coal-fired power plants back in 2016 — and has been rising ever since. Coal is at an industrial dead end of life. Though unthinkable a mere decade ago, that industrial dead end is now a reality. The other looming industrial dead end is the drop in future demand of fossil fuels for transportation. The future for this demand is in turmoil.

The use of EV’s, or electric vehicles, is ramping up, and every major car manufacturer in the world, including GM, has announced a target date by when they will cease production of fossil fuel powered vehicles, with dates varying from 2030 to 2050, most by 2035. The state of Colorado is already investing significant state resources in the encouragement of EV’s. We can certainly expect the adoption of EVs to grow dramatically in the next decade.

The date for the end of fossil fuel powered vehicles is just a mere decade and a half away. Although this is a high level macroeconomic projection, it is an undeniable global economic force that the commissioners should consider, for it will undoubtedly have dramatic implications for current investment decisions in the county.

Other macroeconomic factors that could affect investment decisions are national energy policy, such as a possible future carbon tax, which would dramatically impact any local operators’s financial projections.

I have not even begun to address the long term health impacts, which is a whole other argument against allowing any further investment in oil and gas drilling in the county.

Also, all the arguments by private property owners about “takings” are invalid, which SB-181 specifically addressed. These people need to read the law, which was arrived at after years of strenuous democratic activity — and also realize that the national and global imperatives about global climate change far outweighs any of their claims about damage to their private property and income.

Based on this evidence, I think the county should be steering its investments away from fossil fuels and towards renewable energy-based industries.

Thank you.

Comments by Doug Henderson to COGCC, June 16, 2021

I am Doug Henderson, a resident of Larimer County, speaking for the Larimer Alliance for Health Safety and Environment, a coalition of residents and organizations in Larimer County.

Larimer County’s air quality is terrible, due largely to oil and gas industry emissions.

The American Lung Association gives Larimer County a grade F for air quality. In 2019, Fort Collins was ranked #24 worst in ozone pollution of over 200 cities in the US. In 2020, Fort Collins ranked lower: #19 worst in the US.

The NCAR FRAPPÉ study found conclusively that oil & gas industry emissions are the major driver of unhealthy air quality in the northern Front Range including Larimer County. Improving our air quality depends on reducing emissions from oil and gas facilities.

We in Larimer also face the mega problem of climate change and all its ramifications. The impacts are not in some distant future, they are immediate and close to home. Last summer, the biggest wildfire in Colorado’s history was directly west of where I live near Ft Collins, wreaking both immediate and lasting impacts. It’s only mid-June now, but this week we are sweltering, and almost every day is an air alert, very bad air day.

What kind of canary in the coalmine does Colorado’s officialdom need to wake up, get serious, and take meaningful action to rapidly reduce harmful emissions and greenhouse gases such as methane?

It is time – past time – that COGCC takes serious action to stop harmful, often illegal, emissions from O&G facilities and sites.

These emissions happen at virtually all O&G facilities, causing damage to people’s health, ruining our air quality, and doing grave harm to our environment and climate. Colorado expects operators to self-report and be honest about emissions. But the real honest truth is that the industry lies about its emissions. And in spite of this open secret, there has been very little monitoring, investigation, and enforcement by state or local authorities.

One example here in Larimer County –

Investigators with the organization Earthworks recently documented emissions at an O&G facility just NE of Ft Collins, in Larimer County. The investigation was triggered by a report from a nearby local resident, who has experienced health problems for years from this facility – headaches, nausea, nosebleeds, possibly long-term damage.

The facility has been leaking harmful and illegal emissions for many years – harming local people, air quality and our environment. Although the operator was cited for violations a number of times over years, the leaks continued, and local residents suffered health effects. It took repeated imaging documentation by Earthworks and reports to the state in the first months of this year before the operator finally made repairs that stopped the leaks.

Without that, the facility would be leaking now, with the operator denying there was a problem, and authorities replying on self-reporting and trusting the operator to fix leaks.

Unfortunately this is typical O&G business as usual, how the industry has operated for decades.

COGCC needs to get serious about stopping harmful emissions.

Every O&G site needs monitoring adequate to identify harmful emissions and to report in real time, to be useful for addressing problems when they occur. Technology is readily available to do this. But of course the industry prefers monitoring and reporting that provides results weeks or months later, and is not public, because its useless for really ending leaks and holding polluters responsible.

Local residents and emergency responders have a right to know what is being emitted, available on a public website with alert options so that people can know when a dangerous emission occurs near them and take precautions.

The problem of emissions isn’t only with active wells and facilities it is also inactive wells, including properly plugged and abandoned wells and wells simply  abandoned.

Mechanical Integrity Tests are needed and necessary to ensure that inactive wells are not a danger to public health and safety, not harming the environment, and not causing climate damage, possibly huge damage.

Credible research points to idle inactive wells and abandoned wells as significant sources of methane emissions.

But without integrity tests of these wells, there is no way to ensure that they aren’t leaking methane and other harmful pollutants. And no way to know if some may be “super emitters” that are contributing disproportionately to climate change.

We ask COGCC to put more attention and effort to
• emissions monitoring and reporting,
• to enforcement that serves as effective deterrent,
• and to ensuring that mechanical integrity tests are conducted to
identify emissions and to stop them.

We encourage that this happens sooner rather than later – for protection of public health, safety and environment, and because rapid reduction of GHGs – sooner, not later – is crucial to maintaining a livable climate and planet.

Thank you for your attention to and action on rapid reduction of emissions.

When will you feel safe from oil & gas in Larimer County?

The founding statement and mission of the Larimer Alliance (see here) as an organization has been to protect our environment and its citizens from the impacts that the oil and gas industry. However, this does not provide us with specific goals or metrics; but that has always been our ongoing focus of activities, ever since we started as an organization in summer 2018.

But this is a question I’ve really thought about, both personally and as a volunteer, as to how can I be more effective personally, and how the Larimer Alliance can be most effective as a platform. Through our presence on social media, testimonies at public meetings, and lobbying of our elected representatives, we have been hard at work on this over the time since then.

And our work has paid off! We were well positioned to take advantage of the election of the two new county commissioners, Kristin Stephens and Jody Shadduck-McNally, and now the commissioners have extended the moratorium on any new drilling permits for oil and gas wells in our county.

However, there are still 41 pending wells waiting to be approved which could be drilled here; see this screenshot from the COGCC website taken today:

Pending wells, Larimer Cty, April 30, 2021

Even with all of our actions, and with the apparent support of our commissioners, who also do not seem in favor any further drilling here, these oil and gas operators — Magpie Operating, Kerr-McGee and Prospect Energy — are still willing to drill.

Not only are these 41 wells a threat, there is an active, on-going campaign by a Dallas-based investment fund, King Operating Company, which has been aggressively promoting this even during the months of the Covid pandemic:

Larimer County Investment Fund, King Operating Company (click for link)

King Operating openly declares they would like to drill some 200 wells in the Wellington area, which would change that part of northern Larimer County forever. The drop in the price of and demand for oil during the pandemic has not deterred King Operating from pushing forward, nor has the passage of SB-181 in Colorado, nor has the passage of new oil and gas regulations.

So, I ask you, what do you think would make me feel safe from the outside,  and outsized, threat of large, even multi-national, oil and gas companies seeking to drill up Larimer County, like they have Weld County? What would make you feel safe?

The only thing that will make me feel safe is seeing that our fossil fuel based economy is moving towards alternative energy in a convincing way. When I see that most of our coal-based electric power plants have been removed, or slated for removal, because the majority of the grid is running on alternative energy. When I start seeing at least half of the vehicles on the streets are electric, and there are enough charging stations that no one has to worry about being unable to recharge their car on a trip. When I read in the news that the stock prices of companies like ExxonMobil, Chevron, BP and Texaco have plummeted to the level of junk stocks, because no one wants to invest in companies that have no future. And when companies that manufacture electric cars, wind turbines and solar panels are attracting the real investor dollars, because their markets are booming, and they have a solid business future.

That is when I will start to feel safe. But how is that going to happen? By changing the economics on which the oil and gas industry is based. And while that might sound like Mission Impossible to some:

click for link to the funky old TV series from the 60’s…

I can assure it is not that difficult, because this plan has been researched, studied to death, and lobbied for in the US Congress for over a decade. The plan is called a carbon tax; and the best carbon tax proposal that I have seen is the one from the Citizens Climate Lobby (CCL; see their website at citizensclimatelobby.org).

I would remind the reader that I have taught environmental economics at Front Range Community College since 2009, and have had carefully reviewed the various proposals for how fossil fuels are regulated, and the various proposals for supporting the transition to alternative energy.

The first thing to understand about the CCL bill (whose full name is The Energy Innovation and Carbon Dividend Act, H.R. 2307; see full details here: energyinnovationact.org) is that it is not just a tax on carbon, and also a dividend program.

In other words, all the money collected by the tax will be refunded to the American people (less the cost of administering the program). It is designed to be revenue neutral, and not increase the size of any other government programs. So, although this is called a tax, it is more properly referred to as a fee, since this will not raise any additional revenue for the government, which is the purpose of a tax.

The fee is based on the carbon content of the fuel in question, and is charged at the point where it enters the economy. In practical terms, this means the first wholesaler that sells a fossil fuel, before it has been processed or consumed. (See full analysis here: energyinnovationact.org/section-by-section-analysis). The carbon content would be established by the fuel classification, based on the CO2-equivalent of the fuel when burned or processed (this would be established in government labs, and applied uniformly). The tentative fee has been proposed at $15 per metric ton (which is quite low), but would ratchet up every year until GHG reduction levels have been met.

The CCL has been lobbying Congress for over 14 years about this, and have constantly refined how the program would work, based on their own research by hiring firms like Regional Economic Models, Inc (REMI) to study the effect of a revenue-neutral carbon price on the American economy. (see that report here) How the impact of rising carbon prices combined with the dividend has also been closely studied by the CCL consultants (see their Carbon Pricing Studies).

I would not expect most of our blog’s readers to want to delve deep into the weeds about this plan. What I would expect our readers to  like to know is when I would feel safe — because that might assure them when they could feel safe — which is the primary reason for my writing this post.

And, last but not least, I strongly suspect that a carbon tax would spell the death knell for any more outside oil and gas companies wanting to drill in Larimer County — something that no amount of local regulation could ever do.

So please let me assure you: if the US Congress can pass  the CCL version of a carbon tax/consumer dividend plan, that I would start to feel safe. And when the full impacts of a carbon tax start to work themselves out in the American economy, by hastening the disinvestment in fossil fuels, and hastening the investment in alternative energy and all its associated infrastructure — that’s when I will start to actually feel safe. Of course, that will take a few years…so, with that realization, you might appreciate what a long haul we are all in for in this transition from a fossil fuel based economy, to one that is based on energy — primarily electric — from alternative energy.

Finally, I would add that these are my personal opinions, and not those to the Larimer Alliance itself (though I would encourage their adoption of this position that I advocate).