Backlog in permits slows drilling

A glut in air-pollution permit applications to the state has led to a backlog that is delaying oil and gas construction projects and raising concerns about increased air pollution.

Colorado Air Pollution Control Division engineers are evaluating about 1,800 permit applications, division Director Will Allison said. With help from six new engineers the division has hired temporarily to address the backlog, Allison hopes to address about 700 applications that have remained in the division for “some time” by the month’s end. 

“We had a backlog, which we’ve actively worked to reduce and are seeking to eliminate,” he said.

Required by state and federal law, permits allow construction or operation of facilities that pollute the air. The division evaluates applications to determine whether emissions are acceptable and uses permits to track and limit pollution.

“It’s of interest to all of us, the oil and gas industry, but also Coloradans that we have an efficient and timely permitting system to ensure that that isn’t holding up economic development,” Colorado Oil and Gas Association President Tisha Schuller said.

Oil and gas producer Encana, which operates wells in Weld County, has encountered delays of as long as 15 months on projects that would normally take five months to complete, company spokesman Doug Hock said.

In some cases, the company has exacerbated the backlog because it has submitted multiple permits for different locations to deal with delays, Hock said. The backlog has postponed Encana projects statewide; the company even had to stop production of one well on the Western Slope.

Industry representatives, however, gave the state credit for taking steps to streamline the system.

For Encana, the delay has cut to six months a project that typically would have taken a year to permit, Hock said. “They’ve really worked with industry on this to reduce that lag period,” he said.

The division’s workload has risen dramatically since 2008. That year, division engineers evaluated an average 164 permit applications each month, Allison said. By 2010, engineers were evaluating an average 280 applications each month.

Figures for last year were not yet available, but Allison estimates the division averaged 225 per month. He expects permit applications to continue to grow.

Permit applications range in complexity from a clerical change to construction of a major facility with multiple pieces of equipment and can take anywhere from several days to months to complete even without a backlog. They often relate to equipment such as tanks, compressors and engines.

Besides hiring new engineers, the division has taken additional steps to address the backlog, such as using uniform language in some common types of permits. In the future, he hopes that the legislature will authorize the hiring of additional, full-time engineers. The division now employs six full-time engineers in addition to the six temporary staffers it recently hired.

Meanwhile, an increased number of permits granted by the division has led to a 40 percent rise in the number of tons of air pollutants discharged by oil and gas sources since 2008.

In addition to a network of air-quality monitoring stations statewide, the division has worked with the state Oil and Gas Conservation Commission to develop regulations to limit pollution, Allison said.

Considering plans by Anadarko to drill 2,700 new wells, the division must carefully evaluate every permit, said Jason Bane, spokesman for Boulder-based environmental group Western Resource Advocates.

“It can’t be a rubber stamp,” he said. “If we have a lot of new wells and we’re getting more tax revenue or more money or whatever, it doesn’t mean anything if we don’t have breathable air.”

The state has generated some revenue from the pollution, although it remains unclear exactly how much. The division charges an hourly fee of $76, but Allison did not know how much oil and gas companies pay in total hourly fees because the state’s accounting system does not let it separate industries.

Companies must pay about $23 per ton for pollutants such as nitrogen oxides and volatile organic compounds and nearly $153 for hazardous air pollutants (see chart for details).

Drilling on the populated Front Range makes cautious review by the division even more important, Bane said, especially because portions of the Front Range exceed federal ozone standards.

“It’s not like we can just vacuum up air pollution,” he said.

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