Larimer County counsel outlines state rulemakings on methane, produced-water recycling and leak detection

Special counsel Matt Sura told the Larimer County Board of County Commissioners on March 10 that Colorado is pursuing several rulemakings that will change how the oil and gas industry controls methane and monitors air quality.

Sura, who serves as the county's special counsel for oil and gas, said two major rule processes have moved in the past six months: a Reg 7 rulemaking at the Air Quality Control Commission prompted by federal EPA requirements, and a rulemaking at the Energy and Carbon Management Commission (ECMC) addressing recycling of produced water. "There's a lot to update you on," Sura said.

The Reg 7 changes respond to what Sura described as an EPA-driven requirement that pneumatic valves in oil and gas operations be non-leaking. Pneumatic valves use natural gas pressure to operate and, Sura said, "every time that pneumatic valve actuates, it actually releases some methane and therefore these pneumatic valves have been very leaky and one of the biggest sources of methane in the oil and gas sector nationwide." He said Colorado has taken steps since 2014 to reduce those emissions and the new rules will require retrofits so remaining pneumatic devices do not leak — for example by adding on-site air compressors or returning gas to the pipeline.

Sura also described more prescriptive monitoring requirements for pre‑production and early production phases. He said regulators now plan to require specific types of monitors and, when indicated, "open air canister monitoring" to test for BTEX compounds (benzene, toluene, ethylene and xylene). "These are cancer causing carcinogenic chemicals that we don't want in the air and we don't want anybody to breathe," he said.

On produced-water recycling, Sura said the ECMC process addresses how to reuse the large volumes of water used in hydraulic fracturing — "every one of those wells is using about 5,000,000 gallons for hydraulic fracturing," he said — and how to do so without increasing air pollution. He said a consensus proposal among Larimer County, Adams County, Weld County, Chevron and conservation groups would permit more flexibility, including a form of water-credit trading, rather than the staff proposal that would have required uniform recycling percentages at every site. Under the staff proposal described in the meeting, recycling requirements would have started at 4% and increased to 10% and then 20% in subsequent years.

Sura warned of trade-offs. Recycling can increase on‑site equipment and tank storage, which can emit volatile organic compounds, and the Front Range remains an ozone nonattainment area. "We want to recycle but we also, we're in a crisis with our air quality on the Front Range and so, there's a trade off there," he said. He said a nine‑month stakeholder process will conclude with ECMC rulemaking early in 2026 and asked county staff to participate in the stakeholder process.

Sura described an upcoming Public Utilities Commission (PUC) rulemaking on advanced leak detection for pipelines. He said Colorado's PUC has relatively few field inspectors — "they only have 7 inspectors and some of those inspectors stay in, are reading inspection reports ... and then the other may 3 or 4 are out in the field" — and that many operators currently monitor infrequently. He listed new detection technologies being discussed, including aircraft sensors, mobile ground labs, continuous monitors, satellite imagery and smart pegs. "These include flying overhead with aircraft with sensors ... satellite imagery can find these leaks," he said, and noted satellites and other systems can identify so‑called super‑emitters that account for a meaningful share of methane releases.

Sura said the PUC was directed to address advanced leak detection by statute in 2021 but had delayed rulemaking until this year; he said the PUC expects to complete its stakeholder process by November. He also noted PHMSA (the Pipeline and Hazardous Materials Safety Administration) had been working on federal rules that were not finalized, and that Colorado intends to move forward at the state level.

Sura said the Air Quality Control Commission will pursue a toxics rulemaking focused on five toxics, including benzene, and a new State Implementation Plan (SIP) rulemaking will examine additional oil and gas emissions previously unaddressed.

Commissioners asked procedural and policy questions about timelines, federal‑state interactions and potential impacts on local land‑use requirements. Commissioner Jody Shattuck McNally asked Sura for a written, bulleted synopsis of the brief; Sura said he would provide one to staff for distribution. Commissioners also discussed whether state toxics rules might prompt local code reviews.

No formal action or vote took place on the item; commissioners directed staff to participate in stakeholder processes and to accept a written summary from Sura.

The update included these key technical and timeline details: Colorado has pursued Reg 7 changes related to pneumatic devices; ECMC stakeholder work on produced‑water recycling will run for about nine months with rulemaking early in 2026; the PUC stakeholder process on advanced leak detection is expected to finish by November of this year; and class II injection well rules remain the federal standard governing where recycling can inject fluids.

Ending: Sura said he would provide written bullet points of the update in the coming week and asked county staff to engage in the upcoming ECMC and PUC stakeholder processes. No formal votes or regulatory filings by Larimer County were recorded during the work session discussion.