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Colorado is behind on targets to cut greenhouse gas emissions. How far should the state push industry to get there?

Critics say the governor's roadmap is guided by "wishful thinking" rather than binding mandates to cut emissions blamed for climate change.

A ribbon of two-lane road winds through the prairie in Larimer County, Colorado. (Ed Kosmicki, Special to The Colorado Sun)
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The Polis administration is set this month to complete its “roadmap” for cutting Colorado’s greenhouse gas emissions, but critics question whether the route is clear enough — and the milestones realistic enough — to get Colorado where it needs to go.

In a nod to some of the challenges, air quality and energy officials are already trimming some of the more robust targets in the draft “Greenhouse Gas Pollution Reduction Roadmap,” which was released for public comment in September.

Emission reductions from transportation, the state’s largest source of greenhouse gas emissions, and buildings have been scaled back, while more emphasis has been placed on curbing emissions from power plants and oil and gas operations.

“As we are working on the final document we’ve tried to fill out the description of the action steps in electricity, transportation, oil and gas and buildings showing the timelines … with a greater level of specificity,” said Will Toor, executive director of the Colorado Energy Office.

Still, many of the planned cuts are based on voluntary actions, and rely on historical trends, such as coal mines closing and vehicles getting more fuel efficient, as well as still-undefined new regulations.

“There are a lot of assumptions in the roadmap,” said Stacy Tellinghuisen, senior climate policy analyst for the environmental group Western Resource Advocates. “They are counting a lot of emission reductions that aren’t assured.”

“It isn’t going to happen on its own,” Tellinghuisen said. “It isn’t going to happen without some policies driving it.”

In a bid to give the roadmap more force, the Environmental Defense Fund filed a petition in December with the state’s Air Quality Control Commission to set legally-binding, declining emission limits for all of Colorado’s major sources of greenhouse gases.

“There is a disconnect between where our emissions are going under current policies and where we need to go,” said Pam Kiely, EDF’s senior director for regulatory strategy.

The “Greenhouse Gas Pollution Reduction Roadmap” is the administration’s response to legislation signed into law by Gov. Jared Polis in 2019 requiring deep cuts in the state’s emissions of carbon dioxide (CO2) and other greenhouse gases.

Greenhouse gases trap added heat in the Earth’s atmosphere forcing changes to the climate, including generating or intensifying storms, droughts, floods and wildfires.

Environmental groups are pushing to count only those emissions cuts required by rules,  while the administration is looking at all potential reductions including voluntary actions and future projections of cuts, air quality officials said.

“We are envisioning the legislation and strategies we are expecting to see in the coming years,” said Josh Korth, lead technical analyst in the Colorado Department of Public Health and Environment Climate Change Unit. “We are taking a forward-looking approach.”

Instead of being forward looking, Kiely said the roadmap is “wishful thinking rather than a concrete set of policies and rules forcing reductions.”

House Bill 1261 set the goal of reducing the state’s greenhouse gas emissions 26% from 2005 levels by 2025, 50% by 2030 and 90% by 2050. The legislation gave the AQCC the responsibility for developing a plan and rules to meet the targets.

Will the roadmap reach its milestones? To answer that question, one has to determine first how big the gap is between the policies in place and the target reductions required, and then determine whether proposed initiatives will close it and if not what more needs to be done.

To find an answer one has to descend into a wonderland of competing numbers which, to paraphrase Humpty Dumpty, mean whatever their authors mean them to mean, “neither more nor less.”

The gap

The first step was establishing the 2005 baseline emissions from which reductions will be calculated. The state Air Pollution Control Division has set that number just a tad under 140 million tons of CO2-equivalent releases for the year.

All greenhouse gases, such as methane which has 30 times the heat trapping effectiveness of carbon dioxide, are translated into their CO2 equivalent to get a global carbon number.

Based on the baseline the state would need to cut emissions by 36.4 million tons of carbon dioxide equivalent by 2025, another 33.6 million tons by 2030 and yet another 56 million tons by 2050.

Is the state on track to meet those targets at the moment? Everyone agrees it is not. And everyone disagrees on whether the gap will be closed.

Energy + Environmental Economics (E3), the energy and modeling consultant that helped the state develop the roadmap, calculated, based on the existing programs and pledges, that there is about a 20 million-ton gap for 2025, which grows to a more than a 30 million-ton gap by 2030.

Western Resource Advocates’ analysis puts the gap at 18 million tons in 2025 and 35 million tons in 2030.

A study by EDF calculates that the gap for 2025 is 24.2 million tons and 43 million tons in 2030 if the economy returns to pre-pandemic levels. If there is a pandemic-lag and a sluggish rebound, the holes are smaller – 13.5 million tons in 2025 and 34 million tons in 2030.

Colorado is not alone in facing a gap. The EDF analysis, which looked at the 25 states that have made pledges or passed legislation to cut carbon emissions, found that almost all are behind on meeting their goals. A few states, such as Massachusetts and Maine, were close to hitting their short-term targets.

So, will the existing and proposed initiatives close Colorado’s gap? Again, this is a point of contention.

“They are nowhere close to meeting their goals,” Kiely said.

Mountain Coal Company, a subsidiary of Arch Resources, has been trying to expand its underground West Elk mine east of Somerset, which requires building pads for methane venting. (William Woody, Special to The Colorado Sun)

Toor disagrees and said the state is well on the way to achieving the 2025 and 2030 targets. Just from reduced methane emissions from coal mines closing and old cars being replaced with new more fuel-efficient ones, alone the state’s carbon emissions will drop by 13 million tons. “These gains are baked in,” he said.

Add to that big cuts in emissions from planned closures of coal-burning power plants and Colorado is on pace to meet its targets. In the past 12 months, utilities have announced the early shutdowns of seven coal-fired units in the state.

A scoping exercise by the state’s Air Pollution Control Division estimated that, based on current and future as yet defined rules and programs, the state could get between 36 million tons and 50 million tons of reductions by 2025 and as much as 87 million tons of reductions by 2030.

“Our concern with it is that there are a number of items that may overlap, that may be double counted …and other actions are very uncertain,” Tellinghuisen said.

Colorado’s biggest sources of greenhouse gases

Based on the 2005 baseline, Colorado’s big carbon emitters were: electricity generation, 29% of total emissions; transportation at 22%; oil and gas at 14.4%; industrial plants at 9.2%; and commercial and residential buildings at 8.5%.

Yet even before mandating cuts in CO2 emissions, Colorado has seen big changes to its carbon budget since 2005.

By 2019, electricity generation had already slipped to 23% of total emissions as coal-fired plants closed and renewable electricity generation grew, according to modeling done by E3.

Transportation rose to 21% of emissions, oil and gas increased to 17%, and commercial and residential building emissions, mainly from heating and cooling, were relatively steady at 9%. Industrial emissions edged up to 11% of the total. By 2020, transportation had become the largest single source of carbon emissions.

Overall carbon emissions were down about 9.3% between 2005 and 2019 to 127 million tons, according to the E3 modeling. That still leaves tens of millions of tons that need to be cut by 2030.

“Achieving the 2030 goals will rely on deep reductions in pollution from electricity generation by continuing the transition to renewable energy, as well as deep reductions in methane pollution from the oil and gas industry, which makes up the largest source of non-combustion emissions in the state,” the draft roadmap said.

Power plants

The draft roadmap calls for an 80% reduction in power plant emissions statewide by 2030 – a 32 million-ton cut.

Through a combination of lawsuit settlements, regulations and voluntary actions, it appears that the target is within reach. Getting to the 2050 goal of  90% reduction is less clear.

Only one utility – Xcel Energy, the state’s largest electricity supplier – is required by law to submit a clean energy plan to the Colorado Public Utilities Commission showing how it will cut emissions 80% by 2030.

There are 54 electric utilities and 12 natural gas utilities in Colorado.

Xcel said it will close two coal-fired units at its Comanche Station in Pueblo by 2025 and two units at its Hayden Generating Station by 2028 as part of its plan. In all, in the last 12 months four different utilities have announced early closures of seven coal-fired units

Xcel Energy’s coal-fired Comanche Generating Station, located in Pueblo, is the largest power plant in Colorado. The utility wanted to pass about $12 million in repairs to Unit 3, on the right, to customers. (Mike Sweeney, Special to The Colorado Sun)

In a settlement of a federal clean air lawsuit, Tri-State Generation and Transmission Association, an electricity wholesaler supplying 17 rural electric cooperatives in Colorado, closed its coal-fired Nucla Generation Station in 2019 and will close one unit at the Craig Generating Station by 2025.

Tri-State also submitted a plan to the PUC that would reduce its 2030 Colorado emissions by 80%, including closing two more units at Craig. It is, however, voluntary, as are the announced closures of the Platte River Power Authority’s Rawhide Plant and the Colorado Springs Utilities’ Martin Drake and Ray D. Nixon plants.

“Do we have a policy framework in place that will assure those emissions will go down?” Kiely asked. “The answer is no.”

And even when those plants are shuttered there will be fossil-fuel emissions in Colorado as Xcel’s Pawnee plant is scheduled to run till 2041 and Comanche 3, the single largest carbon emitter in the state, averaging 5 million tons of emissions a year, will run till 2070 under the roadmap.

Tri-State serves 43 rural co-ops in four states and while it would reduce its Colorado emissions in 2030, overall, it will still get 23% of its electricity from coal-fired plants in Wyoming and Arizona.

Colorado Springs Utilities will temporarily use natural gas-fired turbines to provide electricity while it builds out transmission lines and renewable generation.

Platte Valley included the option of adding natural gas-fired turbines, if needed, in its November resource plan. “Small gas turbines and reciprocating engines are viable backup thermal resources for Platte River to complement intermittent renewable resources,” the plan said.

These actions could undermine Polis’ campaign goal of 100% renewable energy by 2040.

Ariana Gonzalez, director of Colorado climate and energy policy for the Natural Resources Defense Council, in testimony last summer, pressed the AQCC not to stop at an 80% reduction, contending that it would be more efficient and cheaper to focus on getting big cuts from the sector.

“There is a very compelling story to go beyond the 80%,” she told the commission. “We have to  decarbonize, and the electric sector is going to drive the least-cost solution.” She said there were “big levers” in the electric sector, while building and transportation cuts would be made of a multitude of small decisions.

In November, the AQCC voted to “lock-in” some of the voluntary closures under its regional haze rules with an order for Rawhide, Ray D. Nixon, and Craig Unit 3 to close by 2029. The commission, however, reversed itself in December, saying the decision had been made with incomplete information and that the closure order did not fit under the regional haze rule.

“Reducing climate pollution from electricity production is the cornerstone of our efforts to decarbonize Colorado’s economy more broadly,” Western Resource Advocates’ Tellinghuisen said. “So, in light of the AQCC’s decision, there must be a separate set of actions the AQCC will take to ensure we achieve the additional carbon pollution reductions from this sector that will be necessary to achieve the state’s climate goals.”

Oil and gas

The other sector the roadmap depends upon for early big emission cuts is oil and gas, with projected reductions of 36% in emissions over 2005 levels by 2025 and a 60% reduction by 2030.

That comes to a 12 million-ton drop by 2030.

The greenhouse gas of concern in the industry is methane, which while shorter lived in the atmosphere than CO2, has greater ability to trap heat.

The emissions come from flaring and venting on drill sites, leaking valves and tanks, as well as pipelines and compressor leaks.

The reductions that the roadmap targets are technically and economically feasible, according to industry experts. The International Energy Agency estimates that as much as 75% of oil and gas methane emissions can be captured with existing technologies and abatement techniques.

The draft roadmap, however, is still vague on how Colorado will go about it, said Lynn Granger, executive director of API-Colorado, an industry trade group. ““I don’t think they have really laid out how they achieve these reductions,” she said.

Granger said she hopes the final roadmap will answer a lot of the questions.

Through a combination of state regulations and voluntary actions, some oil and gas companies have already driven down their emissions.

Chevron Corp., which last July acquired Noble Energy, one of the biggest oil and gas producers in Colorado, said in a written statement to The Sun that in the past 10 years methane emissions from its operation in the Front Range’s Denver-Julesburg Basin have been cut 90%.

This was done through enhanced inspections and leak detection and using improved, no-leak technologies, the company said.

“We continue to upgrade the design of our facilities to produce oil and natural gas with fewer

emissions,” Chevron said. “This includes installing tankless production facilities in our new DJ Basin operations … Our newest facilities in Colorado utilize technology that will deliver greenhouse gas emission reductions in excess of 90% compared to previous facility designs.”

For the past seven years, Colorado has been slowly clamping down on emissions from drilling pads, wells and tanks to deal with health and odor issues, as well as ozone pollution. The AQCC is now focusing on the industry as a source of greenhouse gases.

The commission adopted the first in a planned series of regulations in December 2019, which included requiring oil and gas companies to report their greenhouse emissions annually, and tightened tank emission requirements and inspections for leaks.

The commission issued more regulations in September to require emissions monitoring at all new wells and added new emissions requirements for drilling and hydrofracturing, or fracking, and adopted a rule to cut pollution from stationary engines at drill sites.

Next February, the AQCC will consider a rule to require no-emission controllers, devices that regulate valves and other equipment, for all new or modified oil and gas facilities.

In November, the Colorado Oil and Gas Conservation Commission also adopted a rule banning routine flaring of methane from oil wells, allowing the practice with commission approval, only for safety or operational reasons. Drillers have used flaring to burn off unwanted gas from wells.

Natural gas flaring from a Williams Energy facility can be seen from Garfield County Road 215 on Aug. 14, 2020. (William Woody, Special to The Colorado Sun)

Taking into account all the rules issued since 2017 and the upcoming rulemaking, Mike Paules, API Colorado associate director, said the industry is “on a trajectory to meet the goals.”

Still, while these actions are an important step forward, many of the initiatives are focused on new oil and gas operations not on the state’s existing 60,000 wells. “You just can’t look at new projects,” said Dan Grossman, senior director of state advocacy for EDF’s energy program.

For example, the proposed no-bleed controller rule would apply to new projects, but there are already 55,000 controllers on the Front Range, many that are emitting methane.

EDF has urged the AQCC to require all those controllers be retrofitted with no-bleed devices. Industry representatives say that would not be technically and economically feasible.

Industry representatives and EDF are discussing a modification of  the  proposed rule that would require no-bleed controllers at more existing facilities, Paules said.

Starting in 2021, the oil and gas industry will be reporting their greenhouse gas emissions to the state and that will give regulators a much clear picture of where future action has to be taken, said John Putnam, director of environmental programs for CDPHE.

“The AQCC is going to get more detailed reporting from the oil and gas industry than ever before,” he said.

Will this be enough to hit the targets? “There is enough time to meet the targets as long there is an appetite to do it on the part of the AQCC and the administration,” Grossman said. “If the AQCC and the governor’s office aren’t interested in pushing industry, no there isn’t enough time.”

Transportation, buildings, industry

Transportation, residential and commercial buildings and industrial facilities accounted for 42% of emissions in 2019, according to the E3 modeling and yet their role in the initial stages of the roadmap is limited.

In November 2018, the AQCC adopted the California Low Emission Vehicle (ZEV) rule which requires auto manufacturers and dealers to make more electric and other types of non-polluting vehicles available in the state, with the aim of increasing their market share to 6% from the current 2% by 2030. Colorado is one of 14 states implementing the California rule.

The draft roadmap projected 940,000 EVs on Colorado roads in 2030 – meeting a goal Gov. Polis set in an executive order. The aim was for EVs to account for 43% of the new car market in 10 years.

In a concession to the fact that forecasting the buying habits of hundreds of thousands of Colorado auto owners is tricky, the goal has been scaled back to what can be expected from the ZEV rule, about 150,000 vehicles.

Nick Albanese, an analyst for Bloomberg New Energy Finance, said his group isn’t projecting EVs getting to a 30% market share nationally until the mid-2030s.

The AQCC is scheduled to consider additional transportation initiatives next July.

Electric vehicle charging spot in front of the Ikea in Centennial. (Tamara Chuang, The Colorado Sun)

Similarly, the draft roadmap projected that for buildings to meet their target energy efficiency, heat pumps would have to be widely installed. The draft set a goal of a 60% market share of heating-cooling systems by 2030.

The technology currently has about a 2% share of the Colorado market, according Mike Henchen, a principal in the Rocky Mountain Institute’s carbon-free buildings practice.

“The reality today is that the building sector in Colorado is one that has not been making progress in reducing emissions,” Henchen said. “Existing policies don’t make much of a difference.”

Commercial building heating, cooling, lighting and electrical systems are designed to last 15 to 20 years. “That’s why we have to start now,” Henchen said. “Decisions are being made today on equipment that is going to be around for 20 years.”

There are, however, no immediate actions planned. At the end of 2021, the AQCC is scheduled to hold a hearing on rule changes to address building energy efficiency and greenhouse gas emissions.

Under the revised roadmap, building and industrial emissions are forecast to rise rather than fall from the 2005 baseline in 2025 and then decline by 2030.

“The policy’s recommendations are in the right direction but insufficient,” Henchen said.

As for emissions from industrial plants – such as the Suncor Refinery in Commerce City or the EVRAZ Pueblo steel mill – there are no plans for any rules. There is a proposal for creating manufacturing energy audits that will be considered by the AQCC in 2021.

The top 10 industrial operations in the state emitted a total of about 2.6 million tons of carbon dioxide in 2018, based on data from the U.S. Environmental Protection Agency.

There have been some “modest proposals” to go beyond energy audits, said Howard Geller, executive director of the Southwest Energy Efficiency Project.

AQCC is looking at creating performance standards for large commercial buildings, Geller said. “It would be appropriate to have a similar policy for larger industries.”

SWEEP’s own proposal, which is filed in comments on the roadmap, is for each company to set its own targets with at least a 10% reduction in greenhouse gases every five years.

Market trends, voluntary programs and rules

The roadmap has gathered all the emissions reductions from market trends – dwindling demand for coal, wind and solar generation becoming cheaper, the turnover in the auto fleet to more fuel-efficient vehicles and EVs.

To these it has added the planned actions by the utilities, oil and gas companies and local government greenhouse gas reduction initiatives, such as those underway in Denver and Boulder.

To get beyond those reductions the administration’s approach is to methodically – critics say the pace is tortoise-like – issue sector-by-sector rules over the next several years.  A rule for buildings. A rule or more for transportation. More rules for oil and gas.

“Real gains in the real world with individual sectoral policies and standards, that’s what we’ve been pursuing,” said Putnam, the CDPHE environmental program director. “We are moving sector by sector.”

It is an approach environmental groups call piecemeal. One that could lead to a grab bag of rules that cut emissions but do not add up to the needed reductions.

“Do we have perfect foresight to fix numbers now for each sector?” said the EDF’s Kiely, which is why the group is petitioning the ACQQ is set across-the-board emission cuts  and  a mechanism to reallocate emission reduction requirements as conditions change.

Putnam said such approaches are often theoretical and where they have been tried have encountered problems of their own.

Yet as the AQCC proceeds on the roadmap’s rulemaking-by-rulemaking journey, countless decisions on things such as investing in new boilers, homes and autos are being made across Colorado and greenhouse gases are drifting into the atmosphere.

“Every ton put into the atmosphere today makes it harder to get the cumulative reductions,” Kiely said. “Every year we delay, we will have to make steeper and steeper cuts in the future.”

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