COGA Fact Sheet: Regulatory Costs
Regulatory Costs
Sweeping legislative and regulatory changes will add over $590 million in new, annual costs to doing business in Colorado for oil and natural gas companies.
The total and individual amounts are taken from state cost-benefit analyses. They do not include new operational costs for which no analysis was conducted, and it does not account for rule changes where no associated economic analysis or cost-benefit analysis were performed. With that in mind, the total is a conservative number with additional, annual operational costs potentially being much higher.
Regulatory Cost Increases per Year
2018
APCD Stationary Source Fee Increases: $2.7 million dollars per year.
COGCC Mill Levy Increase: $5 million per year – Mill levy increased from 0.7 to 1.1
COGCC Flowline Rulemaking: Not included in total – No associated economic analysis
2019
AQCC Reg 3 & Reg 7 Rulemaking: $10 million dollars per year
COGCC Flowline Rulemaking: Not included in total – No associated economic analysis
2020
SB-204, Stationary Source Fee Increase: $3.5 million per year beginning FY 21-22 (FY 20-21 was $1.6 million, representing a stair-step increase).
SB-204: Air Enterprise: $5 million per year beginning FY 24-25 (FY 21-22 is $1 million, FY 22-23 is $3 million, FY 23-24 is $4 million, stair-stepping to the $5 million per year cap).
COGCC Mill Levy Increase: $3 million for FY 20-21 – Mill levy increased from 1.1 to 1.5
AQCC Engines, Flowback, & Monitoring: $60 million per year
COGCC Mission Change 200-600: $79 million per year – COGCC cost-benefit analysis provided a range of $13 to $79 million, based on COGCC draft rules issued by staff. That analysis came before commissioners established a larger 2,000-foot setback during the rulemaking process. No additional COGCC cost-benefit analysis was conducted. The annual cost impact from that setback increase could be larger than $79 million, but we are using this figure in this document to be conservative.
COGCC Mission Change 800, 900, 1200: $32 million per year – COGCC cost-benefit analysis provided a range of $21 to $32 million, based on COGCC draft rules issued by staff. That analysis came before commissioners lengthened setback requirements in wildlife areas. No additional COGCC cost-benefit analysis was conducted. The annual cost impact from that setback increase could be larger than $32 million, but we are using this figure in this document to be conservative.
2022
COGCC Financial Assurance Rulemaking: $150 million dollars per year
AQCC GHG Rulemaking: The AQCC cost-benefit analysis gave a range of approximately $59,503,879 to $142,310,503 per year. Industry representatives pressed for the higher amount using best available estimates and actual costs.
2023
REG 7 GHG emissions reductions: Approximately $80 million annually
REG 3: EPA’s Control Cost Manual estimates that the total costs associated with controls range from approximately $34,000 to $9,700,000.
The list above is not comprehensive, as there are other regulatory rulemakings on the horizon that will require new operational costs. However, these are some of the most significant.
Additional Resources & Information
Colorado Oil & Gas Conservation Commission (COGCC) | www.cogcc.state.co.us
COGA Fact Sheets: Economic | www.coga.org/factsheets/category/economic
COGA Fact Sheets: Regulations | www.coga.org/factsheets/category/regulations
