Regulatory Costs

​Sweeping legislative and regulatory changes between 2018 and 2022 have added almost $500 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

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2019

​AQCC Reg 3 & Reg 7 Rulemaking:

$10 million dollars per year

​COGCC Flowline Rulemaking:

Not included in total – No associated economic analysis

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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.

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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. 

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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. 

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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

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