Colorado public health officials have let oil and gas companies begin drilling and fracking for fossil fuels at nearly 200 industrial sites across the state without first obtaining federally required permits that limit how much toxic pollution they can spew into the air.

Air pollution control officials at the Colorado Department of Public Health and Environment allow the industry to emit hundreds of tons of volatile organic chemicals, cancer-causing benzene and other pollutants using an exemption tucked into the state’s voluminous rules for the industry — rules that former Gov. John Hickenlooper, state leaders and industry officials long have hailed as the toughest in the nation.

They rely on this 27-year-old state exemption to give oil and gas companies 90 days to pollute, then assess what they need from Colorado regulators before applying for the air permits that set limits on emissions from industrial sites.

“It is a loophole that allows pollution at some of the times when the pollution is the most extreme,” said U.S. Rep. Diana DeGette, D-Denver, who chairs a congressional panel that oversees the Environmental Protection Agency.

Colorado’s practice may not be legal under the federal Clean Air Act. While oil and gas companies are required to install controls to minimize emissions during the 90-day window, state inspectors don’t check unless they receive specific complaints. State health officials told The Denver Post they have begun a review of whether the exemption complies with federal law. This comes as Gov. Jared Polis has signaled his intentions to try to improve Colorado’s deteriorating air quality.

Industry officials say they run their facilities to meet state health standards whether they are operating within the 90-day exemption period or have obtained permits — but need the flexibility to determine how much a site will pollute before limits are set.

Colorado air pollution permits typically set limits around 50 tons a year for volatile organic chemicals, state officials said, in addition to other toxic pollutants. No limits are set for methane, which accelerates global warming.

“The permitting requirements in Colorado are some of the most stringent in the United States, and having an appropriate amount of time to test and measure potential emissions from a production facility is important to ensure data integrity,” Anadarko Petroleum spokeswoman Allyson Manley said. “Air quality is impacted by many different sources in the DJ Basin, and reducing emissions from our operations has been and will continue to be a major focal point for us.”

Nearly 200 sites in Colorado

Lawmakers who are working to re-focus oversight of Colorado’s multi-billion dollar fossil fuels industry failed to consider how state health officials grant oil and gas companies exemptions to pollute without limits, though DeGette and community groups are raising concerns.

“Some mornings, I’d come out my front door and it would take my breath away,” said Stephanie Nilsen, who lives on a horse-breeding ranch northwest of metro Denver near Berthoud, where Extraction Oil and Gas has established two multi-well industrial facilities.

“If it could do that to me, what was it doing to my pregnant mare? It is just unfair. Air quality? They screwed me,” Nilsen said, adding that her partner suffered nosebleeds last year, one horse died and another suffered a miscarriage.

State air regulators have allowed seven oil and gas companies to operate without permits at 15 multi-well industrial sites close to communities along Colorado’s northern Front Range, state records show, with combined volatile organic chemical pollution estimated at 3 tons a day.

Overall, companies are polluting without permits at 193 sites in Colorado, mostly concentrated in Weld County, according to a document reviewed by The Denver Post and information state health officials provided in response to Post queries.

State health officials said air pollution permit applications for those 193 sites now are being processed, but that takes time, meaning oil and gas companies often can operate without air permits for longer than those first three months.

The companies involved include Extraction, Anadarko, Noble Energy, Crestone Peak Resources Operating, Highpoint Operating, Great Western Operating, SRC Energy and PDC Energy.

Federal rules on pollution

State-issued air pollution permits long have served as a primary means of protecting people from harmful pollution under the federal Clean Air Act, which lists 187 hazardous air pollutants known or suspected to cause cancer or other serious health problems.

The Clean Air Act requires the EPA to set national ambient air quality standards for some pollutants, including sulfur dioxide, nitrogen oxides, ozone, carbon monoxide, volatile organic compounds — also known as VOCs — and particulates. The EPA is supposed to make sure states, by issuing permits that set limits, track the pollutants companies emit and how much — so that limits can be enforced and reasonable air quality maintained.

In Colorado, state health officials recently testified to lawmakers that the oil and gas industry is by far the biggest source of VOCs and a significant source of methane, a potent heat-trapping gas that’s causing climate change. (While companies in Colorado are supposed to control methane pollution, state health officials don’t set limits for methane in permits.) Pollution from the oil and gas industry also includes cancer-causing benzene and so-called BTEX chemicals toluene, ethylbenzene and xylene.

Air pollution from oil and gas development often intensifies during the first 90 days when companies drill and stimulate wells through hydraulic fracturing — injecting water, sand and chemicals deep underground. According to a state analysis, “because production is typically at its highest during this initial period, significant emissions can occur before controls are installed.”

But rather than set limits before companies begin projects, Colorado Department of Public Health and Environment air pollution control officials routinely let companies pollute without permits for at least three months. Pollution control devices are supposed to be in place to minimize emissions, but the state doesn’t verify that. And it’s unclear whether state inspectors have visited any sites in response to complaints to verify whether pollution controls are in place.

Colorado officials’ rationale is that this approach lets companies establish how much a site is likely to pollute so that state regulators later can take that into account when they eventually issue air pollution permits. The more fossil fuels a company extracts, the more pollution is emitted into the air.

Ex-inspector alleges “friendliness with industry”

Colorado air pollution regulators serve the industry, alleged former state inspector Jeremy Murtaugh, who was placed on leave in January and now is seeking whistle-blower legal protection.

“Polluters are being allowed to operate, to make more profits,” said Murtaugh, a University of Notre Dame graduate and a father of two children, in an interview.

Tougher enforcement by the state could have meant “thousands of tons less volatile organic compound chemicals and other pollutants emitted per year. It could have meant that our area wouldn’t be exceeding the federal ozone health standard. … Residents of Colorado would not have been exposed to toxic contaminants such as benzene, toluene, ethylbenzene and xylenes.”

Murtaugh described an agency culture in which air inspectors were told it was their job to serve companies. “We were instructed to call the industry our ‘customers,’ ” he said. “It reveals the attitude. I always chafed at that. I always thought our customers were air-breathers.”

For a decade, air along Colorado’s Front Range has flunked federal health standards for ozone, which is formed when VOCs bake in sunlight and create smog.

“There seems to be a mismatch between what officials have been saying about Colorado having some of the toughest rules in the nation and our air quality getting worse. The reason is this lack of enforcement and a friendliness with industry,” Murtaugh said.

The WildEarth Guardians environmental advocacy group, which first raised the issue of allowing pollution without permits at the 15 industrial sites near Front Range communities, is preparing a lawsuit on behalf of Colorado residents.

“It is hard to fully quantify the harms to our air and our health, but based on what we know of the problem, they are substantial,” WildEarth attorney Jeremy Nichols said. “The industry is developing massive multi-well facilities that have the potential to emit tens of thousands of tons of VOCs — yet operating with no permit and no meaningful assurances that they are meeting any level of emission controls necessary to protect clean air.”

State exemption clashes with federal law

DeGette, in her position leading the House Energy and Commerce Committee’s Oversight and Investigations panel that monitors the EPA, is demanding change.

She sent a letter to Polis “regarding allegations that several oil and gas companies are routinely violating federal law by drilling in Colorado without first obtaining the required Clean Air Act permits.” DeGette told Polis that “energy development must not come at the expense of the health and well-being of our communities.”

In an interview, DeGette said her staffers have discussed with state health officials the legal exemption they cite as the basis for allowing pollution without permits.

“If you have a loophole like this exception that has been identified, you need to close it,” she said. “What should happen now is that the state should change its policy. They should first process the permit and then allow oil and gas exploration to occur.”

EPA officials may have signed off on Colorado’s overall air quality plan, called a State Implementation Plan, DeGette said, “but it is unclear whether the EPA really understood that this three-month period was happening.”

Colorado public health officials plan to investigate “if the (state’s) regulatory structure complies with the technical requirements of the Clean Air Act,” Garry Kaufman, director of the Air Pollution Control Division, told The Denver Post in an emailed response to queries.

“We have been in contact with Representative DeGette’s office to ensure that our regulations not only minimize emissions from the oil and gas sector but also fully comply with the dictates of federal law,” Kaufman said. “As a department, we are determined to be more assertive than ever in ensuring that we hold corporate polluters accountable and ensure every Coloradan has clean air to breathe.”

Officials at oil and gas companies operating in Colorado said they need the ability to produce for 90 days before obtaining permits.

“We believe it is necessary to the goal of collecting actual emissions data and working with real numbers, rather than models or estimates,” Extraction Oil and Gas spokesman Brian Cain said in an emailed response to queries.

EPA officials said they’ve had “an initial discussion” with Colorado health officials about the state’s Clean Air Act permitting program.

“We are examining these concerns with the state. While there is reasoning behind the 90-day timeframe, we also recognize that the nature and size of these sources (well sites and drilling sites) has evolved in the two-plus decades since Colorado initiated the time frame for permitting, as have VOC sources and emissions and non-attainment designations for parts of the Front Range,” agency spokesman Andrew Mutter said in an emailed response to Post queries.

The American Petroleum Institute’s Colorado Petroleum Council and the Colorado Oil and Gas Association — industry lobbying groups — offered no perspective on the issue.

Polis has prioritized protecting health and safety, “which extends to doing everything we can to control emissions,” staffers from the governor’s office said in a prepared response to questions. Polis was not available to comment directly, officials said, and it was unclear whether he is prepared to eliminate the 90-day exemption that DeGette has targeted.

“While CDPHE does currently require state-of-the-art emissions controls during the first 90 days of production, successful passage of Senate Bill 181 will position us to adopt rules to further minimize harmful emissions at every stage of oil and gas production,” the Polis staffers wrote.

“We did not feel it was safe”

Fifty miles north of Denver near Berthoud, increasing industrial air pollution as fossil fuel companies expand in Weld County is changing an agricultural area at the foot of the snow-capped Rocky Mountains.

Foul fumes wafted over a yellow farmhouse where Nilsen, 53, and her partner Janis Butterfield, 67, run their H H Ranch. The fumes smelled most intense during the early stages — pad construction, installation of processing facilities, drilling, well stimulation by hydraulic fracturing — at two facilities run by Extraction Oil and Gas: a multi-well industrial pad installed in 2017 about 2,000 feet south of the ranch, then a second pad built in 2018 north of horse pastures about 1,000 feet from the house.

A mare, Goldie, miscarried July 23 as crews were working on the north facility, Nilsen said. Another horse died in November after losing more than 300 pounds. “He had no reason to lose weight like that,” Nilsen said.

The H H Ranch then stopped accepting horses from clients for breeding, Nilsen said. “We did not feel it was safe.”

It was unclear what contaminants Extraction emitted, how much and what caused the horse deaths and Butterfield’s nosebleeds, which she initially attributed to dry air. Scientific research has established that oil and gas development involves as many as 61 hazardous air pollutants. Exemptions from the federal Emergency Planning and Community Right-to-Know Act let companies withhold information on some of the chemicals they use and emit.

Nilsen and Butterfield raised concerns with Extraction and then complained to the Colorado Oil and Gas Conservation Commission, a state agency charged with fostering oil and gas development while also protecting public health and the environment by balancing interests.

The commission sent an inspector who drove by the farm, Nilsen said. “The damage was taking place when they were erecting the sites. To come out six months later, of course, they’re not going to find the same things.”

Cain, the Extraction spokesman, acknowledged company officials “were frequently in communication” with residents. “Those residents chose to contact the relevant regulatory authorities on this matter, who did not issue any violation,” he noted.

Nilsen said she had no idea state officials had allowed Extraction to operate last year without an air pollution permit. She assumed the facilities by now are operating under permits with limits that are enforced. State health officials, however, said a permit application for that site is still being processed.

At the ranch last week, industry trucks and tankers rolled by kicking up dust and spewing diesel fumes, though emissions from oil wells, storage tanks and processing equipment weren’t noticeable.

But Nilsen and Butterfield inhaled foul-smelling pollution last year and worry health harm may already be done and that they could face cancer or other problems in the future.

“Air quality. I want it to be better. I want it to be known. I want it to be communicated,” Nilsen said. “What are they drilling for? What is coming out from that facility? And how many days did we sleep through those smells in the evenings?”