Significant changes to Colorado regulations for mechanical integrity, under Senate Bill 181 (SB 181), which went into effect Jan. 15, are set to add further strain on oil and gas producers, according to an expert in asset performance management with Vysus Group, formerly Lloyd’s Register Energy.

“Many operators based in Colorado will need to allocate additional funds and increase maintenance OPEX budgets to accommodate the new requirements. And the costs are not insignificant,” Jamie Davidson, Americas regional business development manager of asset integrity and maintenance optimization at the Vysus Group, told Hart Energy’s Faiza Rizvi. 

The Colorado Oil and Gas Conservation Commission forecast that these now mandatory tests will result in an annual cost to industry of around $25 million per year, Davidson said.

Jamie Davidson Vysus Group

On the flip side, Davidson believes the enforced maintenance requirements will help oil and gas operators to better understand the condition of their assets and identify areas of risk that could help to curb incident rates in the future. This includes the approximate reduction of up to 200 safety, spill, and release incidents, which will help optimize production, he said. “However, operators need to act fast to avoid falling foul of the new regulations.”

Davidson added that the regulations will also help reduce environmental risk to the operations of oil and gas producers in Colorado. “This is something we are seeing becoming more widespread, especially with the new administration coming into Washington for 2021. There will definitely be an increased focus on environmental performance, which will be supported on a federal level.”

Jump to:

  • Significance of Colorado regulations (0:26)
  • Compliance with regulations (3:36)
  • Long-term impact on operators (7:13)
  • How Vysus Group can help (10:09)