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Colorado doesn’t want its natural gas industry to go up in flames, which is why the sector there joined with its environmental counterparts to craft new rules to curb potent methane releases that are linked to climate change.

The state is the first one to regulate such heat-trapping emissions from the development of oil and gas, which make up a healthy share of the economy there. Essentially, Colorado’s Air Quality Control Commission polished up a pending proposal that would require producers to install the tools to capture 95 percent of methane gas leaks coming from wells and pipes, while also limiting the volatile organic compounds that lead to smog.

“Several industry leaders already implement some of the measures reflected in these rules,” says Will Allison, director of the state's Air Pollution Control Division, which voted yesterday 8-1 to enact the regs. “Now, these protective, common-sense measures will be required of all operators across the state.”

According to the U.S. Energy Information Administration, Colorado ranks sixth and ninth nationally when it comes to natural gas and oil production, respectively. That equates to jobs and prosperity for many, and a heaping portion of the state’s tax revenues.

But the industry there and elsewhere has been under attack because of the hydraulic fracturing technique used to recover unconventional natural gas, or shale gas. Polluted drinking water is one issue. And so is escaping methane that is a lot more powerful than carbon dioxide when it comes to trapping heat, although its lifespan is 20 years compared to 100 years for the latter. In addition, the mining technique is adding to smog levels around the state.

Beyond the control and capture of the vast majority of methane releases, energy producers must also regularly inspect their sites and patch leaks within 15 days. Business, generally, said that they would foot the bill for the effort.

Many of Colorado’s oil and gas firms backed the rules, realizing that they had to win the confidence of the state’s residents. Some producers, however, have expressed that the regs will be too costly. The Colorado Oil and Gas Association and the Colorado Petroleum Association say that the total cost to comply will be $100 million, or $60 million more than what state regulators had calculated.

“The new rules accomplish much, which we support,” says Doug Flanders, director of policy and external affairs for the state’s oil and gas group. “Unfortunately, we were not successful in ensuring that the rule accommodates the differences in basins and operators.” Corp. backs that position.

However, Corp., Encana Corp and Inc. have been among the state’s largest producers to work with the Environmental Defense Fund to provide the right guidance and technology, reports Bloomberg news service. It adds that Noble will invest $12 billion in the state while Anadarko will plow in $2 billion, all over five years.

The way in which Colorado has gone about addressing this issue may become a national model, given that the major parts of the country are experiencing the shale gas revolution.

What to do? Reducing greenhouse gas levels is urgent for most greenies, although some of them are remiss to accept natural gas as a viable vehicle, releasing 45 percent fewer carbon emissions than coal. Eco-activists, furthermore, say that the federal government has a role in the oversight of hydraulic fracturing, noting that the process could adversely affect drinking water supplies.

The stakes: The estimates of recoverable natural gas in the United States have grown from 200 trillion cubic feet in 2005 to 350 trillion cubic feet in 2012. The fuel could supply as much as half of all electric generation in two decades, up from about 30 percent today.

“Natural gas is an important transition to a carbon free economy provided we don’t go too many decades,” says Tom Wigley, climate scientist with University Corporation for Atmospheric Research. “After 30 or 40 years, it won’t matter what we do.”

The conciliation showed by both Colorado’s industry and its environmental advocates is praiseworthy, demonstrating that opposing forces can find common ground and create a practical regulatory structure. It’s not the ideal solution for any stakeholder. Yet, it could become a blueprint for other states facing the same divisive issues.