Colorado Energy & Carbon Management Commission Adopts New Rules for Use of Recycled Produced Water
Denver, CO (Mar. 12, 2025) - The Colorado Energy & Carbon Management Commission (ECMC) adopted new rules today that require a statewide reduction in the percentage of fresh water used for oil and gas operations — and a corresponding increase in usage of recycled produced water. Produced water refers to the water that is extracted from underground formations and brought to the surface during the process of oil and gas production.
HB23-1242 directed ECMC to adopt rules that require an iterative and consistent increase in the use of recycled or reused produced water without increasing emissions associated with oil and gas operations in each oil and gas production basin. The new rules adopted by the Commission require that any oil and gas development permitted after Jan. 1, 2026, will be required to use at least 4% recycled produced water or recycled produced water alternative in downhole operations and any development permitted past Jan. 1, 2038, will be required to use at least 35% recycled produced water or recycled produced water alternative in downhole operations.
Based on stakeholder input, the rules also create a recycled produced water credit trading system to enable compliance with the produced water targets. The rules will allow operators that exceed the targets to generate credits that can be used by other operators to meet the targets. That approach uses a proven mechanism to achieve the statutory mandate to reduce fresh water use while providing flexibility for operators in meeting those targets.
“Water is an incredibly important resource to the state of Colorado. This new rulemaking continues ECMC’s nation leading efforts in developing strong regulatory measures in Colorado that are both protective and workable. Leveraging the extensive work and expertise on this topic from the Colorado Produced Water Consortium has allowed us to develop new rules that will significantly decrease the amount of fresh water being used in oil and gas operations, helping Colorado meet our short and long-term climate and environmental goals,” said John Messner, ECMC Commissioner and Chair of the Consortium.
HB23-1242 established the Consortium in the Department of Natural Resources to bring together state and federal agencies, research institutions and institutes of higher education, environmental non-governmental organizations (NGOs), organizations focused on environmental justice and disproportionately impacted communities, local governments, affected industries, and others to collaboratively evaluate the reuse and recycling of produced water. The Consortium was directed by statute to provide data, studies, and recommendations to the Commission to inform the rulemaking and, in turn, the Commission’s rules were informed by those recommendations.
“Our primary goal at the Consortium is to help reduce the consumption of fresh water within oil and gas operations by increasing the use of recycled produced water. The consortium is looking to address barriers associated with the increased reuse and recycling of produced water at oil and gas sites without increasing emissions,” said Hope Dalton, Consortium Director.
Building upon existing standards, the new rules require all oil and gas development plans (OGDPs) to include a commitment and plan to recycle and reuse produced water in downhole operations. An OGDP is a permitting process that requires energy development operators to seek approval from ECMC for each proposed oil and gas location. Operators are now required to report fresh and recycled produced water usage by location and vehicle miles traveled for transporting fresh water or produced water to a location.
Approval of the Produced Water Rulemaking is a culmination of over a year's worth of effort, including extensive outreach to and input from the public and a diverse group of stakeholders and is inclusive of the Consortium’s extensive data-informed recommendations. It also follows the recommendations from the eight studies published by the Consortium in 2024:
- Initial Guidance Documents and Case Studies to Promote Best Practices for In-field Recycling and Reuse of Produced Water Report (March 1, 2024)
- Initial Produced Water Regulatory Policy Coordination Report (May 1, 2024)
- Current State of Produced Water Infrastructure, Storage, and Treatment Facilities Across the State with Emphasis on the Denver-Julesburg Basin Report (July 1, 2024)
- Initial Availability of Produced Water for Reuse and Recycling Analysis Report (August 1, 2024)
- Strategic Priorities on Topics Related to Produced Water (August 16, 2024)
- Initial Report on Infrastructure Storage, and Treatment Facilities Necessary to Achieve Different Levels of Recycling & Reuse of Produced Water (August 30, 2024)
- Identifying Barriers to the Safe Recycling and Reuse of Produced Water Report (October 30, 2024)
- Produced Water Reuse and Recycling Goals and Contemporaneous Decreases in Fresh Water Use Report (December 2, 2024)
“I’m galvanized by the consensus-building collaboration that made today’s rulemaking possible. Produced water is a complex matter and stakeholders advocated for disparate perspectives — and we collectively found common ground that puts in place protective measures,” said ECMC Chair Jeff Robbins. “I’m particularly grateful for the leadership and forward thinking of my fellow Commissioner John Messner who was instrumental in establishing and chairing the Produced Water Consortium and forging our path forward with Consortium Director Dalton.”
These new rules follow a series of recent and significant new rules at ECMC. As the state of Colorado addresses climate change and sets a path forward for net-zero greenhouse gas emissions by 2050, the General Assembly in 2019 put in place a new mission for the Energy and Carbon Management Commission (ECMC). ECMC now regulates not only the oil and gas energy development sector but also emerging sectors of geothermal and carbon storage — and does so in a manner that protects public health, safety, welfare, the environment and wildlife resources.
The full rulemaking is published online at https://ecmc.state.co.us/#/home.
About the ECMC
The mission of the Colorado Energy & Carbon Management Commission (ECMC) is to regulate the development and production of the natural resources of oil and gas, deep geothermal resources, the capture and sequestration of carbon, and the underground storage of natural gas in a manner that protects public health, safety, welfare, the environment and wildlife resources. Visit the ECMC website for more information.
About the CPWC
The Colorado Produced Water Consortium, established by HB23-1242 in the Colorado Department of Natural Resources, consists of individuals with expertise in produced water related to oil and gas operations, environmental impacts, environmental justice concerns, and community perspectives. The primary goal of the Consortium is to reduce the use of fresh water and increase the recycling of produced water in oil and gas operations. Visit the CPWC website for more information.