Country
Assessment
In May 2017, at the One Planet Summit in Paris, Colombia joined Canada, Chile, Costa Rica, Mexico, and the US states of California and Washington and the Canadian provinces of Alberta, British Columbia, Nova Scotia, Ontario, and Quebec in launching the Carbon Pricing in the Americas Cooperative Framework. Law 1931/2018 established the National Program of Greenhouse Gas Emissions Tradable Quotas, a national emissions trading system (sistema de cupos y créditos), which is still awaiting implementation.
No evidence regarding fiscal and emission reduction incentives could be found in the sources consulted.
Article 22 of MME Resolution 40066/2022 (as revised in 2023, see footnote 3) requires operators to comply with flare efficiency standards, which, along with other technical and reporting requirements, will be developed by the regulator by the end of October 2023. Operators must have their flares inspected and results reported within 12 months of the issuance of the technical guidelines. Inspections can be done by entities approved by the regulator or international accreditors. All flare volumes must be reported monthly via Form 30 DH (Article 24). Title 5 (Articles 42–49) of MME Resolution 40066/2022 (revised in 2023) focuses on natural gas (methane) leaks. Article 42 requires operators to identify and quantify the leaks. Article 43 lists instruments that can be used for detection of leaks and quantification of leaked volumes; and allows for approved engineering calculations in exceptional cases. The instruments must measure concentrations equal to or greater than 500 parts per million. A baseline of leaked volumes must be established for all facilities and all equipment and components covered in this resolution. The regulator may inspect and audit the facilities to ensure accuracy and compliance (Article 49). Title 6 provides detailed instructions on leak detection and repair. Article 50 states that the required leakage elimination program needs to cover at least 95 percent of all leaking gas.
Upon expiration of the terms indicated by the ANH for the payment of fines or the fulfillment of the obligations breached by the contractor, the ANH may terminate the contract if the contractor has not fulfilled its obligations. Article 11 of the Petroleum Code, 1956, states that any difference of fact or a technical nature that may arise between the interested parties and the government on the matters dealt with by the code that cannot be resolved amicably will be submitted to the opinion of three experts, one selected by the government, one by the interested party, and one by a third party. Article 68 states that the government may terminate any contract or cancel a license granted if a dispute is decided in the government’s favor.
MME Resolution 181495/2009 establishes fines specific to gas flaring and venting. According to Article 52, operators must pay royalties on flared, vented, or otherwise wasted gas unless an exception was obtained from the ANH. Article 64 imposes a fine of up to US$5,000 on any violation, in accordance with Article 67 of the Petroleum Code . Article 82 in MME Resolution 40066/2022 confirms that the sanctions for infringement of its rules are those in Article 21 of the Petroleum Code and Article 67 of Decree 1056/1953 . Article 26 of Law 1753/2015 states that the MME may impose fines of 2,000–100,000 times the legal monthly minimum wage for each breach of the obligations established in the Petroleum Code. The ANH may impose fines in case of a breach of any of the contracts it oversees, up to the value of the unfulfilled activity if the obligations have associated monetary values. If they do not, the ANH can impose a fine of up to US$50,000 for the first breach. Each subsequent breach will result in a fine up to the smaller of twice the amount initially imposed or the value of the contract’s guarantee.
MME Resolution 41251/2016 covers measurement frequency and methods. Article 7 states that the quality of gaseous hydrocarbons should be determined by establishing the density, composition, and calorific value. For the official measurement points, monthly analysis of hydrocarbons with up to 12 carbon atoms using gas chromatography should be performed. Quality tests should be carried out on representative samples taken at official sampling points using Section 14 of the latest version of the American Petroleum Institute’s Manual of Petroleum Measurement Standards. Article 17 states that all gas produced should be continuously measured. A daily log of physical and electronic data should be kept per the American Petroleum Institute’s Manual of Petroleum Measurement Standards. In the late 2010s, the Comptroller General of the Republic (Contraloría General de la República), the auditor of the ANH, investigated whether the ANH was adequately enforcing natural gas production measurement and whether the information provided was transparently disclosed with easy and user-friendly access. The Comptroller General of the Republic concluded that the data and the disclosure procedures conformed to industry best practices and were managed in a timely, comprehensive, and reliable manner.
Articles 31–33 in MME Resolution 40066/2022 requires new projects to be designed to capture vented gas. Existing projects have to upgrade their facilities for capture or flaring of otherwise vented gas within the required timeframe of two years.
Article 52 of MME Resolution 181495/2009 details possible flaring exceptions in cases where gas capture is not economically viable. The operator must justify that gas capture is uneconomic, and the MME must approve the justification. For routine flaring, Articles 11 and 16 in MME Resolution 40066/2022 reaffirm the above approach for gas that cannot be produced economically viable.
Ecopetrol controlled the development of hydrocarbon resources until Presidential Decree 1760/2003 introduced two essential changes in the Colombian petroleum industry: creation of the ANH as a special entity in charge of administering and regulating hydrocarbons in Colombia (later, Decree 4137/2011 modified the legal status of the ANH and converted it into a state agency) transformation of Ecopetrol into a partially state-owned company (Law 1118/2006) dedicated to upstream, midstream, and downstream oil and gas activities within and outside of Colombia, governed by the applicable private law. The ANH is under the MME. It has a distinct legal status and enjoys administrative and financial autonomy. Ecopetrol became another company in the market, leaving the sole regulatory and administrative management of hydrocarbons to the ANH. ANH oversees all contractual oil and gas arrangements except for the association contracts Ecopetrol held as of December 31, 2003. Decree 70/2001 grants powers to the MME as the principal governing body responsible for upstream oil and gas operations. Accordingly, MME Resolution 181495/2009 updated by Resolution 40098/2015, establishes that the MME is responsible for issuing any technical rules and administrative decisions associated with the regulation and imposing applicable sanctions for noncompliance. With Resolution 180877/2012, the ANH and MME executed an interadministrative agreement that delegated certain inspection functions and regulatory activities to the ANH. When an environmental license is required, it may be granted only at the national level by the National Environmental Licensing Authority (Autoridad Nacional de Licencias Ambientales) in accordance with Decree 1076/2015 .
Any activity or operation undertaken by the operator as part of an oil and gas contract requires the relevant documentation and forms to be filed with the MME for it to approve and control the applicable activity. Article 10 in MME Resolution 40066/2022 requires a flaring authorization during the production phase. Article 18 provides the details required for a flaring authorization. Specific requirements for routine flaring are stipulated in Article 11, and for unforeseeable events, Article 19 provides for situation-specific flaring authorizations. ANH Circular 18/2014 on gas control and flaring specifies that all requests to flare should be submitted in writing to the ANH. The ANH authorizes the gas volume, time of flaring, and whether the gas flared should be subject to royalty.