Environmental Justice Risks Unique to Energy Communities

Environmental Justice is commonly defined as ensuring that all individuals, regardless of their socioeconomic status, race, national origin, tribal affiliation, or disability, are actively involved in decision-making processes that affect their health and environment. This definition also emphasizes protection from adverse impacts, including those related to climate change and systemic inequalities, and ensures equitable access to a healthy, sustainable, and resilient environment where people can live, work, learn, and engage in cultural practices without facing undue burdens. (US Environmental Protection Agency)

In the scope of our research, we adopt a definition of EJ which is not just the distribution of environmental benefits and harms, but as the rehabilitation of systems that have perpetuated such inequities. (Pastor et al. 2006) This encompasses three dimensions of justice:

• Procedural Justice: ensuring all communities, especially those historically marginalized, have a meaningful voice in environmental decision-making;
• Distributive Justice: ensuring fair access to environmental benefits;
• Corrective Justice: addressing past and present injustices.

Energy Communities (ECs) are usually located in areas with a high density of energy production facilities and engage with the development and management of energy projects. These communities experience unique environmental and economic challenges associated with energy development that differentiate them from non-energy communities (non-ECs).

The Inflation Reduction Act acknowledges the need to provide additional financial incentives to ECs, enabling them to transition from polluting industries to a clean energy future. The IRA defines energy communities as:

• Areas that include brownfield sites defined under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA);
• Regions with significant employment or tax revenue from coal, oil, or natural gas activities, and higher-than-average unemployment rates;
• Census tracts, or their neighboring areas, where coal mines closed after 1999 or coal-fired power plants were retired after 2000.

However, there has been some debate that the current definition of Energy Communities by IRA does not sufficiently reflect the nature of these communities and does not take into account changes in energy development in the near future. (World Resources Institute) Currently in some States like Colorado, ECs under the IRA definition sometimes don't cover areas with a high density of oil & gas facilities (illustrated in the map below), which makes it difficult for these regions to obtain tax benefits and facilitate their transition to clean energy.

Thus in this research, we adopt a broader definition of EC, encompassing communities with high employment rates in fossil fuel industries and those located in areas with significant energy production or legacy energy infrastructure.

Colorado is the fourth-largest oil-producing state, accounting for nearly 4% of total U.S. crude oil output (U.S. Energy Information Administration). At the same time, the state is actively pursuing a transition to clean energy to meet its greenhouse gas emissions reduction goal. In February 2024, Governor Jared Polis released an updated version of  Colorado’s Greenhouse Gas Pollution Reduction Roadmap , originally introduced three years ago, to help the state achieve its target of cutting GHG emissions by 50% by 2030 (Governor Jared Polis 2024). This roadmap outlines several objectives: creating new clean energy jobs for Colorado, reducing pollution and improving public health, supporting communities and workers reliant on traditional fossil-fuel industries in their transition, and ensuring that disproportionately impacted communities share the benefits of these efforts.

Even though no region in Colorado fits the EC definition as defined by the IRA, many Coloradans are employed by the fossil fuel industry and identify with the concept of ECs. Meanwhile, many communities in Colorado face significant environmental impacts from oil and gas (O&G) development (the Map Tour below offers a few examples), the severity and complexity of the environmental conditions in these communities have made Colorado a focal point for EJ advocacy.

The implementation of SB19-181, intended to regulate oil and gas activities, has fallen short of its goals. The rulemaking process has been criticized for weakening the bill's original intentions. Key terms in the legislation have not been defined clearly, leading to unclear regulations and making certain rules difficult to enforce. The situation is exacerbated as regulators overseeing O&G activities could drastically alter the enforcement of SB19-181, adding another layer of instability. Overall, the inadequate implementation of SB19-181 highlights the urgent need for clear and enforceable regulations that support both environmental health and economic stability.

The state has also faced challenges in developing an adequate air quality monitoring system that enables residents to monitor air pollution in their neighborhoods and implement measures to protect vulnerable populations, such as children and the elderly.

Currently, the Colorado Air Quality Control Commission (AQCC) is responsible for setting air quality standards, but the enforcement of these standards has been hampered by insufficient coordination with the Energy and Carbon Management Commission (ECMC). This disconnect has resulted in inadequate air quality monitoring, with local governments left to fill the gaps, often without the necessary resources or authority.

As the map below suggests on a state level, air monitors are to some extent aligned with the distribution of pollution sources from the oil & gas industry. However, the number of monitors implemented is not sufficient enough to provide comprehensive public health data, especially in communities living near operating oil & gas facilities or communities experiencing a higher-than-average asthma prevalence among adults.

Some significant polluters, such as the Suncor refinery, have state-operated monitoring equipment nearby, while smaller operators across the state have little oversight to ensure they are emitting pollutants within the permitted thresholds. This has led to significant discrepancies in air quality data across the state, with some communities facing more severe environmental risks than others due to the lack of consistent monitoring and enforcement.

In Colorado, the regulatory landscape governing oil and gas development has historically prioritized mineral rights over local governance and environmental concerns. Federal and state-level precedents have centralized control over O&G regulation, limiting municipalities' authority to enforce stricter local regulations. This approach continues to favor industry demands despite public health and environmental objections. Despite recent reforms through SB 19 - 181 aiming at balancing development with public health and environmental protection, this industry deference persists.

The environmental advocacy landscape in Colorado is currently fragmented with large, established organizations dominating the political sphere while smaller grassroots groups are marginalized. This division deepened after the 2024 legislative session, where major environmental organizations negotiated a compromise to halt legislative efforts in exchanged for reduced industry campaigning with stakeholders. Smaller environmental organizations were not consulted and were completely excluded from this conversation.

These organizations feel betrayed and argue that the deal undermines their credibility and coalition-building efforts. This has led to a very fragmented advocacy environment, which highlights the urgency for greater collaboration and inclusivity within the environmental movement.

Many communities living near oil & gas facilities in Colorado face constant environmental and health risks as a result of this industry. As the  Oil & Gas Threat Map  indicates, there are 159 schools & daycares in Colorado within 1/2 mile of an active oil & gas facility. Additionally, analysis using  data from ECMC  shows that until June there have been 369 incidents of recent spills in Colorado in 2024, with the total volume of recent oil spilled sums up to 1604 BBLs. A few spills occurred in residential and agricultural areas, posing a great health risk to local residents and leading to potential soil & water contamination.

Data from the EPA AirToxScreen showed that on a national level, 236 counties in 21 states face cancer risks related to oil and gas pollution, exceeding the EPA’s one-in-a-million threshold level of concern.

A closer analysis looking into individual counties' cancer risk in Colorado shows that in counties where data is available, counties with high oil & gas production tend to have an elevated cancer risk. There's also some correlation between an average oil & gas induced risk with other types of cancer risk from chemicals typically released by oil & gas production (such as Formaldehyde, Benzene, Acetaldehyde, and Ethylbenzene). Still, the correlation does not seem to be a strong one on a state level in Colorado.

 A study from the Clean Air Task Force  also pointed out some limitations of evaluating the risk from oil & gas production: The AirToxScreen assessment only takes into account the cancer risk related to toxic air emissions from the oil and gas industry. It does not account for the other health impacts, such as respiratory risks, from air toxics emitted from the oil and gas industry. It also does not account for health impacts from particulate matter and ozone-related air emissions, nor does it account for the health impacts of soil and water contamination caused by oil and gas development. Based on these considerations, the data given in AirToxScreen could likely be an underestimate of the full health impact of oil and gas operations, and the industry's impact on communities may be more serious.

Analysis looking on a national scale census track data shows that environmental impact from fossil fuels has disproportionately impacted energy communities. Approximately 73% of the population living in energy communities experience a higher than the national level of PM2.5 level, compared to 39% for people living in non-energy communities. This highlights the necessity that a clean energy transition from fossil fuels should effectively mitigate the air quality burden on energy communities.

Energy burden, the percentage of household income spent on energy costs, is a critical indicator of financial strain and economic vulnerability. The analysis presented below utilized data from the Department of Energy LEAD Tool on energy burden for different Area Median Income (AMI) categories, spanning from households earning 0-30% of AMI to those earning above 150% of AMI, differentiating between total energy burden and the burden associated with specific fuel types, including electricity, gas, and other fuel sources.

The findings are summarized in the table on the right. While the disparity in gas costs favors EC households throughout different income ranges, higher electricity and other fuel costs consistently contribute to a greater overall energy burden compared to non-EC households.

These findings underscore the need for a just transition framework that prioritizes the needs of ECs in the broader shift towards clean energy. A truly just transition will ensure that the benefits of clean energy—such as lower energy costs, improved air quality, and job creation—are equitably distributed and that no community is left behind.

The analysis also reveals that ECs consistently report lower average incomes compared to non-ECs, with a mean income difference of approximately $164.73. The income disparities observed between ECs and non-ECs suggest that ECs have a heightened vulnerability to economic disruptions and a reduced capacity to absorb the costs associated with energy transitions, highlighting the need to address the root causes of income inequality in ECs as part of a broader strategy to reduce energy burdens.

• Create a balanced regulatory framework that prioritizes community engagement, ensuring enforceable and robust environmental protections.
• Establish federal and state offices dedicated to managing transitions in energy communities.

• Focus on job creation and economic resilience in energy communities (ECs) impacted by fossil fuel energy development.
• Implement targeted interventions to address economic disparities, directing parts of the revenue from clean energy development to local energy communities, and improving access to affordable clean energy options such as Community Solar.

• Engage marginalized communities in decision-making processes.
• Foster direct community participation and local voice empowerment, creating opportunities that benefit all parties involved in the transition.

• Prioritize coalition building across diverse interests and organizations.
• Building strategic partnerships with stakeholders to reduce regulatory and economic uncertainty.