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New local control oil and gas drilling rules blasted by both industry, ‘frack-tivists’

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October 10, 2015, 7:40 am

garcogasrigEditor’s note: A version of this story first ran in The Colorado Statesman:

Colorado’s chief regulatory agency for oil and gas drilling on Tuesday released new rules to give local governments more control over industry operations, but community activists are largely unimpressed and appear poised to ratchet up the battle at the ballot box next year.

The proposed rules were born of Gov. John Hickenlooper’s Oil and Gas Task Force that was formed to head off contentious local-control ballot questions in 2014. The task force’s recommendations 17 and 20 directed the Colorado Oil and Gas Conservation Commission to draft rules allowing for more town and county input into state-regulated drilling operations.

But what the COGCC unveiled late Tuesday and will further refine during stakeholder meetings next week falls far short of what community “frack-tivists” had hoped for, and goes way too far in the opinion of industry officials.

“It was an exercise in kicking the can down the road and now we’re seeing the result of that task force,” said Lauren Swain of the newly formed group Coloradans Resisting Extreme Energy Development (CREED), which is weighing a variety of possible anti-fracking ballot questions. “There is no protection for communities from the impacts of fracking coming from rules 17 and 20 because they do not have the right under these rules to say no to any [drilling] sites.”

Dan Haley, president and CEO of the Colorado Oil and Gas Association (COGA), issued a statement indicating the industry trade association’s displeasure with the new rules.

“While we are still reviewing the proposals in detail, it’s clear the draft rules far exceed the actual recommendations put forward by the governor’s task force,” Haley said. “We’re disappointed this draft seems to dismiss the hard work of the governor’s task force, which spent nine months deliberating and deciding on these recommendations.”

Once adopted later this year, the rules stemming from recommendation 17 will apply to all pending and future applications for “Large Urban Mitigation Area Facilities,” which the COGCC defined as eight or more horizontal wells with a certain lateral length and at least 4,000 barrels of on-site hydrocarbon storage capacity. Defining a large UMA facility was one of the major sticking points in drafting the rules, according to COGCC Director Matt Lepore.

A company proposing a drilling project of that scale will then be required to notify the local government with land-use authority and offer to consult with them at least 90 days before applying for state approval and before any surface-use agreement has been signed with a local landowner.

Once approved, the rules stemming from recommendation 20 would kick in March 1, 2016, and require oil and gas companies to register with towns (but not counties) they intend to drill in and then provide a five-year estimate of the number of wells they propose drilling.

“These rules, as written, do not provide enough protections for Colorado families,” said Sara Barwinski, who served on the governor’s task force for five months. “I am afraid that once these rules are adopted, there will be more neighborhood drilling – not less. This draft is not what was called for by the oil and gas task force.”

Other task force members, including La Plata County commissioner and task force co-chair Gwen Lachelt, did not return calls requesting comment.

A series of three stakeholder meetings will be held at the COGCC’s office in Denver Wednesday through Friday of next week, at which point it’s expected negotiations will continue and the rules will further “evolve,” according to a cover letter released by Lepore on Tuesday. The first public hearing is scheduled for Nov. 16-17, also at the COGCC’s office.

Lepore told The Statesman in interview last month that he hopes to have the new rules finalized by the end of the year. Lepore also said that during outreach meetings with local government officials in July and August, defining a large UMA facility had been a tough task, and in Tuesday’s letter he indicated that discussion is still open.

“I probably have a different view, and industry trade associations probably have a different view, and we’re going to have to wind up with some kind of number, some kind of line that not everyone is going to be happy about,” Lepore said last month of the large facility definition. “But that’s somewhat the nature of making rules. Somebody winds up on the side of the line they didn’t want to be on.”

The Colorado Petroleum Council (CPC) will also be engaged in the ongoing evolution of the rules.

“While we are reviewing the proposals carefully to determine if they improve existing regulations, Colorado needs to take great care that we do not add more duplicative and costly regulations that could smother investment in the state,” CPC Executive Director Tracee Bentley said in a prepared statement.

The Colorado Supreme Court has agreed to hear industry lawsuits against Colorado cities where voters approved hydraulic fracturing bans or moratoriums, and community outrage over drilling proposals continues to crop up in places like Wadley Farms in unincorporated Adams County.

“Drilling in neighborhoods spurred the recent controversies about oil and gas development in Colorado. These draft rules fail to address this root problem,” said Grand Valley Citizens Alliance President Leslie Robinson, who also told The Statesman that Lepore seemed very open to meaningful solutions during the community outreach phase of the rulemaking.

“We saw this process as an opportunity to address the problem of big oil and gas facilities being sited close to homes and communities. Instead, the commission is proposing to basically enshrine companies’ right to keep doing exactly that,” Robinson added.

Asked last month if he thought the local-control rulemaking would appease citizen activists concerned about drilling in their neighborhoods and head off another potentially pitched battle at the ballot box, Lepore was philosophical about the entire task force process.

“This is a continuing journey. The governor’s task force was actually a really good process because everybody had a seat at the table. We had a neutral contingent of distinguished Coloradans,” Lepore said. “They obviously became the swing voters, and they heard from everybody and they heard all sides of this issue.

“At the end of the day they charted a course for us that maybe leaned a little bit more toward the status quo than some of the local governments would have liked, but at the same time it was clear that those clamoring for the greatest change probably don’t represent the majority opinion.”

In 2014, ballot initiatives to allow for both local government zoning control and greater setbacks for drilling facilities away from homes and public buildings were headed for the ballot, with groups gathering signatures and U.S. Rep. Jared Polis underwriting the effort. The questions were pulled when Hickenlooper signed an executive order forming the task force.

CREED has now stepped into the ballot-initiative fray. Swain declined to reveal potential funding sources for the group’s efforts in 2016.

“We’ll be evaluating more than one type of initiative, and there may be more than one initiative that is run,” said Swain, a north Denver resident who has been involved with other anti-fracking groups. “Currently the options that we’re looking at are being vetted, so we have to evaluate them. In late November, early December, we will have a release that will go into greater depth about the content of the initiatives that we are looking at.”

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David O. Williams

Managing Editor at RealVail
David O. Williams is an award-winning energy, environmental, political, entertainment, outdoor and sports writer based in the Vail Valley. His work has appeared in publications such as The New York Times, Chicago Tribune, Denver Post, LA Weekly, ESPN.com, SKI Magazine, Powder and People Magazine. He also regularly contributes to The Colorado Statesman and Atlantic Media's RouteFifty.com.

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