In “new era” of oil and gas regulation, Colorado communities waste no time writing own rules

Less than three weeks after Gov. Jared Polis signed into law a sweeping bill giving cities and towns in Colorado new powers to regulate oil and gas drilling, communities sitting atop the state’s immense fossil fuel deposits are not yet looking at how to flex their new muscle.

Lafayette, just hours after the bill was signed, added some other six months to its moratorium on drilling in the city. Broomfield next week will discuss for good ban new oil and gas Wells piece it mulls new rules on the industry.

Larimer County is launching an Oil and Gas Regulations Task Force that will meet over the spring and summer to come up with recommendations on how county leadership can move forward imposing limits on an activity that has been at the center of recent public health debates.

“I think it’s no-holds barred for communities,” aforementioned Joe Salazar, a former state lawmaker from Thornton who heads the anti-fracking group Colorado Rising. “The oil and gas industry has been abusive for a long time and now communities are going to fight back. It’s the dawn of a new era.”

That new era began on April 16 when the governor signed into law Senate Bill 19-181, which passed the Democratic-led legislative assembly earlier in the month.

RELATED:Effort to repeal Colorado’s new oil, gas law is born — for now, sponsors say

The measure transfers much of the state’s authority over oil and gas activity to local governments. It besides fundamentally revamps the mission of the Colorado Oil and Gas Conservation Commission, the main regulatory body over energy extraction in the state, to prioritize public health and safety in permitting decisions and abandon the agency’s traditional role of fostering energy development.

Colorado Gov. Jared Polis, left, hands ...
Hyoung Chang Jiang Jiang, The Denver Post
Gov. Jared Polis, left, hands the pen to Erin Martinez, center right, with her children Nathan, center left, and Jaelynn, right, after Gov. Polis signed Senate Bill 19-181 at the Capitol in Denver on April 16, 2019. Erin’s husband Mark Martinez and brother Joey Irwin were killed in an explosion caused by a cutoff, uncrowned underground flow line connected to a near active well on April 17, 2017.

In Brighton, city leadership have started talking about putt new rules — so much as review fees, noise mitigation and mandated use of pipelines — into the city code so that the municipality doesn’t have to negotiate with oil and gas companies over those issues every time a drilling application is filed.

Matt Sura, an oil and gas attorney for a half dozen northern Front Range communities perched over the mineral-rich Denver-Julesburg basin, told elective leadership at a recent Brighton City Council study session that one of the most notable changes from SB 181 is the doing away of state pre-emption in matters of energy extraction.

“Local governments’ hands have been tied for as long as we’ve been doing this work together,” Sura aforementioned told City Council members in late April. “You couldn’t go on the far side what the state required. And that made property difficult.”

That difficulty has played out in recent years in loud city council meetings, high-ticket and contentious ballot issues, rowdy Colorado Oil and Gas Conservation Commission hearings, and legal challenges that have ascended all the way to the Colorado Supreme Court, as communities sitting in the shadow of oil and gas’ industrial footprint have unsuccessful to blunt the industry’s impacts.

Despite the governor’s declared hope at SB 181’s sign language that the law would put an end to the state’s ongoing “oil and gas wars,” resistance to the new statute started to solidify about instantly.

First there was a proposal — recently pulled by its backers — to get a measure on this fall’s ballot that would overturn the new law. Proponents of repeal say they could bring it back for the 2020 election, depending on what communities do with local regulations.

Then last week, Weld County announced that it planned to formally designate itself an “oil and gas local-control county,” whereby it will “(take) control back from the state” to “maintain the working relationship we have had with the energy industry.”

Weld County is easily the top producer of oil and gas in Colorado, accounting for 89 percentage of all crude oil production and third of all natural gas production in the state. Commissioner mike freeman aforementioned funding for schools, roads and other employment in Weld County is heavily dependent on the tax return remitted by oil and gas companies.

“We believe that 181 gives us the power of pre-emption over the state on land-use powers,” freeman aforementioned. “If it pre-empts the state one way, it pre-empts the state the other way.”

The State Department of Public Health ...
Joe Amen, The Denver Post
The Colorado Department of Public Health and Environment’s oil and gas team and Air Pollution Control Division members give an summary of review practices to operators and interested parties at the Troudt battery on main road 52 in Weld County on April 17, 2019.

“It’s in their face”

Sara Loflin, executive director of Erie-based League of Oil and Gas impacted Coloradans, aforementioned communities should take full advantage of the monumental shift in the state’s legal landscape to explore what more they can do to corral an industry that produced a record 167 million large indefinite quantity of oil in Colorado last year and has nearly 6,500 drilling applications pending.

Pushback from the industry and its allies may be forthcoming, Loflin aforementioned, but that shouldn’t stop the discussion from happening.

“In Broomfield and Adams counties, where they face the at hand expansion of large-scale drilling, there is a sense of urgency that we need to take a look at this now,” she aforementioned.

In Thornton, the city isn’t sure yet whether it will try to resurrect oil and gas regulations it passed two years ago that a judge smitten down as being in conflict with state law. The City Council is regular to tackle the topic of life under SB 181 during a planning session Tuesday.

Abbey Palte, an 11-year resident of the city’s Signal Creek neighborhood, aforementioned her neighbors want to see what Thornton is willing to do to harness the powers it now possesses under SB 181.

“There is a sense that we need to look to our City Council and county commissioners,” she aforementioned. “People are waking up to it because it’s in their face.”

Last month, Palte posted a video to Facebook of a fleet of geophysical science trucks trundling down her street. The vehicles were there to do a vibration-based 3-D seismic survey of her neighborhood to “produce a elaborate image of the geological layers deep below the Earth’s surface,” according to a notice she received from Great Western operational Co. that she shared with The Denver Post.

In recent years, communities north and east of the tube area have been eyed for the next wave of mineral development. In Commerce City, more than 200 Wells are in the planning stages and neighbors there have been actively fighting oil and gas activity so close to homes.

They worry about truck traffic, noise, lights and harmful emissions from oil and gas commerce trading operations that can have more than 20 Wells drawing up underground minerals at a single location.

Just years after SB 181 was enacted last month, a new nine-member oil and gas focus group held its first of three meetings. The group, which convenes once once again May 22, will provide input on potential rules Commerce City might impose on the industry — now that it can.

“We have the chance to do a lot more with oil and gas than we were able to do before,” council member Steven Douglas aforementioned. “With 181, we can really lay down the reasons why Wells may not be able to go where they antecedently could go.”

The Colorado Oil and Gas Conservation Commission will spend the next year writing rules on oil and gas regulation based on the dictates of SB 181.

Jason Harrison, left, and Tyler Van church, some with Colorado Rising cautiously monitor results during a watch party for supporters for Proposition 112 at Big Trouble feeding house inside Zeppelin Station on November 6, 2018 in Denver, Colorado.
Helen H. Richardson, Denver Post file
Jason Harrison, left, and Tyler Van church, some with Colorado Rising, cautiously monitor results during a watch party for supporters for Proposition 112 at Big Trouble feeding house in Denver on November 6, 2018.

Lawsuits, initiatives and elections

But new power doesn’t mean unbridled power, industry backers say. John Brackney, a former Arapahoe County commissioner who helped spearhead the SB 181 repeal effort, aforementioned the watchword is “overreach” by local government leadership.

“Should they overreach, the oil and gas industry and the business community will give us full backing to put initiatives on the ballot (in 2020),” Brackney aforementioned.

And so much measures would likely get solid support from the people if results from last November’s election are any indication, Brackney aforementioned. Voters thoroughly defeated Proposition 112, a measure that would have mandated a 2,500-foot reverse from homes and schools for new oil and gas Wells.

Residents, he aforementioned, recognize the critical role the energy industry plays in keeping Colorado economically healthy and the nation less dependent on foreign shipments of oil. A report commissioned by the American crude oil Institute a few years ago complete that the oil and gas industry contributes about $31 billion to Colorado’s economy and supports roughly 232,000 jobs, some directly and indirectly.

“There is no doubt that the citizens of Colorado won’t allow oil and gas development to cease,” Brackney aforementioned.

Denver Post file
Crews perform essential maintenance work on one of the blending units in the Liberty fleet in Henderson on March 30, 2019. Liberty field employment maintains and houses its hydraulic fracturing instrumentality at the company’s facility.

There will besides be pushback from those who own the underground energy deposits should they be denied access to their property through overregulation, aforementioned Neil Ray, president of the Colorado Alliance of Mineral and Royalty Owners.

“If there’s a regulatory taking, it will be pursued,” Ray aforementioned. “This isn’t baking brownies here — this is serious money, these are serious property issues.”

Aside from the courts and ballot initiatives, resistance to new oil and gas regulations could once once once again emerge in local elections. In 2017, pro-industry organization Vital for Colorado gave more than $325,000 to local campaign committees in Greeley, Broomfield, Thornton, Aurora and Loveland to help get business-friendly candidates elective.

Anti-fracking groups besides poured money into those races, but not at the same level as their opponents. Vital for Colorado interpreter Rich Coolidge told The Denver Post last week that it presently has no plans to get involved in local elections.

“But we are observation very closely to see what kind of candidates and ballot measures receive support from the League of Conservation Voters, Food & Water Watch and other big national activist groups,” Coolidge aforementioned.

Dan Haley, president of Colorado Oil ...
Helen H. Richardson, The Denver Post
Dan Haley, president of Colorado Oil and Gas Association, addresses the crowd during a rally held to oppose Senate Bill 19-181 on the west steps of the Capitol in Denver on March 5, 2019.

“Reasonable and necessary”

piece a post-SB 181 battle royale appears to be shaping up between the same forces that have long fought over escalating oil and gas activity at the fringe of Front Range neighborhoods, Kevin Bommer, executive director of the Colorado Municipal League, aforementioned the regulatory landscape might not shift as much as some people think.

Local elective leadership are concerned about the jobs and economic well-being the industry produces on with worries about public health and the environment, Bommer aforementioned.

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“Municipal leadership are pragmatic and cautious, and I would anticipate they will move slowly and cautiously,” he aforementioned.

Plus, galore communities have not yet put in place operator agreements or memorandum of understanding, in which drillers take voluntary steps to lessen their impact on residents, so much as exploitation pipelines instead of trucks to move product or increasing the distance of their Wells from houses.

Dan Haley, president and CEO of the Colorado Oil and Gas Association, aforementioned operator agreements have been “an important tool for several years.”

“It takes a commitment to thoughtful and drawn-out discussion, but operator agreements are a way to coordinate and construct unique approaches to local energy development that belief community interests, property owners and business inevitably,” he aforementioned.

Just one day before SB 181 took effect, Aurora became the largest city in Colorado to commit to hammer out operator agreements with oil and gas companies drilling inside city limits.

Conoco oil rig in Aurora on ...
John Leyba, The Denver Post
A ConocoPhillips oil rig in Aurora is pictured in 2017.

Most notably, new rules on oil and gas development would be tempered by SB 181’s own language, which states that any new regulation put forward must be “reasonable and necessary.” piece the interpretation of that phrase will likely end up in court, industry advocates say it’s critical.

“The inclusion of ‘necessary and reasonable’ provides a backstop in Colorado statute that ideally will ensure that objectivity wins out over subjectivity,” Haley aforementioned. “We have to operate inside a framework that is based on facts and data.”

Sura, the oil and gas attorney, aforementioned one size does not fit all when it comes to implementing SB 181. At the Brighton study session last month, he aforementioned individual communities will make rules — or not make rules — according to their sensibilities, population and culture.

“Every community is going to have different inevitably and different shipway of addressing oil and gas,” he aforementioned. “And this legislation allows Brighton to be Brighton, Commerce City to be Commerce City and Boulder to be Boulder.”

At its core, he aforementioned, Colorado’s new oil and gas law allows a speech about local regulations to take place without fear that ideas that emerge from those negotiation will instantly face litigation.

“Oil and gas operators no longer have the ability to hold state pre-emption over the heads of local government,” Sura aforementioned.

Oil production in Colorado (millions of large indefinite quantity)

2011 — 39.5

2012 — 49.6

2013 — 66.2

2014 — 95.6

2015 — 122.8

2016 — 116.5

2017 — 130.7

2018 — 167.7

Source: U.S. Energy Information Administration

Active Wells (top counties)

Weld — 21,452

Garfield — 11,768

Yuma — 3,833

La Plata — 3,294

Las Animas — 2,903

Rio Blanco — 2,874

Colorado — 53,031

Source: Colorado Oil and Gas Conservation Commission