Oil and gas panel gives initial OK to new rules
September 12, 2008
DENVER ” Colorado regulators wrestled Thursday with how to fulfill a legislative mandate giving the public more input into how the state’s energy boom is managed.
The Colorado Oil and Gas Conservation Commission has given preliminary approval over the last two months to rules that would give more consideration to public health and safety as well as environmental and wildlife concerns when approving energy development.
The panel, appointed by the governor, will meet Sept. 22-23 to discuss proposed regulations to protect wildlife and manage waste pits. Members are expected to vote soon after that on final regulations, which the Legislature eventually will review.
The move to update the state’s oil and gas regulations comes as Colorado is seeing record drilling rates. The state issued 6,368 permits last year and is on pace to exceed that this year. In 2000, the total was 1,366.
“The industry has never been busier” in Colorado, said Dave Neslin, acting director of the oil and gas commission.
Industry representatives have warned that the proposed regulations could make it tougher for companies to get permits or drill in certain places. They say that could dampen interest in Colorado, resulting in fewer jobs and tax revenue for state and local governments.
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For now, though, the demand for new drilling permits, mostly for natural gas, is still increasing. Neslin said the number of permits issued is up 20 percent from the spring. An average 763 permits were approved each month from June through August.
“We issued over 800 permits in June,” Neslin said. “Ten years ago, we were issuing 1,000 permits in a year.”
Proposals winning preliminary approval include requiring input from state wildlife and health experts in certain cases and requiring that landowners within 500 feet of proposed oil and gas facilities be notified.
Another measure would prohibit development within 300 feet of rivers and lakes with native cutthroat trout or gold-medal fisheries, considered premier waters. Environmentalists and anglers want to see more lakes and streams protected.
Western Colorado communities prefer the original proposal of a 500-foot buffer around public water supplies to the new recommendation of a 300-foot zone.
Industry representatives balked at a proposal requiring that landowners and local government officials be given a chance to participate in development of comprehensive drilling plans. Companies would have the option of submitting a plan for several wells over a large area rather than seeking approval for individual wells, as they do now.
The oil and gas commission has postponed decisions on a few topics to hear from task forces. One of the issues is how far wells and other oil and gas equipment should be from homes. The current setback is 150 feet for rural homes and 350 feet for high-density housing and such recreation areas as hiking trails.
A homebuilders’ group supports sticking to the existing standard, but some homeowners and environmental groups have suggested setbacks of 400 to 1,000 feet.
Environmentalists and wildlife advocates have raised concerns about a recommendation from the commission’s staff to drop drilling restrictions to protect wildlife in winter and mating and birthing seasons. Drilling would have been limited in key wildlife habitat in western Colorado for up to 90 days annually if companies didn’t agree to measures minimizing impacts on mule deer, elk, sage grouse and other animals.
Industry trade groups denounced the seasonal restrictions, calling them a 90-day drilling moratorium. Staffers said they were a fallback, but are proposing they be dropped in favor of consultations with the state Division of Wildlife.
Neslin said the changes made to the proposals after discussions during the summer with the industry and other groups have resulted in “a workable compromise.”
Meetings called by Gov. Bill Ritter followed a series of ads by the Colorado Oil and Gas Association and the Colorado Petroleum Association, both trade groups, saying the new rules threaten Colorado’s economy. Jim Carpenter, Ritter’s chief of staff, Neslin and others participated in the sessions.
Evan Dreyer, Ritter’s spokesman, said the governor was trying to cool “the rhetoric and heat” of the debate over the rules.
“We’ve incorporated significant input from industry,” Neslin said. “At the same time, we’ve proposed rules that are effective and do provide protections for public health and wildlife.”