Backers defend new regs for Colorado oil, gas industry |

Backers defend new regs for Colorado oil, gas industry

Judith Kohler
The Associated Press
Aspen, CO Colorado

DENVER ” Wildlife advocates and environmentalists defended proposed new regulations for oil and gas development in Colorado Tuesday, saying the industry was exaggerating about how much they would cost companies.

“Let’s make no mistake about it, this is a highly profitable industry,” said Lance Astrella, an attorney representing environmental and land owner groups.

His comments came on the second day of public hearings on the contentious proposals, which were drafted amid Colorado’s struggle to blunt some of the impact from a natural gas boom.

Proponents say updated oil and gas regulations are long overdue considering the drilling rates. The state issued a record 6,368 drilling permits last year ” six times the 1999 total.

State officials say at least 7,000 permits could be approved this year.

“With the proliferation of drilling that’s going on now and that’s going to continue into the future, there’s going to be a cost of doing it right,” Astrella said.

Without regulations balancing environmental and health concerns with energy development, Astrella said, those costs will be borne by landowners whose property values drop, water users whose water is polluted or dries up and taxpayers who have to finance cleaning up contamination.

Opponents of the rules say they go too far, too fast and could prompt some companies to leave the state.

Industry representatives urged regulators to ask “piercing questions” about the need for the new rules and rely on facts rather than perceptions when considering them.

The Colorado Oil and Gas Conservation Commission, the main regulatory body, is expected to vote on the new rules in mid-August after a series of hearings and public meetings.

The rules were written in response to state laws approved last year that give more weight to health, wildlife and environmental concerns in oil and gas regulations. Decisions about development are to be made with input from state health and wildlife experts.

Companies would have until 2010 to comply with rules on minimizing the impacts on certain wildlife and habitat if they consult with state wildlife officials, submit comprehensive development plans or reduce the number of wells. The original compliance date was Nov. 1 in draft rules released March 31.

Companies that don’t negotiate with wildlife officials or submit development plans face restrictions of up to 90 days on when they can drill to protect wildlife during mating and birthing seasons.

“The proposed rules released March 31 will result in some fairly significant cost increases for industry,” industry consultant Doug Dennison said.

Having to confer with the state Division of Wildlife could cost an additional $150,00 to $200,000 per project and there’s no guarantee an agreement will be reached, Dennison said.

Other industry officials said some of the proposed rules could delay approval of drilling permits, resulting in lower profits for companies, less tax revenue for state and local governments and higher costs for consumers.

Commission members questioned some of the industry’s assumptions in their economic reports, including one saying that the new regulations could reduce oil and gas production by up to 30 percent