New rules for Colorado oil, gas industry move forward despite critics |

New rules for Colorado oil, gas industry move forward despite critics

Phillip YatesGlenwood Springs correspondentAspen, CO Colorado

GLENWOOD SPRINGS The energy industry has criticized the process. Some state legislators think it has gone too far.But Harris Sherman, executive director of the Colorado Department of Natural Resources, said the Colorado Oil and Gas Conservation Commission (COGCC) has fashioned one of the most transparent processes for the creation of new rules for the states oil and gas industry.I think there is a certain bit of misinformation out there about (this), Sherman said.Sherman and Dave Neslin, acting director of the COGCC, spoke to the Glenwood Springs Post Independent about the ongoing rule-making process on Friday.

The COGCC issued its initial pre-draft proposal of possible oil and gas rules in late November. That proposal came as a result of House bills 1298 and 1341, which the state legislature passed last year. Those two bills expanded the focus of the COGCC to consider public health and wildlife impacts and require use of best management practices to minimize harm from oil and gas development.Some lawmakers say the proposed rules go beyond the legislations intent. The energy industry has criticized the rules, saying they could create permitting delays of several months and cause uncertainty to their business operations in the state.Sherman said that is not the COGGCs intent.I think it is incumbent on the state to be balanced in its approach to these issues, Sherman said. We absolutely have the responsibility in protecting the states environment, its wildlife. We need to protect the health of (our citizens). That is essential, but I believe we can do that in a way thats balanced and does not impose undue burdens on industry.Controversy over the rulesOne of the immediate complaints from industry representatives is what they say is a one-size-fits-all approach for the proposed rules.I think that is a misunderstanding because that has not been our intent, Neslin said. I dont think, if fairly read, that is what our proposal suggests.To back up that point, Neslin said the Colorado Division of Wildlife and Colorado Department of Public Health and Environment would have different consultations with energy companies that operate in varying regions of the state.As an example, Neslin said the DOW would have limited review in Northeast Colorado as compared to Northwest Colorado. Thats because of this areas big game and sage grouse populations, he said.Our proposal, truly I think, if fairly read, is not a one-size-fits-all approach, Neslin said. But we are continuing to look at that issue and think through whether we should be differentiating our treatment of different areas even more.Whether the COGCC intended it or not, the agency came up with a one-size-fits-all plan, said Doug Hock, a spokesman for EnCana Oil & Gas (USA), a company with significant drilling operations in Garfield County.It seems to be a process of trying to create one set of rules for the entire state, when you have five very distinct (drilling) basins, Hock said.What has been industrys involvement?Neslin said that he was a little disappointed that debate over the rules became as polarizing as it did and as quickly as it did.Much of that teeth-gnashing centered around whether the COGCC reached out to industry as it began putting together the draft rules.We provided a number of mechanisms for them to engage in discussions with us, Neslin said.But the industry has said that is exactly opposite of what happened.Despite claims to the contrary, we absolutely did not have the opportunity to engage in the pre-draft discussions, said Meg Collins, president of the Colorado Oil and Gas Association. As a result, the pre-draft rules appear to be a solution in search of a problem and ignore years of thoughtful rule-making and existing regulations that are based on sound science and fact.Collins said the industry is thankful that it is finally able to lend our technical and geological expertise to the rule-making process during the current stakeholder work group meetings, which have included groups from industry, environmental organizations and sportsmen groups.Neslin, however, said industry has already had more opportunity for input in the rule-making process than any other group.We have reached out to them, Neslin said. We have met with them individually. We have met with them collectively. I cant speak for them about what they were expecting or what more they think they are entitled to. At the end of the day, were charged with trying to do whats best for the public.It would be wholly improper for us to allow industry to write the rules. We are interested in their perspective, Neslin said. We want to make sure what we are doing is effective and efficient.Collins responded by saying that industry did not ask to write the rules, we simply asked for a transparent and collaborative process where experts from our industry can provide critically important technical and geological expertise.Sherman said the COGCC has taken extra steps to ensure that the rule-making process is transparent. In a typical rule-making process, an agency develops a draft set of regulations, and then goes to a public hearing and finalizes those regulations, Sherman said.The COGCC chose a different path, he added.Instead, we have set forth a very elaborate, transparent, inclusive process. We have reached out to get input from all the stakeholders, Sherman said. While the industry has been critical of the process, I think it is fair to say that there have been many of the other stakeholder groups who have been very supportive of the process.Despite the controversy over the rules, Sherman said residents and various groups need to let the rule-making process run its course. He feels that the COGCC staff will give the state a thoughtful set of draft regulations.The COGCC commission, at that point, assumes a responsibility of reviewing everything and fulfilling its charge, which is to make a final decision, Sherman

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