Showdown set on Colorado oil, gas rules |

Showdown set on Colorado oil, gas rules

Judith Kohler
The Associated Press
Aspen, CO Colorado

DENVER ” With a weeklong series of hearings on new oil and gas regulations looming, backers of stronger rules are urging state officials not to back off their proposals while industry officials are warning of economic collapse.

Hundreds of people were expected at a hearing Monday at the Paramount Theater in downtown Denver. The session will launch a week of meetings on proposals to revamp how oil and gas development is managed in Colorado.

An earlier gathering in western Colorado, a hot spot of the state’s natural gas development, drew about 2,000.

Stoking the pre-hearing emotions were recommended changes to proposals first released by regulators in March. State officials say they’re clarifications based on comments from the public and oil and gas industry.

“I don’t view it as a watering down,” said Dave Neslin, acting director of the Colorado Oil and Gas Conservation Commission, the main regulatory body.

Neslin said laws approved last year that require more consideration for wildlife, the environment and public health when approving oil and gas production also require the state to foster development of the resources.

“It’s a balance,” Neslin said.

The balance has been in the industry’s favor and supporters of tougher rules say the state risks keeping it that way by backing off before the oil and gas commission votes on final regulations in August.

“The state seems to be caving into industry opposition on very reasonable, public health safeguards,” said Jeremy Nichols of Denver-based Rocky Mountain Clean Air Action.

Nichols opposes recommendations to exempt the San Juan Basin in southwest Colorado from rules targeting odors from oil and gas facilities.

While wildlife and environmental groups believe regulators are backpedaling, critics of the new rules accuse the state of continuing to streamroll an industry that generates thousands of jobs and billions of dollars.

“I think it’s important to note that the state has made the claim before they’ve made changes. It’s been more like rearranging the deck chairs on the Titanic,” said Meg Collins, president of the trade group Colorado Oil and Gas Association.

Collins dismissed suggestions that oil and gas companies wouldn’t be satisfied by any compromise.

Newspaper and radio ads by Collins’ group and the Colorado Petroleum Association have warned of “job-killing rules” proposed by state regulators and a “looming threat to Colorado’s economy.”

“The state needs to sit down with industry,” said Glenn Moltrer, a Las Animas County businessman and landowner. “The rest of the country is in a recession and the oil and gas industry is one of the reasons Colorado isn’t.”

Moltrer, whose construction business does some work for oil and gas companies, said he fears the fallout for his county if strict regulations dampen the industry’s interest in Colorado.

“It’s misleading to view this as a zero-sum game,” Neslin of the oil and gas commission said. “I don’t believe one side or another is winning or losing.”

But Dave Nickum of the Colorado chapter of Trout Unlimited said he’s worried about losing ground. He’s concerned about a suggested change from the draft rules to limit buffers around water bodies to just rivers and lakes with native cutthroat trout or gold-medal fisheries.

Nickum said nearly three pages of recommendations from state wildlife officials on protections for fish were pared in the draft rules to 300-foot buffers around oil and gas wells. He suggested reopening the issue if the number of areas protected are cut back.

“Major sections of the Colorado and Gunnison rivers wouldn’t be protected,” Nickum said. “The entire Yampa and Eagle (rivers) wouldn’t be covered.”

Another proposed change to the draft rules would reduce buffers around community water supplies from 500 feet to 300 feet. Tim Sarmo, town administrator of Palisade, said an energy company has already leased 10,000 acres in the community’s watershed.

“I don’t dispute the importance of natural gas, but I think all of us would recognize that water takes precedence,” Sarmo said. “We don’t understand industry’s objection to the 500-foot setback.”

Other suggested modifications include giving companies until 2010 to comply with rules on minimizing the impacts on certain wildlife and habitat if the companies consult with state wildlife officials or submit comprehensive development plans. The original compliance date was Nov. 1.

Companies that don’t negotiate with wildlife officials or come up with development plans face restrictions of up to 90 days on when they can drill during mating and birthing seasons in certain areas, mostly in western Colorado.

The industry has assailed the proposal as a moratorium that would require “all drilling west of (Interstate 25) shut down operations for three months out of the year.”

“That’s just a blatant mischaracterization because of all of those other tools available for operators to use,” said Suzanne O’Neill, executive director of the Colorado Wildlife Federation.

O’Neill questions what will happen to vulnerable wildlife if adoption of the safeguards is delayed. The state is seeing record gas drilling rates and O’Neill said companies might push through drilling permit applications before 2010.

Colorado’s wildlife, including some of the country’s largest deer and elk herds, generates millions of dollars for the state from hunting, fishing and recreation, O’Neill said.

“It’s a significant part of our economy, as well producing benefits that can’t be quantified on a balance sheet,” she added.