Legislators want drill permits changed

State Sen. Josh Penry and a fellow Republican lawmaker are getting behind an industry request that Colorado make oil and gas drilling permits good for two years rather than one.

The Grand Junction Republican and state Rep. Cory Gardner of Yuma called for the change Tuesday in a letter to David Neslin, director of the Colorado Oil and Gas Conservation Commission.

They wrote that the change would “help create some level of long term certainty for companies wanting to invest in Colorado’s clean energy economy” during a drilling slowdown worsened by “onerous” new state oil and gas rules.

The two said if the oil and gas commission decides against the change, they plan to address the matter legislatively next year.

In an interview Thursday, Neslin reiterated recent comments he made that the concept merits consideration. He said the commission will take up the matter.
Bureau of Land Management oil and gas permits already are valid for two years.

Neslin said the industry contends that having permits last longer provides ease in planning as companies increasingly try to drill 20 wells or more from a single pad, and as they must meet expanded requirements under the new rules.

“This could assist operators in scheduling their work and complying with other regulatory requirements,” Neslin said.

Penry and Gardner are asking that companies be given the option of extending permits for an additional year beyond two years. The BLM allows companies to request up to a two-year extension of their permits.

BLM spokesman David Boyd said the agency expanded the shelf life of its permits from one year to two in 2007. It was part of a major rewrite of its onshore oil and gas regulations.

“The two-year deadline fits better with what was happening in 2007 with the new (directional drilling) technology. It may take longer than a year to drill a well pad out,” he said.

The BLM encourages directional drilling to reduce surface impacts.

Michael Freeman, an environmental attorney with Earthjustice, said it’s important that any expansion of a permit’s length not be applied retroactively to permits companies sought before April 1, when the new oil and gas rules took effect.

The old rules continue to apply to those permits. Making the permits effectively valid for up to three years rather than one would mean weaker wildlife and water protections associated with them would remain in place that much longer, Freeman said.


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