State panel puts tougher drilling rules on table

A state agency touted as a national leader in regulating the oil and gas industry on Wednesday began looking to toughen its rules even further, even as some residents and local governments contended its draft proposals don’t go far enough.

The Colorado Oil and Gas Conservation Commission held an all-day hearing in Denver to begin considering requiring groundwater testing before and after drilling, and stricter rules governing setbacks between well pads and homes, schools and other occupied buildings.

The new proposals arguably would represent the most sweeping update of rules governing the industry since the commission approved a landmark regulatory overhaul in 2008. They would have even greater implications than the commission’s decision a year ago to adopt what the state called the nation’s most far-reaching requirements for public disclosure of constituents used in hydraulic fracturing. The setback proposal would include required mitigation measures including limits on noise and operating hours, emissions control devices, traffic plans and other measures for operations within certain distances of buildings.

The new rulemaking comes as concern is growing about drilling across the state, particularly near homes in more urban areas, and as more communities are seeking to impose drilling rules of their own. With the backing of Gov. John Hickenlooper, the oil and gas commission recently sued the city of Longmont, contending its rules conflict with areas of state authority.

Last week, Longmont voters approved a ban on hydraulic fracturing. While it might be argued that that ban won’t withstand a challenge in court, that’s missing the larger point that such a ban probably could pass in most Front Range communities, said Elise Jones, who just stepped down as the executive director of the Colorado Environmental Coalition after being elected as a Boulder County commissioner.

“There’s a lot of concern out there and it’s very widespread,” she told the commission Wednesday.

“Citizens are going to continue to take these efforts into their own hands,” said Sam Schabacker, of the activist group Food & Water Watch.

That’s particularly the case if the best the commission can do is establish a minimum 350-foot setback rule, he said.

Energy companies currently can drill within 150 feet of homes in rural areas, and 350 feet in urban areas.

“There’s a consensus in many communities that (drilling) simply doesn’t belong that close to homes or schools,” said Mike Freeman, an attorney who helped lobby for revised oil and rules in 2008 and noted that setbacks were a big unresolved issue from that rewrite.

Mineral owners’ interests

The commission is considering a recommendation to allow drilling closer than 350 feet to homes only with the consent of surface owners and owners of occupied buildings within that distance. The mitigation measures would apply, and such measures also would apply as far as 1,200 feet away.

Numerous Front Range residents expressed concerns to the commission about the prospect of drilling near homes. But Harry Thompson, a leader of Citizens Supporting Property Rights in Routt County, argued in favor of the current setback rules. He said increased setbacks could make it unprofitable for companies to reach oil and gas deposits, resulting in a waste of resources and denying mineral rights owners access to their property.

Manny Gonzales of the South Metro Denver Chamber of Commerce said any proposed extension of setbacks ignores complex legal and technical challenges, and the interests of homebuilders, surface and mineral owners and others.

“Please take this into heavy consideration,” he told the commission.

He also fears that the proposed water quality testing requirements would add a significant layer of additional costs that could make drilling uneconomical for smaller energy companies.

Although public testimony Wednesday mostly centered on the setbacks issue, much of the day’s proceedings focused instead on the water testing requirements, which would appear to be the less controversial of the two matters. Commission director Matt Lepore said there have been few areas of significant concern or disagreement over the proposed requirements.

He also noted, “We receive more complaints from citizens related to groundwater quality than any other single subject.”

Those complaints, which average about two a week, frequently include requests to have sampling done, he said.

Colorado has the opportunity to be the first state to require baseline and follow-up testing of groundwater near drilling, he said.

Cost of data

The Colorado Oil & Gas Association has led a voluntary industry initiative to do such testing, and it already occurs in the case of companies now drilling about 93 percent of wells in the state, Lepore said.

COGA is now supporting a mandatory testing program, but its president and chief executive officer, Tisha Schuller, told the commission Wednesday that it wants to achieve a balance between the amount of data obtained and the cost-effectiveness of gathering it.

“This is a big regulatory impact you’re talking about here,” said Ken Wonstolen, an attorney for the industry.

The current COGA program applies only to well pads. The commission is considering also requiring testing in the case of sites holding facilities such as pits and tanks, and Wonstolen objected to that idea.

The commission is considering requiring one test from a well or spring within a half-mile of a site before drilling occurs, and two tests afterward.

The commission is scheduled to resume its rulemaking hearings on Dec. 10-11.

Some citizen groups have called for minimum setbacks of 1,000 feet or more. The oil and gas industry as well as agricultural, homebuilder, mineral rights and other interests say the current rule is fine and provides the flexibility needed to select the best drilling location.

Duke Cox of the Western Colorado Congress citizens group told the commission he supports a minimum 1,000-foot setback, noting how much the industry has been able to advance directional drilling over the years.

“They brag about the contortions they can put their wellbores through to reach the resource,” he said.

Thomas Thompson of Rifle told the commission that having nearby wells has caused him and visitors to his home headaches, sinus and respiratory problems and other ailments.

“I must respectfully submit that if you don’t live near these things, no matter what your educational background, you have no idea what you’re dealing with — none,” he told the commission.

Some of Monday’s discussion by representatives of counties, industry, environmental and other interests pertained to questions about how many tests and test locations should be required. Some local governments called for a more rigorous testing program than what’s proposed. Oil and gas commissioner Rich Alward of Grand Junction also said it makes more sense to drill specific monitoring wells to target testing where it makes scientific sense, rather than just testing domestic wells.

Meanwhile, Jeff Madison, until recently the planning director for Rio Blanco County, told the commission he thinks the state has good oil and gas well construction and other rules to prevent groundwater contamination. But he said he’s concerned about a lack of adequate enforcement — “that there’s just not enough boots on the ground to keep track of everything.”


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