The Colorado Way on gas development
Like other states, Colorado is experiencing a downturn in drilling activity, a downturn whose impact on many has been severe.
However, Colorado’s rich reserves of natural gas aren’t going anywhere. Drilling will begin to rebound as oil and gas prices rise. Based on our discussions with operators, this may begin to occur in parts of Colorado within the year.
Yet critics of Gov. Bill Ritter continue to talk as if the industry was on its last legs. Last week, The Daily Sentinel ran a story in which critics called on Gov. Ritter to copy Pennsylvania’s approach, by, among other things, rolling back the new rules that were unanimously adopted by the Colorado Oil and Gas Conservation Commission last year after an exhaustive public process.
A little perspective is in order. Our new rules strike a responsible balance between energy development and protection of the clean air, clean water and abundant wildlife that gives Coloradans a quality of life that is, no offense to Pennsylvanians, second to none.
Moreover, our rules are now in place. Companies understand what is required and are already meeting these requirements.
By contrast, Eastern states are still in the process of updating and revising their regulations. Several are taking approaches that may not translate well to Colorado. Recently, Pennsylvania increased the fee it charges to accept an application to drill a well in the Marcellus Shale from $100 to between $1,000 and $3,000. Colorado does not charge for permits. In New York, one major company has said it will not drill in a watershed area because of citizen objections about risks to water quality.
This suggests that others are now recognizing two things Gov. Ritter has long emphasized. The first is that we all share a common objective in creating a healthy business environment where industry can continue to grow, while at the same time acting as good environmental stewards. The second is that we can have both a healthy economy and a healthy environment. It’s the Colorado way.
As proof, I can report that under the new rules, the state is working with many of Colorado’s most respected operators on landscape-level development plans that will cover thousands of new wells. With these plans in place, operators will enjoy a streamlined permitting process and increased regulatory certainty while we ensure that appropriate protections are in place across half a million acres of the Western Slope, including hundreds of thousands of acres of highly productive wildlife habitat.
The oil and gas commission is also doing a number of things to assist operators with the new rules. We grandfathered existing permits and thereby provided industry with thousands of drilling opportunities during the current year. We’ve increased staff, reduced the backlog of permits in process and are working to shorten our permitting times. And we have proposed extending the duration of new drilling permits to assist operators in planning their drilling programs.
Modernizing oil and gas rules will help us better protect the things that make Colorado what it is today. Colorado has been the proving ground for new technologies and new approaches that have been so successful that companies have exported them to other gas plays. Many of the new rules simply codify practices that individual operators already apply.
Time and time again, here in Colorado and elsewhere, industry has demonstrated that it can meet society’s changing expectations in a way that both allows companies to grow their businesses and results in the adoption of new technologies and efficiencies which benefit both their bottom lines and society at large.
We all share a common interest in developing our abundant energy resources and in protecting the clear air, clean water, abundant wildlife and quality of life that make Colorado one of the best places to live and work — anywhere.