Commission asks BLM to fast-track Fram's Whitewater project proposal

A well pad with a producing oil well, and a rig to drill another well, are seen at a well site on Purdy Mesa road.

Up until now, state oil and gas regulators have mostly been nibbling around the edges when it comes to changing their rules in response to this year's passage of Senate Bill 181, which overhauled how the industry is to be overseen in the state.

That appears to be about to change, as the Colorado Oil and Gas Conservation Commission begins to take up a core mandate of the law — changing the mission of the agency.

In a recently released document by agency staff, they detail a host of rules revisions they are considering to comply with that mission. Changes could affect everything from who is entitled to protest oil and gas applications, to well flaring, spill reporting, and permitting of wells and drilling locations.

"It's very broad-reaching," Eric Carlson, executive director of the West Slope Oil and Gas Association industry group, said of what COGCC staff are calling the "Mission Change Whitepaper."

"It covers a lot of ground and would be a significant change in the direction and emphasis that the commission has had historically," Carlson said.

Carlson said there is a lot in the document that concerns him. But he notes that it's not a formal rule proposal, but rather presents an "overarching concept," and the agency will be able to get initial feedback this morning during a meeting with stakeholders.

"I would expect that there will be reactions from all sectors," he said.

"We will be heavily involved with that process" of changing the rules based on the mission change, said Leslie Robinson with the Grand Valley Citizens Alliance, which has been heavily involved over the years with drilling issues in Garfield County.

The COGCC says in its document, "This whitepaper is not the final word on the Mission Change rulemaking. While it was developed solely by staff, stakeholder input is critical to the next stage of staff's rule language development. Staff expects this whitepaper to facilitate meaningful stakeholder conversations and rule language development."

The agency says the paper covers "large concept ideas," but includes only some of the rules changes it is considering related to its mission change.

"The topics staff expects to discuss with stakeholders include 1) potential limitations to implementing some of the large concept ideas in this whitepaper and 2) additional large conceptual reforms that should be considered," the document says.

While Senate Bill 181 is a wide-ranging measure, its central component removed fostering oil and gas development from the COGCC's mission, and instead required it to regulate the industry in a way that protects and minimizes impacts to public health, safety, welfare, the environment and wildlife.

The COGCC is expected to undertake about a dozen rulemakings altogether to implement SB 181. It started in July with some fairly straightforward procedural changes, including one tightening the circumstances in which entities can "force pool" nonconsenting mineral interests in leases.

The agency also had begun the process of further tightening its rules applying to flowlines running from oil and gas wells, and has proposed making flowline map information available to the public. It is scheduled to hold a hearing on flowline rules later this month.

One notable possible regulatory change the COGCC is considering to comply with its new mission would allow any "affected person," including individuals, organizations or local governments, to have standing to protest applications by companies. The paper notes that relatively few persons can do that now. It says the oil and gas commission may consider things such as a person's distance from a proposed activity, and the likely impact on a person's health, safety, welfare or use of property, in determining if they are "affected" and have standing to protest.

Robinson said the issue of standing is "near and dear" to her citizens group. The state Supreme Court ruled against the group in one case involving standing, and Robinson said the issue has arisen in other cases such as in the question of who has had standing to speak for Battlement Mesa residents in the case of drilling applications there.

Among numerous other possible changes envisioned in the mission-change whitepaper:

■ requirements for reporting of spills could be further tightened, to include among other things any time spilled fluid "daylights" to the surface or impacts at least a cubic yard of earth, impacts ground or surface water, or leaves an oil and gas location.

■ gas reaching the surface during well drilling, completions, initial production and other activities might have to be captured at least to some degree, and companies might generally be prohibited from flaring or venting gas for more than 60 days after well production starts.

■ companies would have to develop dust-control plans.

■ construction and lining requirements for fluid-containing pits would be strengthened and new unlined pits would no longer be allowed.

■ permitting, now done in separate stages applying to downhole well spacing, surface locations and well-drilling, would instead be combined into a single application that would give the COGCC a more comprehensive understanding of a company's proposed development plan for an area. The process also would recognize that in some cases COGCC staff could recommend that a plan be denied under the agency's new mission.

Carlson said his group will be looking to ensure that proposals comply with the new law's requirement that rules be "reasonable and necessary" to comply with the agency's mission. He said he hopes the result is a regulatory "framework we can live within."

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