The Colorado Oil & Gas Conservation Commission issued new rules aimed at enhancing local communities’ participation in locating and planning for future oil and gas operations. The rules require operators to notify local governments earlier when activity will be adjacent to communities, call for additional mitigation measures and best management practices there, and encourage sharing of more information between producers and residents.
Local government representatives who participated in the rules’ formulation applauded the outcome when COGCC issued the rules on Jan. 25. Oil and gas groups in the state were disappointed, but said they would continue to participate in discussions.
The rules specifically address Recommendations 17 and 20, which were among nine of several that two thirds of the Governor’s Oil & Gas Task Force approved on Feb. 24, 2015, according to Colorado’s Department of Environmental Resources (DER), of which COGCC is a part. In 2011 Gov. John W. Hickenlooper (D) formed the task force to strengthen state oversight.
DER noted that of the nine, two required action by the state’s general assembly, two called for actions by other agencies, and five required action by COGCC, which determined that only two required rulemakings. These came following 3½ days of testimony on the proposed rules dating to late 2015, three stakeholder meetings in October, and 11 statewide outreach meetings this past summer with 39 local governments and several citizen and industry groups, it said.
“The new rules provide meaningful opportunity for operators and local governments to negotiate siting issues early in the permitting process,” said Kirby Wynn, oil and gas liaison for Garfield County who represented a coalition of Western Slope local governments at the rulemaking.
Industry groups are critical
The Colorado Petroleum Council, which is part of the American Petroleum Institute, and Colorado Oil & Gas Association separately said on Jan. 25 that they were disappointed with COGCC’s final rules. “Despite industry’s significant and meaningful involvement, and submission of reasonable solutions to recognized problems with the draft rules, certain portions of the [final rules] remain problematic, unsupported by reasonable or technical basis, and unclear as to the intent and purpose,” COGA Pres. Dan Hailey said.
A significant portion of the final rules go far beyond the task force’s recommendations, maintained CPC Executive Director Traceee Bentley. “Attempting to regulate relationships via regulatory rulemakings is extremely difficult, as demonstrated by this process,” she said. “The oil and gas industry will continue dialogue with local governments and all stakeholders on proposals that support Colorado’s economic prosperity and benefits to consumers.”
COGA said it is concerned essentially with five main aspects of COGCC’s final rules:
• Their use of the term “oil and gas location” in its definition of a Large Urban Mitigation Area (LUMA) facility refers to gathering, treatment, and processing operations which neither Recommendation 17 nor the rulemaking were intended to cover.
• The rules’ provisions for existing surface use agreements (SUAs) did not include, as COGA requested, that all existing SUAs, which contemplate a specific location within a LUMA be grandfathered in. “This exception is critical to ensuring that the state cannot interfere with private contractual rights,” COGA said.
• The rules make a change in COGCC’s Proximate Local Governments/Growth Management Areas Rule requiring operators to register with counties, which COGA said are not part of the original rule. “Proximate Local Governments was specifically discussed and rejected during Task Force deliberations,” the association said.
• The rules propose 90 days (with local government agreement) and 150 days (with no agreement) for COGCC to hold hearings, which COGA considers unnecessary. It said that an alternative it and the Colorado Petroleum Association supported for a 75-day review of drilling permit applications following a completeness check would be sufficient.
• The commission adopted new language for a 45 day preapplication notice to proximate local governments while the preapplication notice to the local government with land-use authority remained at 30 days. COGA said while it and CPA were not allowed to voice opposition to this change, the groups are concerned about unintended consequences of putting proximate local government needs before the local government of jurisdiction.
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