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Colorado County Gives Driller Break on Fees Due to Low Prices

Rio Blanco County, CO, elected officials recently passed a measure to temporarily suspend impact fees on oil/natural gas development to encourage business expansion.

Rio Blanco County Commissioners passed a resolution May 11 temporarily suspending impact fees for all development permits in the county issued from the date of its action through Feb. 8. It is the commission's latest action to improve the county's sagging economy and business climate.

"Businesses, especially those associated with extraction of natural resources, are struggling and facing ever-increasing federal regulations," said commission Chairman Jeff Eskelson. "While the federal government is making business more challenging, Rio Blanco County is working hard to bring more business into northwestern Colorado."

WPX Energy's district manager in the region, Tyler Bittner, said the economics for developing energy projects are challenging, given the depressed commodity price environment, but he called the county's action "forward thinking.”

David Ludlum, executive director of the west slope branch of the Colorado Oil and Gas Association (COGA), said the savings for the industry are not huge (about $18,000/well), "but symbolically it is important from a local government," Ludlum said. He said the commissioners came to the west slope COGA branch's operators group meeting to make the announcement last Wednesday.

"Right now there is very limited drilling in our basin given the dry gas price environment," Ludlum told NGI on Monday. "The county is suspending well fees while most of the world is bearing down on oil and gas."

Impact fees have been collected by Rio Blanco since 2008 to support increased county administrative, law enforcement and transportation department costs that came with a spike of energy development six or seven years ago. They were to help fill the gap between services needed and the taxes collected from the increased development, the county commissioners said.

Conversely, the current decreased economic activity means lower associated costs for the county, according to Commissioner Shawn Bolton. "To encourage responsible business growth and development, now is a perfect time to temporarily do away with impact fees and hopefully spark some business interest," Bolton said.

During the suspension, the commissioners plan to review the existing impact fee schedule and determining the appropriate action in the future.

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