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Colorado Oil/Gas Groups Urge Regulators to Follow Local Control Recommendations

Representatives from the oil and natural gas industry on Tuesday urged the Colorado Oil/Gas Conservation Commission (COGCC) not to go beyond the recommendations of a statewide governor's task force on ways COGCC can implement a measure of greater local control over industry activities in cities and counties.

Current draft rules to implement two task force recommendations (No. 17 and No. 20) go too far regarding regulating large drilling projects and requiring operators to share advanced, long-term drilling plans with local officials, according to Dan Haley, CEO of the Colorado Oil and Gas Association (COGA), who testified at the second day of COGCC hearings on the draft rules in Denver.

COGCC opened two days of hearings Monday with a continuation into next month if necessary to hammer out new rules implementing two of nine recommendations made early this year by Gov. John Hickenlooper's statewide local control task force (see Shale DailyNov. 13). COGA, which is on record as supporting all nine task force recommendations, is concerned that the draft rules for implementing them are going beyond the intent of the 21-member task force.

Earlier this year, Hickenlooper accepted the task force recommendations, most of which require action by the COGCC (see Shale DailyFeb. 25).

On the table are Recommendations No. 17 and No. 20, which deal with:

  • COGCC setting rules to address local government collaboration with operators on large-scale facilities in urban mitigation areas; and
  • Operators' plans for future drilling and production facilities being included in existing local comprehensive planning processes.

These recommendations would bring "a big change" in the way oil/gas operating locations are permitted in the state, Haley told the COGCC members. No. 17 would create several firsts for the industry, he said, such as: a new state process and standard for reviewing whether operators "have worked in good faith to achieve agreement with local government"; a negotiations record that the state can use to determine specific site mitigations; and "established expectations" for when and with what conditions state permits will be considered.

In No. 20, the state for the first time would identify parameters for the industry's sharing of longer-term planning information with local governments, Haley said.

"COGA supports this rulemaking, however, [we maintain] that the COGCC proposed rules must be modified to uphold the intent, meaning and integrity of the task force recommendations," Haley said. "If the two recommendations were written the same as the draft rules before [the COGCC], the industry representatives and maybe even a few non-industry members would not have voted in favor of the recommendations, and as such they would not have passed out of the task force."

Specifically regarding No. 17, COGA is against including a use of "best available technology" and time limits on drilling, completion and stimulations processes for operators. And on No. 20, the draft rules expand the scope of discussions with local governments to include boundaries planned and growth management areas for operators even though some growth management areas might not be within the jurisdiction of a given municipality. It also attempts to impose public reporting requirements on privately held companies, COGA said.

Noting that the testimony from other stakeholders was a "mixed bag," a COGA spokesperson on Tuesday said the oil/gas industry was united behind the recommendation that the COGCC stick to the task force members' intent embodied in the recommendations.

Outside of the hearings, the Colorado Petroleum Council (CPC) has reiterated an economic study it completed last year showing that oil/gas operations in the state account for more than 200,000 jobs, and the task force rules implementation should be judged based "their impact on investment, development and job creation."

CPC Executive Director Tracee Bentley said the industry supports a "common sense regulatory approach" that promotes safe, reliable oil/gas production that benefits Colorado consumers. "Colorado needs to take great care that we do not add more duplicative and costly regulations that could smother investment in the state."

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