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Colorado Governor Set to Sign Controversial Drilling Package

Colorado Gov. Bill Ritter last week was set to sign into law landmark regulations that overhaul rules for the state's natural gas and oil drillers after the Colorado General Assembly officially approved the package on Wednesday.

Following the lead of the Democrat-controlled House earlier this month (see NGI, March 16), the Colorado Senate, also controlled by Democrats, approved the rules package in a straight-party vote and sent it to Ritter for his signature. But the approval did not come without howling protests by members of the state's Republican party.

In its last ditch attempt to stall their implementation, Senate GOP leadership appealed for moderation and asked members to consider the state's slumping economy before giving their final approval to the rules package.

"They harm the economy, they cost jobs," State Sen. Greg Brophy (R-Wray) said in floor debate last Tuesday morning.

Senate Republican leader Josh Penry offered a compromise amendment, which would have tripled penalties on drillers for environmental violations such as excessive noise and odor; it also would have streamlined the permitting process. Penry said Ritter, who strongly supported the rules changes, "could get 90% of what he wants, plus some things he didn't ask for." Without some changes, the rules "will make a bad situation worse" and "will kill jobs," said Penry.

Democrats voted unanimously against Penry's proposal and shot down all attempts to scuttle the controversial package.

State Sen. Jennifer Viega (D-Denver), one of the bill's sponsors, said the Senate's authority for the rules authorization was mostly procedural. The General Assembly was required to conduct only a cursory review of the rules package to ensure that it met the legal boundaries set under 2007 legislation, she noted, and the Senate was not supposed to consider whether the rules would adversely impact jobs -- a claim that drew a scathing response from the GOP.

"I have a sneaking suspicion [that] if people were losing their jobs en masse in your district the way they are in mine, you'd want to discuss the economic implications," Penry said. Penry's district covers parts of the Western Slope, where most of the gas drilling boom has occurred.

Ritter plans to sign the legislation but has not set a date, said a spokesman. The rules changes were completed by the Colorado Oil and Gas Conservation Commission (COGCC) late last year (see NGI, Dec. 15, 2008). The General Assembly had approved legislation to require the COGCC to update the rules in 2007, when the gas drilling boom was under way. And the COGCC had conducted extensive public hearings across the state before finalizing the package.

Although many of the rules revisions are minor, producers had fought changes that give more weight to wildlife habitat and migration, environmental protection and public health and safety.

Meg Collins, president of the Colorado Oil & Gas Association, said the rules "are far from perfect and there still remains a question of how they'll affect jobs, the economies of the local communities where the industry has operations and how they're going to impact private property rights."

State Sen. Chris Romer, a Democrat, said Wednesday the rules overall pass the "son-in-law test" by not being as good (i.e., stringent) as the environmentalists had wanted nor as bad as opponents had feared.

The 177-page rules package revises 108 sections of Colorado's energy regulations. Many of the revisions are minor, but one section, opposed by producers operating in the state, will require producers to obtain consent from landowners on wildlife conditions before they are allowed to drill. If the landowners refuse consent to drill, the COGCC director would have the authority to either issue or withhold a drilling permit.

To view the rules package, visit http://cogcc.state.co.us/, click on "Final Amended Rules" and then "COGCC Amended Rules."

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