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Colorado Lawmakers Eye Bills Affecting Drilling Rules, Regulators

As the Colorado legislature moves towards ajournment in mid-May a bill affecting the handling of water disputes between drilling companies and ranchers, and another reforming the two-year old Colorado Oil and Gas Conservation Commission (COGCC) were moving through committees.

After getting a green light late last month in the Colorado legislature's House, the Senate has taken up a bill (HB 1286) to strengthen the powers of the state engineer's office in resolving water disputes between ranchers and oil and gas drilling companies (see Daily GPI, March 28).

The bill was referred to the Senate Agriculture Livestock and Natural Resources Committee, a state lawmaker sponsoring the bill told NGI Wednesday. Meanwhile a second bill -- HB 1223, which would alter the makeup of the COGCC -- advanced through a House committee on Monday.

State Rep. Randy Baumgardner said HB 1286 is scheduled to be heard Wednesday (April 13). "We just have to wait and see," said the state lawmaker who is sponsoring the proposed legislature.

The state's director of the Department of Natural Resources supports the measure as a means of avoiding a two-year period of uncertainty for oil and gas producers.

The House Agriculture, Livestock and Natural Resources Committee March 21 voted 13-0 to send HB 1286 to the full House, which sent it on to the Senate a week later. It was introduced in the Senate last Friday. Baumgardner is the vice chairman of the House agriculture committee.

Senate action will need to come in the next four weeks before the scheduled May 11 adjournment of the state legislature.

Lawmakers so far agree that Colorado state government needs to strengthen its power in water disputes that come up between ranchers and oil and gas drillers. Local news media have characterized the proposed law as a response to a 2009 Colorado Supreme Court decision in which ranchers prevailed in a lawsuit against the engineer's office for allegedly not protecting ranchers' water rights when gas wells were drilled.

The state's high court ruled two years ago that groundwater used to produce coalbed methane was not a waste product and that producers would have to separately obtain water permits if water supplies were affected (see Daily GPI, April 22, 2009).

Baumgardner is also one of six legislators to sponsor HB 1223, which passed the agriculture committee by a 6-5 vote on Monday. The bill calls for reducing COGCC -- which was expanded to nine members in 2009 -- back to seven members, all of whom are appointed by the governor. It also mandates that five members represent the oil and gas industry, an increase of two seats.

HB 1223 now moves on to the House Appropriations Committee. Michael Freeman, an attorney with the environmental group Earthjustice, told NGI on Tuesday that the group opposes the measure.

"It's a bad solution to a non-existing problem," Freeman said. "Under the current makeup, the industry already has the largest bloc of votes. Yet the COGCC issued a near-record level of drilling permits last year. I think that is proof enough that this commission hasn't been a roadblock. We've seen a very balanced approach and I think it's worked very well so far."

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