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Colorado Governor Makes Deal to End Local Control Ballot Measures

On the day of the deadline for statewide measures to qualify for the ballot, Colorado Gov. John Hickenlooper on Monday announced a deal for the withdrawal of two measures on local control issues related to oil and natural gas development.

Environmentalists and a congressman backing the proposed measures (Initiatives 88 and 89) made a last-minute deal with Hickenlooper, part of which called for the proposals to be withdrawn. Under state requirements, Monday was the deadline for proponents to demonstrate sufficient voter support to put the issues on the ballot.

Hickenlooper announced the creation of an 18-member task force aimed at crafting recommendations to help minimize land use conflicts that can occur when siting oil and gas facilities near residential and commercial developments. Details on implementing the agreement were still being worked out on Tuesday, and some political observers were skeptical about whether both sides will withdraw their respective ballot initiatives.

“Colorado is fortunate to have an abundance of energy resources, and we have an obligation to develop them in a way that is safe for our residents, supports jobs and the economy, respects private property rights and protects our environment,” Hickenlooper said. “The work of this task force will provide an alternative to ballot initiatives that, if successful, would have regulated the oil and gas industry through the rigidity of Constitutional amendments and posed a significant threat to Colorado’s economy.

The task force will be co-chaired by La Plata County Commissioner Gwen Lachelt and XTO Energy Inc. President Randy Cleveland, and members will include oil/gas industry, agricultural, home building, conservation, local government, and civic group representatives. It was not clear which state and industry organizations will be represented on the panel.

No special state legislative session -- as Hickenlooper had sought until mid-July -- will be called, but a panel co-chaired by local government and industry officials is to recommend bills addressing the local control issues for next year's state legislative session. Hickenlooper dropped the special session effort last month (see Shale Daily, July 17).

U.S. Rep. Jared Polis (D-CO), who supported Initiatives 88 and 89, called the deal worked out Monday "a victory for the people of Colorado and the movement to enact sensible fracking regulations."

The Colorado Oil and Gas Association (COGA) praised Hickenlooper for "never giving up" in searching for a compromise on the local control issue, which has festered in more than a half-dozen local jurisdictions where bans or limits on drilling and hydraulic fracturing (fracking) have been imposed over the objections of state officials and COGA (see Shale Daily, Sept. 7, 2012).

COGA said the governor has "cleared a path for conversation and understanding" to replace the entrenched fight among backers of the measures and the industry and its allies. "These issues are complex and must include a wide range of stakeholders to find common ground with workable solutions," said COGA CEO Tisha Schuller, who added that it is now time to work on "localized solutions."

Echoing Schuller's words, Tom Sheffield, vice president for the western division at Pioneer Natural Resources and COGA chairman, said the industry has been engaged in a long process in Colorado searching for a solution. "It is heartening to see that we can now focus on bringing people together to find solutions."

On Tuesday, a COGA spokesperson told NGI's Shale Daily that the industry group expected the ballot measures to be pulled, but they had not been as of the morning after the governor's announcement. He said it was also not clear if COGA would have a representative on the governor's task force.

"I don't know if any [of the initiatives] have been officially withdrawn but the expectation today [Tuesday] is that they will all be pulled," said the spokesperson, Dan Haley.

An industry-back citizens' group opposing the two local control measures, Coloradans for Responsible Energy Development (CRED) on Tuesday reiterated its opposition to constitutional measures to address oil/gas oversight. "The announcement of this task force seems to confirm the proper place for strong regulations and enforcement of oil and natural gas development is ultimately in the hands of our state environmental agencies,' said CRED's Jon Haubert, adding that people were reiterating support for a "strong, state-led system."

Echoing Schuller's words, Tom Sheffield, vice president for the western division at Pioneer Natural Resources and COGA chairman, said the industry has been engaged in a long process in Colorado searching for a solution. "It is heartening to see that we can now focus on bringing people together to find solutions."

Still in the works, however, are industry counter-proposals, initiatives 121 and 137. The first prohibits local governments that ban drilling from receiving tax revenues from the oil/gas industry. The second requires that backers of future ballot measures divulge the potential fiscal impact their proposals would have on the state.

In what he called "a good faith effort" to help bring parties together, Hickenlooper said he would ask the Colorado Oil and Gas Conservation Commission (COGCC) to dismiss pending litigation challenging its ordinance and called upon all parties to pull down ballot initiatives on the issue (see Shale Daily, July 25).

A spokesperson for the COGCC told NGI's Shale Daily on Tuesday that the commission plans to hold a special meeting this week to consider the Longmont litigation. On another issue, he could not say whether COGCC would have a representative on the 18-member task force.

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