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Colorado City Debates Drilling Ban vs. Operator Agreements

Even as a statewide task force struggles to find potential longer term solutions to Colorado's local control issue for future oil/natural gas development (see Shale Daily, Jan. 23), elected officials in the city of Erie, north of Denver, on Tuesday debated how to handle energy development within their borders.

A proposal to reimpose a moratorium on drilling was rejected narrowly (4-3) earlier this month.

In a broadly constructed draft ordinance, Erie trustees are considering a temporary moratorium on new drilling permits, consideration of new laws and regulations that may come from the  task force, a review of other local government regulations on oil and gas, and consideration of revising the city's existing uniform development code as it related to oil/gas activity.

Erie has a memorandum of understanding (MOU) with some producers, including Encana Corp. and Anadarko Petroleum Corp., and its officials have been locked in discussions with the two E&P operators about a new agreement. At the same time, some officials and residents are pushing for a moratorium on drilling.

Encana has told the city it is willing to suspend any new permit applications for the active area of the city that falls in Weld County while city officials examine their options, a Denver-based spokesperson told NGI's Shale Daily. He added that Encana is urging the city to work out a new MOU with oil/gas operators, rather than impose a ban or moratorium on drilling.

The Colorado Oil/Gas Association (COGA) is tracking the latest developments in Erie, but did not want to comment on the situation before city officials hash out their options Tuesday night.

In the summer of 2012, Erie's newly elected seven-member board of trustees voted to end a six-month moratorium on new oil and natural gas drilling after securing agreements with producers that placed stricter regulations on their operations (see Shale Daily, Aug. 30, 2012).  City leaders now want to re-do those MOUs.

The existing MOUs include restrictions on hydraulic fracturing, which some residents have protested. Residents also have claimed that people were moving away because of the oil and gas operations.

"As successful as the town was in dealing with oil and gas in the past, time has not stood still," said Mayor Tina Harris in a letter posted on the city's website. A supporter of the rejected moratorium proposal, Harris urged residents to work together to allow Erie "to lead the way" on the issue, and she was critical of citizens resorting to "denigration and name-calling" of the trustees.

Encana's spokesperson said that most of its 49,000 acres in the area include what now are developed or developing sections of the city, whose population has tripled over the past 15 years. Earlier this year, noise, vibrations and general daily disruptions were allegedly caused by drilling in the Vista Ridge area of the city, prompting renewed interest in a moratorium.

Harris said she favors a moratorium to give the city more time to see what comes out of a statewide task force. She thinks the city can "still get much, if not most of what we want from an MOU, if we combined our energy in a positive manner," reflecting on the split the issue is causing in the city.

Harris chaired a public meeting Jan. 20 to get citizen input on a potential new MOU. 

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