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Colorado Oil & Gas Local Issues Task Force Leaves Unfinished Business

In a minority report, the recently concluded 21-member Colorado statewide task force looking at local control issues for oil and natural gas activities has left a wide array of unfinished business captured in 24 recommendations that failed to receive two-thirds votes. They are part of the final report, but not part of the nine recommendations being passed on for implementation.

The minority report recommendations, however, could be picked up by others and pushed in the state legislature, administrative agencies and/or the statewide ballot initiative process.

"[Gov. John Hickenlooper] won't act on the other recommendations discussed by the task force, although others may work on refining some of the concepts for the Colorado Oil/Gas Conservation Commission [COGCC]," Hickenlooper's spokesperson told NGI's Shale Daily on Tuesday.

Among the 24 proposals, the majority were directed at the COGCC, with about one-third (eight) aimed at the state legislature, including proposals to create an oil/gas dispute resolution panel, allow local government to assess fees to fund inspections and monitoring of the oil/gas industry, and amend existing state oil/gas laws to acknowledge local authority.

While the vote counts varied greatly for the minority proposals, some coming within a vote of attaining two-thirds majority, there was a constant disagreement between the two task force co-chairs, La Plata County Commissioner Gwen Lachelt and XTO Energy President Randy Cleveland. Local government representative Lachelt supported 19 proposals, all of which industry representative Cleveland opposed.

A spokesperson for the Colorado Oil/Gas Association (COGA) noted that the proposals failing to get at least 14 votes are not part of the official recommendations, but they are part of the task force report delivered to Hickenlooper, and they are posted on the Department of Natural Resources' website (report).

Six of the minority proposals were highlighted by Wells Fargo Securities LLC senior analyst David Tameron as being potentially "the most detrimental and relevant to the industry," although he cautioned that it is still unclear how, if at all, the six recommendations might be part of the state legislative process this year.

The recommendations include three that would amend COGCC's rules related to (a) local government regulatory authority, (b) local government well siting, and (c) a general acknowledgement of local authority in oil/gas matters. Of the six, the one that came closest to making the final cut calls for coordinating local land use processes with the state issuance of oil/gas permits. The vote was one short (13-8).

Tameron's conclusion is that none of the nine recommendations being passed on for implementation would "pose a hurdle" to the oil/gas industry. In contrast, the six minority recommendations he highlighted "are sure to be contentious between both sides, should they make it onto lawmakers' white board," said Tameron, who shared the analysis with colleague Gordon Douthat, another senior analyst at Wells Fargo.

ISSN © 2577-9877 | ISSN © 2158-8023

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