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Colorado Regulators Drop Time-Out Provision in Draft Drilling Rules

The Colorado Oil and Gas Conservation Commission (COGCC) said this week it doesn’t plan to include a time-out provision for mandated short drilling lulls under draft local control rules undergoing public comment because regulators already have that authority.

Regulators, which have scheduled another public comment hearing for Jan. 25, haven’t voted yet on any final recommendations issued by Gov. John Hickenlooper’s task force concerning local control over oil and gas operations (see Shale Daily, Oct. 8) .

Controversy arose in earlier hearings discussing COGCC draft rules for two task force recommendations, with industry representatives contending that they go too far regarding regulating large drilling projects and requiring operators to share advanced, long-term drilling plans with local officials (see Shale DailyNov. 17).

Colorado Oil and Gas Association (COGA) CEO Dan Haley and other industry representatives raised concerns of regulatory overreach at a hearing last month in Denver.

One concern is regulatory language about having state officials call for 90-day time-outs of all drilling, including hydraulic fracturing (fracking) in certain local areas, as opposed to short moratoriums or outright bans.

Denver-based Bill Barrett Corp. is one producer that indicated in comments that it would be reluctant to drill in the state if the time-out provision were in effect.

"Based on comments we received through prehearing statements and responses about the proposed duration language, COGCC requested an opinion from Assistant Attorney General [AG] Jake Matter about the commission's authority to impose limits on the duration of oil/gas operations," a COGCC spokesman told NGI's Shale Daily on Tuesday.

The AG’s office concluded that state regulators already have the authority to impose time limits under current rules. "Based on this conclusion, COGCC staff has removed any time-out language from the new proposed draft of the rules," he said.

COGCC Director Matt Lepore cautioned that there is nothing that stipulates that the time outs would last up to 90 days in the middle of drilling or fracking.

Separately, Weld County, the state's biggest energy-producing county, has embarked on a rulemaking effort that would require new drilling sites to undergo public hearings for all oil/gas operations. County officials reportedly are dissatisfied with the proposed state rules, contending that they don't give enough input to agriculture and private property owner interests.

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