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Local Control, Seismic Liability Bills Slowed in Colorado Legislature

Two proposals that could expand local control over oil/natural gas activities -- or that could expand the operators' liability for drilling-related seismic events -- have hit roadblocks in the Colorado legislature.

The local control measure, House Bill 1355, was watered down sufficiently on Monday through amendments to cause its backers to set aside the proposal. Another on quake-related liability (HB 1310) that was passed onto the Senate last month (see Daily GPI, March 24) has yet to be heard in the Republican majority Senate, and as of Tuesday no hearing had been set. Colorado lawmakers are scheduled to adjourn for the year May 10.

Gov. John Hickenlooper has opposed both bills, but he urged letting the legislative process work, noting also that the Colorado Supreme Court is close to issuing a decision on the roiling issue of more local control over oil/gas in lieu of the courts consistently ruling in favor of state preemption on these matters.

“We applaud today’s bipartisan House vote to defeat HB 1355, said Dan Haley, CEO of the Colorado Oil and Gas Association (COGA).  "The defeat reaffirms decades-old Colorado law and policy that sets bright lines that recognize the unique aspects of oil and gas location, surface and mineral private property rights, and development.

"It also reaffirms the state's primacy over oil/gas production, which was discussed and reaffirmed during the governor's task force, during the [subsequent] Oil and Gas Conservation Commission [OGCC] task force rulemaking, and in earlier [state] Supreme Court rulings," Haley said.

The Colorado House's passage of HB 1310 has caused concern among COGA officials and across the industry.

Haley said COGA recognizes that some communities across our state "have their own unique issues and concerns when it comes to oil/development, and the industry intends to continue working with those local communities to meet their needs and find a balance that allows for responsible fossil fuel development while respecting the rule of law.

According to COGA, more than 30 communities across Colorado already have entered into private contracts with oil and gas companies that allow those communities to invoke rules that go "above and beyond the state’s already tough regulations." With the new task force recommended rules and the ongoing cooperative agreements, local governments can have a strong and important voice and role in energy development in their communities, Haley noted.

HB 1310 narrowly passed out of committee last month, causing concerns by the state's two main industry trade associations, which feared a chilling impact on oil and natural gas activities, including hydraulic fracturing (see Daily GPI, March 15). At the time, the measure was given little chance of getting through the Senate, and no action has been taken on it there.

The bill “holds oil and gas operators strictly liable for their conduct if oil and gas operations, including a hydraulic fracturing treatment or reinjection operation, cause an earthquake that damages property or injures an individual," according to draft language in HB 1310. The bill attempts to specify acceptable conduct by oil/gas operators and give landowners more recourse when the conduct harms the land, people on the land or the surface owner’s property.

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