Calling it a glimpse of the future under proposed energy regulatory reform now moving through the Colorado legislature, industry representatives are blasting a decision by the Adams County’s elected Board of Commissioners to establish a temporary moratorium on new drilling.
County commissioners attributed the temporary measure, effective immediately, to Senate Bill (SB) 181 on a fast track to the governor’s desk. The bill would create more local government authority in regulating oil and gas activity.
Pipelines, active wells or any applications previously submitted to Adams County are not affected. The moratorium is intended to last at least six months and is applicable to unincorporated parts of the county.
“Until we have more clarity on whether this current bill will pass and what impact it could have locally, the board decided to enact a temporary moratorium so we can evaluate any new tools available to address the health and safety of our residents,” said Board Chair Steve O’Dorisio.
The moratorium applies to a site and associated equipment used for:
- Production, treatment, and/or storage of oil, gas and waste products;
- Individual well pads with one or more wells, producing liquid petroleum and/or natural gas, including associated equipment;
- Temporary storage and construction staging for oil and gas; and
- Any other oil and gas operation that may cause “significant degradation."
The Colorado Oil and Gas Association (COGA) and Colorado Petroleum Council (CPC) blasted the moratorium and blamed the pending legislation.
COGA CEO Dan Haley said "politics trumped policy as the uncertainty surrounding SB 181 spilled out of the statehouse and led to its first moratorium.” He said unless inherent flaws in the legislative proposal are corrected, "we'll see this uncertainty and confusion spread."
Haley said a temporary county ban was unnecessary and could have a chilling effect on the state's economy. “It sends a negative message to businesses and workers in Adams County.”
CPC spokesperson Ben Marter said Adams County officials have given "a glimpse of the consequences of SB 181," even as backers for the bill have tried to assure critics that local governments would not take these actions. "This bill permits exactly what has happened."
SB 181 presents a clear form of "regulatory risk" for operators in the Denver-Julesburg Basin, according to an analysis by Colorado-based BTU Analytics. Last November, 55% of Colorado voters rejected anti-oil and gas measure, Proposition 112, analysts noted.
SB 181 has a number of uncertainties about it, but "a few things are certain -- it aims to give increased authority to local governments, increased voice to impacted partie, and change the Colorado Oil and Gas Conservation Commission," said BTU analyst Matt Haggerty.