Oil and gas industry groups in Colorado were swift in rebuking rules adopted this week by Adams County, describing them as “unreasonable” and “hasty.”
The county’s Board of Commissioners, which oversees a production hot zone in the north-central part of the state, adopted operating regulations governing permitting, safety and environmental standards. A new setback rule requires oil and gas facilities be at least 1,000 feet from occupied buildings, including schools and residences.
The Colorado Oil and Gas Conservation Commission (COGCC) put new setback rules into effect in January, which stipulated that facilities be at least 1,000 feet from schools and high-occupancy buildings, and 500 feet from residences.
“We understand that every development application is different,” said Board Chairman Steve O’Dorisio. “And with Adams County having such a diverse geography from urban to rural areas, the hearing process allows us to make exceptions when it makes sense to do so.”
O’Dorisio added, “It’s a tough line to toe, but we think these regulations balance the interests of all parties involved.”
Some neighborhoods in Adams County are surrounded by hundreds of wells that are in close proximity to one another, enhancing the need for stricter setback distances until more research is available, O’Dorisio added.
The regulations also prohibit 23 different chemicals from use in hydraulic fracturing fluids, as well as reporting on the use of chemicals in the permitting process. COGCC regulations emulate U.S. Environmental Protection Agency rules that do not prohibit the use of any fracturing chemicals as Adams County rules would, a spokesperson said.
The Colorado Petroleum Council (CPC) and the Colorado Oil and Gas Association (COGA) criticized the county’s move.
“Many of the provisions contained within these new rules and regulations will significantly hinder future natural gas and oil development within the county,” said CPC Executive Director Lynn Granger.
If a permit application can’t meet all the criteria, including the 1,000 foot-setback, permit applicants may request a waiver. However, the waiver compromise did not appear to go far enough in the eyes of groups representing the energy industry.
“Regrettably, many of the regulations of the code as adopted by Adams County...extend far beyond those which are necessary or reasonable,” Granger said. “We encourage the Adams County Board of Commissioners to reconsider the hasty adoption of this code.”
The words “necessary” and “reasonable” are included in state Senate Bill (SB) 181, which was signed into law in April by Gov. Jared Polis, noted COGA CEO Dan Haley.
The bill “specifically states that any new regulations at the state or local level must be both necessary and reasonable,” Haley said. The new regulations “push beyond this statutory requirement and exceed the county’s authority.”
Under SB 181, local governments are granted the authority to regulate oil and gas operations under the same planning and land-use powers they hold over other industries.
“One of our primary concerns with Adams County’s new code is that it would regulate downhole activity, which is explicitly beyond the scope of the newly minted state law,” said Granger.
Another sticking point for industry is the call for “alternative site analysis” in the permitting process. Operators are required to identify three possible locations for a proposed oil and gas facility (OGF), which may lengthen the application process.
Discussions and coordination between local officials and oil and gas operators will continue, opening the door to amendments going forward. The CPC “would welcome the opportunity to continue discussions in an effort to achieve a mutually-agreeable outcome,” Granger said.
For the county’s part, certain concepts had been withheld from the regulations to allow for more time to garner industry input, O’Dorisio said.
Last year, Adams County was one of the top four producing counties in the state by crude output, according to COGCC data. The other three counties are No. 1 Weld, along with Larimer and Rio Blanco. Adams County was one of multiple Colorado counties that called for a moratorium on new oil and gas permitting after SB 181, and it is scheduled to end this month.
Industry has also argued that hindering oil and gas development would bring economic consequences to the communities in which they operate. Haley noted that Adams County is home to more than 5,000 energy industry families that contribute more than $1.5 billion in economic benefits to local communities.
“They deserved better representation from their local government,” he said.
The COGCC oversees the state’s energy industry, but SB 181 allowed for the possibility that county rules could be more stringent than the state’s.
A spokesperson on Wednesday said the commission was “committed” to implementing SB 181, “which includes increasing the collaboration between COGCC and local governments as they determine what are the best options for their communities in respect to public health, safety, welfare, environment, and wildlife considerations.”