Nine of Colorado's leading natural gas and oil producers joined with Gov. Bill Ritter on Tuesday to announce agreements designed to expedite the drilling permit process while minimizing impacts to wildlife habitat on hundreds of thousands of acres in the Piceance Basin on the Western Slope.
The agreements with the state would protect wildlife and wildlife habitat on about 335,000 acres, or more than 550 square miles. They spell out how gas and oil operations will be conducted while protecting habitat and wildlife, including sage grouse, elk and deer.
The wildlife mitigation agreements come more than a year after the state enacted a revised drilling rules package that took months to complete (see Daily GPI, March 25, 2009). Many of the revisions were minor, but one section, vehemently opposed at the time by producers and many state Republicans, specifically required more consideration for environmental and health issues before permits are approved.
The regulations also for the first time gave the Colorado Division of Wildlife (CDOW) authority to approve or disapprove permits.
Under the newly created wildlife mitigation agreements, the Colorado Oil and Gas Conservation Commission (COGCC) and CDOW would work together to identify, among other things, the most appropriate locations for roads and well pads before the permitting process went forward, allowing operators to fulfill their wildlife mitigation obligations in what is hoped to be a more streamlined fashion.
Encana Corp.'s Denver division, Encana Oil & Gas (USA) Inc., reached the first agreement last September covering 44,713 acres in Garfield County. The newest agreement, reached on Monday, was with ExxonMobil Corp. and covers 149,946 acres in Rio Blanco County.
The wildlife mitigation plans are voluntary. Having approved plans in place to cover specific tracts of land is intended to offer companies more certainty that drilling permits for individual wells will be approved, and approved more quickly, said COGCC Executive Director David Neslin.
Drilling permits in an area covered under an approved plan could be given the green light up to 10 days faster then permits for areas not covered by a wildlife plan, Neslin said. It now takes about 30 days to obtain an approved permit from the COGCC.
"We're hopeful that this is the first step and that there will be more plans in other areas of the state," Neslin said.
The 10 wildlife mitigation plans, sponsored by nine oil and gas companies, cover about 18% of the Piceance Basin, Neslin said.
"We're both protecting wildlife and habitat and developing Colorado's vast natural resources," said Ritter.
In addition to Encana and ExxonMobil, producers with mitigation plans in place are Gunnison Energy Corp., Antero Resources Corp., Delta Petroleum Corp., Noble Energy Inc., Marathon Oil Corp., Black Hills Corp. and Williams Cos.
The agreements allow a "viable drilling program that at the same time protects habitat and minimizes impacts," Encana spokesman Doug Hock told the Denver Post. "This is something that naturally flows from work we already were doing with the Division of Wildlife. This just formalizes a lot of what we were doing."
Suzanne O'Neill, executive director of the Colorado Wildlife Federation, said her group was "glad that wildlife mitigation plans have been negotiated. We're hopeful they will minimize adverse impacts to wildlife. This shows that companies are quite willing and able to comply with reasonable rules."
The COGCC said earlier this year that only about 7% of its new drilling permit applications were being flagged for wildlife issues, and most of those flagged were being resolved by the operators and CDOW. Colorado issued more than 3,100 drilling permits through the first six months of the year and is on pace to issue 6,500 permits by the end of the year, which would be 30% more than in 2009.
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