The Colorado Oil & Gas Association (COGA) has dropped a two-year-old lawsuit against state regulators that had challenged more stringent drilling rules.

The industry lobbyist and the Colorado Department of Natural Resources (DNR) said in a joint statement the lawsuit was being dismissed following talks between COGA board members and the newly appointed DNR Director Mike King.

During his successful campaign last fall, Gov. John Hickenlooper, a Democrat and former geologist, urged cooperation between the energy industry and the administration. Former Gov. Bill Ritter had spearheaded the effort to enact the tougher drilling rules. Soon after their enactment, COGA filed the lawsuit (see Daily GPI, Nov. 13, 2009).

"The new administration clearly recognizes the valuable contribution Colorado's oil and gas industry makes to the economy and the importance of Colorado natural gas in reducing air pollution," said COGA CEO Tisha Conoly. "We are confident that going forward we will have a place at the table and our concerns will be fairly considered."

King, who had been appointed by Ritter and retained by Hickenlooper, began meeting with COGA officials in January at the new governor's urging, according to a statement by COGA and DNR.

"This heralds what we hope will be a new era of collaboration and predictability in the development of our energy resources," said Hickenlooper. "It's important to get beyond old fights and move ahead to develop Colorado's abundant natural gas and protect our environment at the same time."

Newly elected COGA Chairman Scott Moore, an Anadarko Petroleum Corp. executive, noted that "natural gas is a cornerstone of Colorado's energy, economic and environmental solutions moving forward. The Hickenlooper administration clearly recognizes this and is committed to a balanced and engaged dialogue moving forward."

Despite protests by some of the state's Republican leaders -- but strong support from the gas industry -- Ritter's administration also led enactment of the Clean, Air, Clean Jobs Act to reduce Denver-area smog and create local markets for the state's abundant gas supplies. The act, with the support of Xcel Energy, led to the closing of several aging coal-fired power plants along the Front Range and plans to build gas-fired facilities.

"The administration promised only to listen to all sides in making decisions," King said. "Colorado cannot effectively address the challenges of the future unless everyone is working collaboratively, and litigation is not the best way to achieve that goal. We are happy this litigation is over."

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