The Colorado Oil and Gas Conservation Commission (COGCC) ended three days of hearings in Denver Wednesday as it drew closer to finalizing new setback requirements for oil and natural gas wells, but it still fell short of finishing the unpopular and complex task.
After a provisional nonbinding 7-2 vote, the nine-member panel agreed to meet again during the week of Jan. 21 to complete the new rule, which will have a significant impact on exploration and production (E&P) operators, along with a new water sampling rule finalized on Monday (see Shale Daily, Jan. 10).
During long discussions and more input from stakeholders, the COGCC moved away from its draft setback approach outlined in December when discussions examined the relative merits of well setbacks ranging from 1,000 to 350 feet, and distances varied between “high occupancy” (urban) areas and other less densely populated locations (see Shale Daily, Dec. 14, 2012).
The draft now in play proposes a 500-foot setback requirement statewide with no special urban mitigation zone. Several of the commissioners lamented the fact that they thought the data was incomplete for setting a new rule, and one called the task “the most complex case” he had ever encountered.
Industry criticized the outcome so far. After being dissatisfied with Monday’s move toward new mandatory water sampling rules before and after completing a well, the Colorado Oil and Gas Association (COGA) was similarly upset after Wednesday’s action.
“Setback regulation is a complex issue and requires an understanding of land use as well as surface and private property mineral right,” said COGA spokesperson Doug Flanders. “And after months of stakeholder meetings and three days of hearings, COGCC nearly finalized its oil/gas setback rule.
“We do not believe the new proposed rule properly acknowledges the complexities and the impacts to the diverse array of citizen stakeholders such as the farmer, rancher, mineral rights owners, business owner, home developers and the many others that are directly involved.”
Flanders stressed that the setbacks are “much more” than a simple measurement of distance. He said they encompass “the notice, engagement and mitigation measures involved in responsible oil/gas development.” COGA’s argument all along is that what the state makes mandatory should reflect more of what the industry already has been doing voluntarily.
COGA supports “a more holistic approach” backed by a coalition of E&P operators, such as Anadarko, Encana, Noble and PDC Energy. It advocated:
Instead, what COGCC has now put on the table, COGA argued, potentially has severe economic repercussions for various major sectors of the state’s economy.
Current regulations and the coalition’s proposal would allow for both efficient land use and safe drilling programs, Flanders said. “However, this new proposed setback rule [drafted by COGCC Wednesday] will ultimately result in more interference with surface use and development.”
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