After relying on industry voluntary actions regarding drilling setback and water sampling approaches, Colorado regulators are poised to establish new mandatory rules covering exploration and production (E&P) companies.

The Colorado Oil and Gas Conservation Commission (COGCC) has scheduled hearings Monday through Wednesday in Denver to finish the job it began last month with the review of draft rules expanding setback requirements and water sampling before and after drilling (see Shale Daily, Dec. 14, 2012).

COGCC officials emphasize that the proposed rules will make Colorado a leader in the area nationally, but oil/gas industry representatives argue that industry-driven voluntary efforts in the state already lead the nation in groundwater protection and other areas.

What is likely to result by the end of the day Wednesday is that the nine-member appointed COGCC will establish new and amended rules covering well location specifications for statewide and populated areas, along with water protection before and after a well is drilled. Industry and other stakeholders that have been part of the draft rule process will offer additional input, but the commissioners ultimately will vote on the new and amended setback rules Monday, and the water sampling specifications on Wednesday, sources told NGI’s Shale Daily.

The Colorado Oil and Gas Association (COGA), which has advocated making mandatory essentially what the industry has been doing in recent years voluntarily, is expecting tougher requirements to be implemented by COGCC. COGA’s Denver-based spokesperson emphasized that the industry will continue to work with the state regulators.

“We’re supporting alternate rules for setbacks and for groundwater,.” COGA’s Doug Flanders told NGI’s Shale Daily Thursday, confirming that COGCC is supposed to make its final decisions on the two issues next week.

For setbacks, COGA and a coalition (see Shale Daily, Dec. 26, 2012) are supporting 350 feet statewide and 750 feet in high occupancy areas, with an urban mitigation zone. The draft rule changes are mandatory, but not necessarily stronger, according to Flanders.

“If [COGCC] took the current voluntary groundwater testing program and made it mandatory, we would have one of, if not the most, comprehensive programs in the nation,” he said.

COGA plans to make the point at the hearings next week that the state already has implemented a number of “successful” basin-specific water testing programs that “have built public confidence in industry’s ability to protect groundwater in conjunction with oil/gas drilling operations.” In addition, a statewide voluntary groundwater monitoring program has been operating during the past 12 months, Flanders said.

“Any new rule should build off of these successes without unnecessarily hampering energy development with excessive requirements,” he said.

On the setbacks, COGA has emphasized the complexity of the issue, trying to stress the fallout the proposed mandatory rules could have on various parts of the state’s economy, and thus, the impetus in back of its coalition of interests, ranging from major businesses, the building industry and agriculture.