Agreements between two oil and gas producers and a small Front Range Colorado town have added to the state’s rules covering hydraulic fracturing and depend solely on the state for enforcement. Memoranda of understanding (MOU) inked separately by Encana Oil & Gas Co. and Anadarko Petroleum Corp. with the city of Erie, CO, include several best management practices mutually agreed to with city officials and incorporated into state permitting requirements for new wells.
“This really is the first of its kind in Colorado,” said a Denver-based spokesperson with Encana. “We and Anadarko executed almost identical agreements outlining a series of best practices that in some cases go beyond the state’s requirements for our industry.”
Part of the MOUs has been incorporated by the Colorado Oil and Gas Conservation Commission (OGCC) into the rules applying to new exploration and production (E&P) drilling permits. “Erie wanted to have a list of practices that the industry would agree to while operating in its high-density community, and we agreed to the list,” an Encana spokesperson told NGI’s Shale Daily.
The city and operators worked together to develop the list of best practices, but they faced a challenge in terms of enforcement because the local jurisdiction has no power to regulate E&P. “Our solution was to have the best management practices submitted as part of the state permitting and they would become conditions of approval,” the spokesperson said.
The state agreed to do so, she said, leaving the enforcement and regulatory authority in the hands of the state. “That’s where it belongs,” the spokesperson said.
Without putting any numbers on the level of Encana’s activity in Erie, the spokesperson said “we certainly have future development there, and it is important to point out that we have been operating there safely and responsibly since 2006.”
The MOUs are designed to address some local concerns without taking away from the state’s rules and regulations, which she called “some of the highest operating standards in the industry.”
Among the best practices are the elimination of open pits during drilling and completion operations. That is not something that is required by the state elsewhere. Notification of citizens in the area is also included as is the use of vapor recovery units and setback requirements for keeping wells a reasonable distance from homes and businesses.
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