Gov. Jared Polis’ administration is pledging to keep the oil and gas permitting and hearing process moving — even as it writes new rules to protect health and the environment from the impacts of drilling.
The Colorado Oil and Gas Conservation Commission expects to issue new criteria for evaluating thousands of pending drilling applications days after the new legislation is signed into law, said Jeff Robbins, the commission executive director.
The commission will meet in mid-May and also plans to approve rules adding administrative law judges who will help address the months-long backlog of agency hearings.
The legislation, which is awaiting Polis’ signature, requires the commission to issue a new set of “objective criteria” within 30 days on how to evaluate drilling applications under a new system that gives local governments more oversight and emphasizes health, safety and environmental standards.
Robbins said he won’t need a month to develop the initial criteria and hopes to publish them for public feedback within a week of the bill taking effect.
“I’m trying to provide a sense of certainty and predictability for industry,” he told The Colorado Sun in an interview Tuesday. “I’m trying to provide the message that the objective criteria are going to be created soon and with industry input. And I’m trying to provide perspective that the objective criteria is not a moratorium, not a ban or anything like that.”
Since mid-January, 88 new oil and gas locations and 874 well permits have been approved by the Polis administration using 15 temporary criteria that Robbins put in place when he took the helm.
The question about de facto moratoriums and lengthy permitting delays was a major fear of the state’s oil and gas industry as the legislation — Senate Bill 181 — sped through the General Assembly.
There are more than 6,000 pending permits after the industry rushed to file applications ahead of the November election, when a ballot initiative proposed a 2,500-foot setback from homes, schools and other buildings. The measure failed but the backlog remains.
Under a forthcoming rule, administrative law judges will take over hearings on some nuts-and-bolts issues such as drilling spacing orders, which are sometimes a point of dispute between drillers, pooling orders, and drilling applications that draw protests from property owners or communities. About 30 percent of applications are protested, according to the commission staff.
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Sara Loflin, executive director of the League of Oil and Gas Impacted Coloradans, an umbrella organization for communities facing drilling, said it is the content not the speed of putting new criteria in place that is key.
“If the new criteria formalize the existing ones, it is not a bad thing,” Loflin said. “There are some permits where it is necessary to slow things down. But wells out east, in say Yuma and Sterling, where local government is in agreement, they should go ahead.”
Robbins suggested the initial criteria put in place would reflect the intent of the legislation and give extra scrutiny to applications within 1,500 feet of a home or in a sensitive flood plain, among other factors.
The commission, he said, “will be looking to see if can this be permitted in the spirit of 181, or is this one so complicated that it deserves the scrutiny of the rules that we haven’t made yet.”
In the next couple weeks, Robbins said he is speaking to at least three industry-related organizations and making clear the commission’s new vision.
The industry, he said, is “aware that they should be moving forward with wells that are sensible, in good locations, that can get approved.
“It’s a balance,” he continued. “We want to ensure that the oil and gas industry is allowed to thrive and move forward and flourish, but we have the new mandate from 181.”
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Ben Marter, a spokesman for the Colorado Petroleum Council, said the industry plans to work with the state to develop the new regulations.
“In the final weeks of debate over Senate Bill 181, state government officials committed to working with industry as we begin discussing highly complex regulatory rulemakings and other changes to longstanding state law,” Marter said in a statement. “We are, likewise, committed to this process and look forward to working with Mr. Robbins and his colleagues, and hope that the engagement will begin in short order.”
The Polis administration also is working quickly to put in place the new nine-member commission that will serve until a full-time board takes office by July 2020. Robbins expects to have the board members in place for the meeting in May.
The priority for the new board members is the development of new permanent rules to govern oil and gas drilling. The first set will address the agency’s new mission to regulate the industry rather than “foster” development. Other rules will deal with how to assess alternative locations for drilling; address cumulative impacts of operations; revise the existing regulations on flow lines and disclosure; and better define the relationship between state and local government on oil and gas issues.
These five areas of regulations are expected to be put in place by July 2020. Other rules about pipelines, orphan wells and financial standards for operators would come afterward.
“These are rulemakings in areas that we have not had authority before,” Robbins said. “We are a little bit starting from scratch in these areas.”
But Robbins, who helped draft the legislation, said it finally will address conflicts between oil and gas operators and a booming suburban population on the Front Range.
“Where it landed is that right sweet spot that will allow us to, at the commission level, implement these rules in a manner that is going to address the issues that led to this,” he said.