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Gov. Polis signs Democrats’ sweeping oil and gas bill into law, marking major shift in regulatory authority over drilling

Senate Bill 181 faced immense industry and Republican pushback as it cleared the Colorado legislature. Now begins a rulemaking process stemming from the measure that will mean further impacts on the industry.

Gov. Jared Polis speaks before signing Senate Bill 181 on Tuesday, April 16, 2019, in his office at the Colorado Capitol. Looking on is Erin Martinez, right, whose husband and brother were killed when their Firestone home exploded in 2017. On the left is Martinez' daughter.(Jesse Paul, The Colorado Sun)
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Gov. Jared Polis on Tuesday signed into law a sweeping oil and gas regulation bill that faced stiff opposition from Republicans and the industry as it made its way through the Colorado legislature.

“Today, with the signing of this bill, it is our hope that the oil and gas wars that have enveloped our state are over,” Polis said before signing Senate Bill 181 in his Capitol office. “Let me be clear: This bill gives the industry and residents certainty and comfort and Colorado will be the better for it.”

He was flanked by activists and lawmakers who pushed for the legislation. Notably, several members of the oil and gas industry were also present for the bill signing, including representatives from Extraction Oil & Gas, Evergreen Natural Resources and SRC Energy.

The new law is a major shift in regulatory authority over drilling in Colorado, directing state officials to focus primarily on health and safety when approving new oil and gas permits. Before, regulators were mandated to foster development of the $32 billion industry.

Local governments will also have significantly more power to decide where drilling can happen.

MORE: Colorado oil and gas overhaul tips power toward local government. How that power is used will vary widely.

“This bill is good for Colorado,” Polis said. “This bill is good for the energy industry. This bill is good for workers. This bill is good for the environment. This bill is good for residents who live in oil and gas areas.”

The bill’s signing is a punctuation mark on the multi-year battle between the oil and gas industry and advocates that reached a high point last year with the failure of a ballot measure seeking to increase the setback of drilling sites from development to 2,500 feet.

However, increased industry regulation was a given when Democrats regained control of state government in November’s elections.

“While (the law) does not address all of the concerns and threats associated with industrial fracking activity, it is a desperately needed tipping back of enormously unbalanced scales in favor of people and environment,” Anne Lee Foster, a spokeswoman for Colorado Rising, the activist group behind the attempted setback increase, said in a written statement.

Foster called the legislation, “the most substantial shift we have seen in decades and puts communities on much better footing when confronted with industrial oil and gas in their backyards.”

Oil and gas operators have warned that Senate Bill 181 will cost Coloradans jobs and potentially send the state into a recession, but they did win a number of concessions before it was finalized by state lawmakers.

Those included provisions to prevent overly restrictive setbacks, delays or de facto bans on the industry, and a mandate that the Colorado Oil and Gas Conservation Commission be remade with full-time members appointed by the governor.

The Colorado Petroleum Council said Tuesday that it was thankful Democrats heard their concerns and worked with them. “While Senate Bill 181 remains deeply flawed, Gov. Polis and state officials have pledged to work with industry to create a reasonable regulatory framework that works for all Coloradans, and we are committed to that process,” spokesman Ben Marter said in a written statement.

In all, there were 33 amendments made to the bill during some 30 hours of debate before it passed.

Senate Majority Leader Steve Fenberg, a Boulder Democrat, before the signing of Senate Bill 181 on Tuesday, April 16, 2019. (Jesse Paul, The Colorado Sun)

“It’s hard to recall a bill that’s had that much debate, that much discussion, that much amending along the way,” said Senate Majority Leader Steve Fenberg, a Boulder Democrat and one of the bill’s prime sponsors.

House Speaker KC Becker, a fellow Boulder Democrat and lead sponsor of the measure, said the legislation offers solid ground for oil and gas operators and for people who live near drilling.

“It gives the industry a reasonable and responsible path forward,” she said. “This is a path forward for all of us.”

Still, Polis noted that conflicts are inevitable.

“Even with this bill passing, there will no doubt be skirmishes around particular projects in particular areas,” he said.

Extraction Oil & Gas drilling rig on the Coyote Trails pad is visible behind houses along Tundra Circle in Erie on Thursday, April 4, 2019. (Andy Colwell, Special to the Colorado Sun)

Now that Senate Bill 181 is law, state regulators will also have to begin a rulemaking process to meet the mandates of the measure. That will mean more industry impacts, although the Polis’ administration has vowed to move quickly to avoid a burdensome process for operators.

“I’m trying to provide a sense of certainty and predictability for industry,” Jeff Robbins, who leads the COGCC, told The Sun earlier this month.

Also at the bill signing Tuesday was Erin Martinez, whose brother, Joey, and husband, Mark, were killed when her home in Firestone exploded on April 17, 2017, because of a severed flow line from a nearby gas well. She was one of the main voices pushing for the new regulations.

MORE: Colorado lawmakers are using the deadly Firestone explosion as a fulcrum for change — just as Erin Martinez wanted

Martinez attended the bill signing with her son, Nathan, and daughter, Jaelynn. She has said her activism around the legislation is to make sure no other family goes through what hers did.

“We’re just overwhelmed right now,” Erin Martinez said. “It feels like it’s a great way to honor Mark and Joey. The two-year anniversary is tomorrow so it’s really fitting that we got this done before that came.”

Jaelynn Martinez, left, shows her mom, Erin, a pen Gov. Jared Polis used moments earlier to sign Senate Bill 181 on Tuesday, April, 16, 2019. Erin Martinez’ husband, Mark, and brother, Joey, were killed in an April 17, 2017 home explosion in Firestone caused by a severed flow line from a nearby gas well. (Jesse Paul, The Colorado Sun)

No Republican voted for the measure as it made its way through the Colorado legislature. A few Democrats in the House from vulnerable districts also voted “no” on the bill.

Political fallout for Democrats from the bill is likely to continue. State Rep. Rochelle Galindo of oil-and-gas-heavy Weld County is facing a recall effort in response to her vote in favor of the legislation.

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