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Politics and Government

Colorado gave local governments more power to regulate oil and gas. And some are using it.

The legislature’s 2019 overhaul of drilling rules through Senate Bill 181 empowered some cities and counties to prioritize safety. But other energy-friendly areas have held back on flexing their new muscles.

An oil and gas drilling rig towers above a Weld County neighborhood on June 5, 2020. (Andy Colwell, Special to The Colorado Sun)
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Empowered by a new state law and regulations, towns, cities and counties across the Front Range are flexing their muscle and moving to regulate oil and gas operations that come to town.

Two years ago this month, sweeping legislation was signed into law reorienting Colorado’s approach to regulating oil and gas development. That in turn led to a complete overhaul of the state’s drilling rules. Those new regulations went into effect Jan. 15.

The law, Senate Bill 181, and the new rules have touched off a cascade of action as more than a dozen local governments moved to update and strengthen local controls, something they had been blocked from doing before. 

“Some governments moved right after SB 181 was passed,” said Andrew Forkes-Gudmundson, deputy director of the League of Oil and Gas Impacted Coloradans, which represent grassroots community groups.

“But others waited till the regulations were passed,” he said. “They heard all the testimony on health impacts and siting … and now they feel more educated, more confident and are moving forward.”

TODAY’S UNDERWRITER

Local governments from Commerce City to Fort Collins, covering a huge swath of oil country, are set to adopt local drilling ordinances.

“Local governments are implementing and writing new regulations, and for the most part they are strengthening those regulations,” said Kevin Bommer, executive director of the Colorado Municipal League. 

Until Senate Bill 181, local governments were blocked from enacting comprehensive oil and gas rules as the state asserted primacy over regulating the industry, with the aim of promoting oil and gas development.

The new law changed that, making the goal of state regulation the protection of public health, safety and welfare, as well as wildlife and the environment. It also clearly said local governments have the right to oversee oil and gas developments.

“It was a sea change in concept, a total reset of the way oil and gas operates in Colorado,” said KC Becker, the former Speaker of the House of Representatives and a sponsor of the bill.

The law also directed the Colorado Oil and Gas Conservation Commission, which oversees the industry, to rewrite its regulations to conform with its new mission.

One of COGGC’s new rules requires an operator to seek local approval before submitting a drilling permit application to the state.

To understand the difference between the before and after of Senate Bill 181, consider the stories of Thornton and Boulder County.

In 2017, Thornton tried to establish a 750-foot setback of wells from homes (the state buffer was then 500 feet) and to set standards for flow lines – the pipes that carry product away from wells.

The Colorado Oil and Gas Association and the API-Colorado, the state’s two major industry trade groups, sued Thornton, and a district court judge threw out the setback and flowline rules.

In December, Boulder County adopted a new oil and gas ordinance with a 2,500-foot setback, 500 feet more than the state’s new standard, and a requirement that abandoned flowlines must be dug up and removed. Thanks to Senate Bill 181, there aren’t ready grounds for a lawsuit by the industry.

But when Boulder County imposed a drilling moratorium in 2017, it was sued by the state. 

On March 16, Larimer County issued a 30-day moratorium on new oil and gas activity in the county, while it works on new rules. While API-Colorado issued a statement saying it was “gravely concerned and taken aback” by the decision, there was no threat of a lawsuit.

“Senate Bill 181 has made a complete and total difference,” Forkes-Gudmundson said. “Local governments are now independent and coequal with the state.”

The new state regulations have even prompted some local governments — such as Adams County — that had already adopted regulations to go back and revise them.

“I am thrilled with what the state is doing,” Adams County Commissioner Eva Henry said. “We are going to be sure our regulations match the state.”

Adams County adopted a comprehensive oil and gas ordinance in January 2020 and the county commission is set to review the rules in light of the new regulations, Henry said.

The new state regulations, Becker said,  should be seen by communities as “a floor not a ceiling” to regulating oil and gas activity.

Broomfield and Commerce City already have updated regulations ready for city council approval. The Broomfield rules would ban oil and gas development in residential neighborhoods, although drillers using horizontal wells and fracking can still reach under those neighborhoods to pull out oil and gas.

Commerce City’s proposal requires oil and gas activity not to have “an undue impact” on public health and safety during any phase of operations.

Another House co-sponsor of the bill, Louisville attorney Mike Foote, said while he feels the law is off to a good start, he’s withholding judgment about the ultimate balance of power between communities and industry. 

“So far, there’s been a big difference in tone, and community and environmental groups now have a fighting chance in front of the commission,” Foote said. “It is still to be determined whether the new tone results in a noticeable change of practices, particularly regarding permitting.”

Resigned to the power shift sanctioned by lawmakers, COGA appears to have accepted the reality of widespread neighborhood opposition to close-in drilling in most communities. 

“There should be an area we can find some common ground; people should always be concerned when you are building anything near them; they will want to understand what you are doing and why you are doing it,” COGA CEO Dan Haley said. “That’s something our industry really didn’t do a great job of for a long time; I think we’ve improved greatly over the last five to 10 years.”

Some of Colorado’s more oil-friendly counties, such as Weld and Garfield counties, have made the point that local control can cut both ways. “It’s important to point out that the communities who produce the vast majority of oil and gas have historically been supportive,” COGA’s Haley said.

While most local initiatives have sought to stiffen rules, Weld County, Colorado’s biggest oil producer, adopted a new code in 2019 and created an Oil and Gas Energy Department – a one-stop shop – to streamline the permitting process.

“We are trying to make the code easier to read and for operators to know how the process through Weld County flows,” said Jason Maxey, the department’s director. Garfield County, rich in natural gas and outstanding permits, is also drawing up its own rules. 

The new state regulations, however, aren’t a panacea for all communities, said Micah Parkin, executive director of the environmental group 350 Colorado. In the 12 months before the new regulations went into effect, nearly 1,600 drilling permits, grandfathered from the new rules, were approved by the COGCC.

Between November and Jan. 15, 635 permits — mostly in Weld and Garfield  counties — were issued, according to COGCC data.

“A massive permitting doesn’t build confidence,” Parkin said. “There are still communities that feel left behind and don’t feel much has changed since the passage of 181.”

Local governments that enacted ordinances in response to the drilling boom between 2010 and 2017, but before Senate Bill 181

City of Longmont

City of Thornton

City of Brighton

Local Governments that have enacted or updated their oil and gas regulations after Senate Bill 181

Boulder County

Town of Erie

Weld County

Town of Timnath

Town of Superior

Local governments in the process of adopting new rules, revising existing regulations or considering updates:

City and County of Broomfield

Adams County

Commerce City

City of Aurora

City of Fort Collins

City of Dacono

Local governments with drilling moratoriums while working on regulations, or in early stages of deciding whether to adopt new local rules.

Larimer County

City of Lafayette

Town of Berthoud

City of Loveland

An Extraction Oil & Gas oil drilling rig in operation on the Livingston pad on the west side of the Anthem neighborhood in Broomfield on Aug. 2, 2019. (Doug Conarroe, The Colorado Sun)

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