5:00am

Mon January 9, 2012
Environment

Drilling Bans Highlight Ambiguity in Colorado Law

In 2009, then Governor Bill Ritter pushed through sweeping changes to the state’s oil and gas regulations.  The goal was to better protect the environment and public health from drilling.

But they stopped short of clarifying how much authority a local government has to regulate drilling within its boundaries.  This has come to a head lately along the Colorado Front Range where the controversial practice of hydraulic fracturing is now occurring in and around densely populated neighborhoods.

Boom Times

A few years ago, when the housing market was still churning, Front Range towns like Commerce City embarked on a rapid expansion. Their boundaries sprawling north and east onto land deemed too dry for farming. 

Even today, sign after sign promises homes in the high one hundred thousands, as Jim Kummerow steers his sedan away from his quiet cul-de-sac, squinting in the sharp sun.

“I’m stopping right here because this is the Arsenal, and if you look, there’s our pump right there,” he says.

Kummerow says he was blindsided recently when an oil company showed up to re-frack a well that sits near his subdivision and the now-decommissioned Rocky Mountain Arsenal, a former dumping ground for chemical weapons. 

Oil drilling was something that happened long ago here, he says, before all the people came.

“I do understand that people want jobs and this is a place to get a job, but at what risk,” Kummerow says. “The rooftops over there, that one right there, is my house.”

Last month, after pressure from Kummerow and his neighbors, Commerce City passed a one-month time out on any new drilling or fracking.  Other nearby cities and counties have passed similar moratoriums, so that local zoning regulations can be overhauled. 

Conflicting Regulations

Depending on whom you ask, these are proactive moves to get in front of the new drilling boom, or they’re in direct contradiction with state law.

“We don’t believe that local governments have the authority to enact moratoriums,” said David Neslin, director of the Colorado Oil and Gas Conservation Commission.

As the state’s chief regulator of oil and gas drilling, Neslin says local governments should only have the purview to regulate things like traffic, dust or other local impacts.

“There is a comprehensive, well established, very rigorous regulatory program at the state level, with a lot of expertise and very experienced staff,” he said.

Neslin’s argument [pdf] is backed up by a series of legal memos recently sent from the Attorney General’s Office to Douglas and Arapahoe counties [pdf] – warning that proposed, new, local oil and gas regulations were duplicative and in some cases, in direct conflict with the Colorado Oil and Gas Conservation Act

“Clarity would certainly be helpful,” said Eugene Mei, city attorney for Longmont.

His city just passed a 120 day moratorium on all drilling.  While there’s no specific law or precedent for oil and gas drilling, Mei said the state’s supreme court has upheld that local governments can regulate land-use in the interest of public safety or other concerns.

“To have a major, ongoing, industrial process a 150 feet from somebody’s front door just seems to be a real conflict that needs to be addressed,” Mei said.

Gray Area

The courts may eventually have to intervene and clarify this ambiguity in the law. That’s what’s happening in New York right now.  The state and some local governments have enacted drilling moratoriums, but there’s a legal challenge to that authority, says Professor John Nolon of the Pace Law School in White Plains. 

“Everybody is watching everything that’s going on in the states where there’s more and more drilling because we need to get this framework of state, federal and local regulation under control and get it understood and put it in place,” Nolon said.

Oil and gas companies are drilling the natural gas-rich Marcellus shale in next door Pennsylvania but have no access to it yet in New York.  And for now at least in states like Colorado, companies may have to deal with a patchwork regulatory environment too, so long as local governments here continue to adopt their own regulations on top of the state’s.

This upsets people like Ed Ingve who work in the industry.

“It’s just government seeking a problem that doesn’t exist, at least in the areas that I operate,” said Ingve, who owns Aurora-based Renegade Oil and Gas Company.

His company operates several dozen wells, mostly in rural, eastern Colorado.

“I’m a small man shop,” Ingve said. “We’ve basically got three office employees and to try to learn these regulations, these hundreds of pages of regulations that you have to go through and file on all this stuff, often times can be exceedingly frustrating.”

Ingve said companies like his may decide to pick up and do business in other areas with more friendly rules and regulations.

Legislative Fix

It’s a not uncommon threat the industry has made in other times and other parts of Colorado. And it’s one that would suit Jim Kummerow in Commerce City just fine.

As he drives back toward his home, he says neighborhoods like this with homes and schools and 7-Elevens are too crowded to accommodate industrial activity, even in Commerce City – where oil refineries once outnumbered subdivisions.

“We are directly adjacent to Denver itself, we’ve got hundreds and hundreds of families in Commerce City,” Kummerow says. “There’s no reason to be doing this type of operation this close to a large population.”

People like Kummerow living amidst the drilling say the state legislature, instead of the courts, could easily come in and give local governments the authority to regulate drilling.  At least one lawmaker has already floated such a bill in the upcoming session.