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New Limits On Drilling Reignite Familiar Tensions In Colorado’s Oilfield

Susie Magnuson stands near an oil and gas facility on her farm in Eaton. The facility sits roughly 500 ft. away from her family's home.
Matt Bloom/KUNC
Susie Magnuson stands near an oil and gas facility on her farm in Eaton. The facility sits roughly 500 ft. away from her family's home.

When an oil company approached Susie Magnuson to drill on her family’s 300-acre farm in Eaton in 2012, she jumped at the chance. Selling her mineral rights opened up a new source of income that helped the farm stay afloat and even expand.

There was interest to drill even more wells until this summer, she said, when Colorado unveiled new rules that would double the distance oil and gas wells need to be from homes, schools and other buildings where people spend their time.

The proposed distance—2,000 ft.—would be the largest buffer, or “setback,” in the country, beating out other oil-producing states like California, Texas and Pennsylvania. Magnuson worries it would also mean any new wells on her property would have to go in the middle of her cornfield.

“And we couldn’t do that because we farm,” Magnuson said. “We absolutely could not do that.”

For years, setbacks have been a polarizing issue in Northern Colorado, where the majority of the state’s oil and gas drilling takes place. While viewed by some as a valuable safety tool, the distance requirements are also seen as an impediment to energy development by industry and those who profit from it.

Most efforts to significantly raise the statewide setback distance in the past have failed. In 2018, voters rejected a ballot measure aiming to create a statewide half-mile setback after a well-funded industry campaign warned it would cause devastating job loss.

This fall, a setback increase is on the table again as the Polis administration works to pass a wave of new drilling restrictions aimed at protecting public health and safety. The changes stem from the landmark oil and gas legislation, Senate Bill 181, which Colorado lawmakers passed last year.

Under the new rule, which is still in draft form, companies would be banned from drilling any closer than the 2,000 ft. setback distance unless they qualify for one of four exceptions designed by the state’s oil regulator, the Colorado Oil and Gas Conservation Commission:

  • The well location is already within an approved comprehensive drilling plan.
  • Specific equipment, including wells, tanks, separation equipment or compressors proposed are located more than 2,000 ft. from buildings.
  • The commission finds after a hearing that companies have taken “substantially equivalent” protections for public health and safety.
  • A property owner or tenants sign a special waiver agreeing to have wells drilled closer than 2,000 ft.

Jeff Robbins, the COGCC’s chair, said the last rule would potentially apply to families like Susie Magnuson’s that want to have drilling closer to their homes.

“These off-ramps should be used and should result in snowflakes that are special that will get approval,” Robbins said

A drill rig sits behind a home in Greeley in September. Colorado's new setback rule would require all drilling to take place at least 2,000 ft. away from the places people live.
Matt Bloom/KUNC
A drill rig sits behind a home in Greeley in September. Colorado's new setback rule would require all drilling to take place at least 2,000 ft. away from the places people live.

It’s unclear how big of an impact the new setback, if approved, would have on future drilling projects in places with growing populations, like Weld and Larimer counties. Past studiescommissioned by oil and gas companies have shown that large swaths of land would be cut off from drilling activity if the state passes a larger setback distance.

The industry meanwhile is in the midst of one of its worst oil price slumps in decades due to the coronavirus pandemic and weak demand across the globe. The bust has forced many companies to scale back operations, layoff workers and in extreme cases declare bankruptcy.

Lynn Granger, executive director of the American Petroleum Institute’s Colorado chapter, said the 2,000 ft. setback, which is roughly equivalent to 12 football fields, would make it “that much harder” for the state’s industry to recover and continue growing.

“We don’t have certainty or clarity that this industry needs,” Granger said.

Adding another layer to the debate is the lack of scientific consensus on safe drilling distances.

Several studies have looked at potential links between oil and gas operations and negative health impacts on people, but none have gone as far as suggesting what a “safe” setback distance is.

For example, a study published by the Colorado Department of Public Health and Environment in October 2019 found exposure to some chemicals used during the drilling process could cause short-term headaches, dizziness and respiratory irritation as far as 2,000 ft. away.

Others have found that the drilling process creates notably higher levels of noise, smells and traffic in surrounding communities.

The lack of a large body of science leaves policymakers with the difficult decision of deciding what constitutes a safe setback, said Dr. Lisa McKenzie, a public health researcher at the University of Colorado Anschutz who specializes in oil and gas issues.

“It’s still fairly early for research science,” McKenzie said. “Research is slower than regulation sometimes.”

Still, some residents in communities with a lot of oil and gas drilling say the setback increase is long overdue. In Anthem Ranch, an upscale 55-plus community in Broomfield, residents have filed nearly 500 health complaints about a nearby oil and gas project.

When the drilling started more than a year ago, Mark Koenig said he started feeling his house vibrate. For a period of several months, a noise that sounded like a “Caterpillar truck” would occasionally rattle through his bedroom as he and his wife tried to sleep.

“I’m not against oil and gas drilling,” Koenig said. “I’m just against oil and gas drilling near residential communities.”

Judy Kelly, another Anthem Ranch resident, said she worries the new regulations contain loopholes that may allow oil and gas companies to continue to obtain permits within the 2,000 ft. setback distance.

She’s heard from neighbors that even more projects are planned around her community. If they’re approved, she and her husband may decide to move, Kelly said.

“I don’t think we could handle it,” she said. “Too scary.”

Back at her farm in Eaton, Susie Magnuson said the new setback favors people who live in more urban communities along the Front Range.

The wells on her property are less than 300 ft. from a swing set her grandchildren play on. Other than the increase in truck traffic, she’s never felt unsafe.

“What happens in rural Weld County is very different from what happens in Longmont or Denver or even Greeley,” Magnuson said. “I understand if they want to move facilities back from kids’ schools or residential areas, but it’s not a one-size-fits-all.”

Magnuson said she worries it could also lead to a wave of lawsuits from private property owners if more flexibility isn’t worked into the rules.

As for a final vote on the new, 2,000 ft. setback, that’s expected to come in early November. If approved, the changes would go into effect at the start of 2021.

Corrected: October 6, 2020 at 11:28 AM MDT
A previous version of this story oversimplified exceptions for the state’s new setback rule. The story has been updated with more details about the process. KUNC regrets this error.
I cover a wide range of issues within Colorado’s dynamic economy including energy, labor, housing, beer, marijuana, elections and other general assignment stories.
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