When It Comes To Colorado's Newly Proposed Oil & Gas Rules, Erie Is Ahead Of The Curve
The Colorado Oil and Gas Conservation Commission, the state's regulator, is proposing a new set of rules that would give local governments more say over drilling operations. The draft rules require engagement with local officials before applying for a large-site drilling permit from the state.
Some towns in Colorado are already ahead of the state on this. In the early 2000s, the town of Erie had just about 12,000 residents. But the open fields and farmlands of this Front Range community have been converting to housing developments fast. Now 22,000 call Erie home and that number is expected to triple by 2050. Scattered across that urbanizing landscape are oil production sites and places where more drilling is planned.
Up until recently, town trustee Jennifer Carroll said, there wasn't much Erie could do to control new drilling.
"The only thing we would regulate is fence color, what material the fence was and then the road going from their site to our main roads has to be paved for a certain amount and gravel," said Carroll.
Erie officials found a way to change that, on their own.
First, a couple of years ago, they created a memorandum of understanding [.pdf] increasing setbacks with the main driller working there, which at the time was Encana Oil and Gas. After problems with noise and vibrations at one site in town, the town and operator negotiated another agreement, which was approved in August 2015.
"When we'd get into the details of here's how we want you to solve the problem, that would kind of stir things up and make them more standoffish but when we stepped back and said, 'here's the problem our residents see and here's what we want to fix, what do you suggest?'" said Carrol.
Now that Encana has announced the sale of their Denver Julesburg Basin assets in Colorado, the agreement struck with Erie changes hands as well. "The buyer intends to honor the Operator Agreement we signed with the town of Erie," Encana said in a statement. "We're pleased they intend to do so, as we believe the agreement is beneficial to all stakeholders."
What Erie got in that Operator Agreement [.pdf] is a five-year drilling plan, mapping out eight future drilling sites, along with a requirement that the company give 90 days notice to the town and public before an application is submitted to the state. Additionally, they got decreased noise limits, more routine leak monitoring and 1000-foot setbacks from buildings, all of which go beyond current state regulations.
"So I think we in some shape or form got everything we were looking for," says Carroll.
Matt Lepore, director of the Colorado Oil and Gas Conservation Commission, said his group supports those kinds of contractual agreements between operators and local governments. The commission's new draft rules don't go into the same level of specifics that Erie negotiated, but they do say local officials will have input into the location of large well sites and the best practices used at those sites - if they want it.
"Local governments feel that operators tend to come to COGCC, get a permit and then go to local governments and say, 'see we have a permit so you don't have as much say-so as you might want to have,'" Lepore said. "We're trying to change that calculus a little bit."
The state's new rules on local involvement, as written, will only apply to large operations within urban areas. The COGCC will take comments on the proposed rules during a series of stakeholder meetings, the final rules are expected in November 2015.
"These rules are going to be like any of our rules – a process of a public, open process and in my experience nobody gets everything they want," Lepore said.
The new draft rules [.pdf] come from two recommendations born out of Gov. John Hickenlooper's Oil and Gas Task Force. Recommendation 17 seeks to define what a large urban mitigation area facility is and best practices in regard to siting and notification. Recommendation 20 concerns operators registering with and communicating with local governments.
Inside Energy is a public media collaboration, based in Colorado, Wyoming and North Dakota, focusing on the energy industry and its impacts.