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Senate Bill 181 Triggered A Wave Of Oil And Gas Moratoriums. Here's What That Means

Oil well
Matt Bloom
An oil well near the border of Boulder and Weld counties.

Tensions between oil and gas companies and communities along the Front Range are heating up again. So far this year, at least eight cities and counties have temporarily stopped processing new drilling permits in the wake of a new state law. The latest is Boulder County, where commissioners will hear public testimony on Tuesday on a new nine-month moratorium.

KUNC's Matt Bloom spoke with Kyra Buckley to break down what the influx of moratoriums means.

KYRA BUCKLEY: Let's start with what's happening in Boulder County. This is an area that's had its share of issues over the years regarding oil and gas development. What is the purpose of today's hearing?

MATT BLOOM: Well, it's more of a formality than anything else. It comes about two weeks after commissioners passed an emergency moratorium, which paused all applications from oil and gas companies wanting to drill in Boulder County. They need to hold a public comment session before they can officially pass it. But, ultimately, it means that after today the county won't consider any new projects until at least March of next year.

BUCKLEY: Boulder already has some of the tightest local regulations on oil and gas in the state — so why is this happening now?

BLOOM: The main reason for all of the moratoriums we are seeing is Senate Bill 181, which lawmakers passed back in April.

BUCKLEY: Just to remind everyone, this law, which Gov. Jared Polis signed, puts more regulatory power into the hands of local governments.

BLOOM: Right. Elise Jones is chair of the Boulder County commissioners. She says passage of 181 opened the door for the three member board to rewrite their regulations to be even stricter than they already are.

"And that's everything from providing a better authority over citing, fines for spills and leaks, requiring that the costs of all of this get covered by industry and ensuring that any drilling is as far away from people and children as possible."

And here is where the tension comes back into play. Last month, the county received an application from Crestone Peak Resources to drill 140 new wells. That's a huge development considering Boulder County doesn't normally see anywhere near that total number of permits in an average year.

BUCKLEY: And by our count, seven other communities have joined Boulder County in passing similar moratoriums since 181 passed, including Adams County, Broomfield, Berthoud, Superior. What does Crestone have to say about the moratorium?

BLOOM: First off, they are fairly normal. Local governments frequently use them when they're writing new regulations for all sorts of industries. But what we are seeing now, aimed specifically at oil and gas is unprecedented. And it's exactly what the industry feared would happen. Jason Oates is with Crestone Peak Resources. The company has two applications that are being held up, the big on in Boulder County and another in Broomfield. He says it's costing them a lot of money.

"It's our business model. I mean, we're an oil and gas exploration and production company. We bought those minerals from another company with the intent of developing them. So, it's more of a legal position and a principled position of we have property rights to those minerals and we feel like that they, you know, if done in the way we have proposed doing them, we should be given the right to do so."

Along with Oates, I've also been talking to other sources in the industry — who all say there are hundreds of permits sitting in local government offices around the state awaiting approval right now. The companies don't really know what to do other than wait it out. And they feel betrayed.

"We were promised by, you know, Gov. Polis and others that a moratorium wouldn't be used. But we are seeing it used now and it feels more like a delay tactic in a way of just stopping development."

BLOOM: It's also important to note that moratoriums don't stop any of the thousands of active wells in Colorado from operating. What we're talking about is the next wave of oil and gas projects that are currently in the planning stages.

BUCKLEY: You'll be at the commissioners meeting in Boulder. Based on your previous reporting on SB 181, and the oil and gas industry, what do you expect will happen?

BLOOM: There will likely be praise from Boulder County residents, since this is kind of the epicenter of the fight over local control on oil and gas development. It's also an uncertain time for people working in the industry in Colorado. And if more areas start considering moratoriums, that could be the start of more litigation or continued protest. We'll have to see what the response will be.

BUCKLEY: That's KUNC's Matt Bloom. He's been looking into the growing number of oil and gas moratoriums following passage of Senate Bill 181. Thanks, Matt.

BLOOM: You're welcome.

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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