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COGCC passes rules that require extra considerations for “large scale” oil and gas projects

The Colorado Oil and Gas Conservation Commission (COGCC) approved rules yesterday recommended by a task force organized by Colorado Governor John Hickenlooper. The final rules came after more than a year of talks and negotiations between representatives of local governments, community members and Colorado’s oil and gas industry.

The taskforce was created in September 2014 as a compromise between pro- and anti-hydrocarbon development groups who each removed initiatives that were on the November ballot.

The new rules approved by COGCC set out guidelines for when and how local governments must be consulted in regards to oil and gas development. At the heart of this issue was the definition of “large scale” projects.

Based on the rules set forth by COGCC, decided in a 5-4 vote, according to Denver Post, the commission decided any site with 4,000 barrels of new or existing storage, not including water, or with eight new wells, will qualify as “large scale.” If a large scale project is in an urban mitigation area, defined as within 1,000 feet of 22 or more homes, or a large facility such as a school or hospital, greater local control can be exercised.

Once that threshold has been tripped, local governments get a say on where well pads can be sited, and nearby residents gain more stringent protections regarding noise, emissions, fire control and other issues.

Most parties unsatisfied

While the compromises reached Monday in Denver were many months in the making, few stakeholders walked away feeling satisfied.

“We’re disappointed that the COGCC chose to go beyond the original task force recommendations, especially in these economic times with oil prices the way that they are and jobs suffering,” Colorado Petroleum Council executive director Tracee Bentley said.

“But we do very much appreciate the process that COGCC staff ran. It was a very thorough and very well-vetted process,” she said. “We’ll continue like we always have—to work with local governments and stakeholders.”

While industry groups had hoped COGCC would raise the limits on large scale projects to 12 wells or 9,600 barrels of storage, the pro-local control consortium Allied Local Governments – made up of many Colorado counties, including Boulder, Broomfield and La Plata, among others – hoped the limit would be set lower.

La Plata County Commissioner Gwen Lachelt, a co-chair on the governor’s task force, said the compromise left counties with a limited voice, reports Durango Herald. “It doesn’t require companies to provide counties with the same information they will be required to provide municipalities,” said Lachelt. “This is an erosion of local control.”

Further ballot proposals coming in 2016

More ballot proposals are on the way as well, despite the end of the rule making. Anti-fracing groups have proposed a number of ballot proposals for this year, including some proposed amendments that would outright ban on the use of hydraulic fracturing and some that would set larger setbacks.

“It’s not just the wells or the drilling, or the noise and lights and traffic 24 hours a day,” said Shawndra Barry, with the newly-formed League of Oil and Gas Impacted Coloradans. “It is being disenfranchised with no due process.”

Political experts who spoke to Oil & Gas 360® about this topic said that a presidential election year changes everything. Ballot proposals will live or die according to how they match the vote-getting strategies of the candidates running for president. If a presidential candidate determines that aligning with a certain initiative would likely cost him or her votes in a state, the proposal will be punted away from the ballot until another election cycle.

“Ultimately it’s whoever the Republican and Democrat nominees are. They decide which initiatives are supported based on helping their election. Is a fracing ban going to be a net positive or a net negative for the candidate?”

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