From the Denver Business Journal

A drilling agreement reached this month between Extraction Oil and Gas and the city of Broomfield details plans for 84 new oil and gas wells.

It took the Denver-based company more than two years to complete, but the question remains: can the unprecedented amount of mitigation the company committed to mollify neighbors make fracking fit the suburbs?

Extraction (Nasdaq: XOG) will deploy quiet electric drilling rigs, then silent fracking equipment, build pipelines for both oil pumped and water used at the wells to eliminate the need for trucks, and then the company will pay for years of emissions monitoring contracted by the city.

The measures are far beyond what’s typically required under state law and what’s normally conceded to municipal or county regulators by companies operating in Colorado’s booming Denver-Julesburg Basin.

“Never before in one development plan have we committed all of those,” said Eric Jacobsen, Extraction’s senior vice president for operations. “This is the best-in-class plan found anywhere in the U.S., and we think it’s a model to go forward with.”

The staff of the Broomfield municipal government approved the plan Sept. 10.

Extraction plans to start developing the first of seven well pads, off the interchange of Interstate 25 and Northwest Parkway, late this year.

Nearly 1,000 homeowners in Broomfield’s Broadlands and Wildgrass neighborhoods own the oil and mineral rights under their homes, many of whom would rather the oil and gas stay in the ground and nearby drilling not happen. They’re suing to stop the drilling plan.

Broomfield voters in November amended the city’s charter to require health and safety concerns be assured before drilling is allowed in the city. Extraction’s drilling plan was approved just before the vote and is excluded from the tighter scrutiny.

“I think, overall, the city has given up a tremendous amount to Extraction,” said Jean Lim, a Wildgrass resident and co-founder of groups fighting the drilling plan. “It seems like whatever leverage Broomfield might have had has not been used effectively.”

Despite the continued resistance, Extraction views the process with Broomfield as a success.

“This is the Cadillac of development plans,” Brian Cain, an Extraction spokesman, told Denver Business Journal.

As part of its plan, Extraction agreed to get a $100 million environmental insurance policy that would pay for recovering from an accident. That is several times more than what the state requires and something other local jurisdictions haven’t sought.

The company predicts the wells will generate at least $60 million in property tax and other local revenue. Broomfield plans to use some of that for a $1.8 million, three-year air-quality monitoring program near the wells.

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