From the Denver Business Journal

Colorado legislative Democrats who broadly have made oil and gas regulation a key goal for the 2019 session have begun to narrow their aims to two specific goals — changing the mission of the Colorado Oil and Gas Conservation Commission away from promoting the industry, and finding a still-undefined way to offer more authority over drilling to local governments.

House Speaker K.C. Becker and Senate Majority Leader Steve Fenberg — the Boulder Democrats who are leading the push for their chambers on this issue — both rejected outright in the past week the idea of imposing specific setbacks from structures or vulnerable areas on drilling rigs, and Becker in particular has said the once-floated proposal to put a moratorium on statewide drilling may not be an action the Legislature can take. Voters rejected 2,500-foot setbacks proposed by environmental activists as part of Proposition 112 on the November ballot.

Instead — and particularly in light of last month’s Colorado Supreme Court decision saying that the COGCC did not have to consider public health and safety above all other factors when considering applications for drilling permits under its current guidelines — the attention of Becker and Fenberg has focused on taking legislative steps to redirect the actions of the commission. That likely would involve two main changes: eliminating its now-stated goal of fostering energy extraction in this state and adding a clause to its rules saying that public health and safety should be a guiding factor in its decisions.

Becker said at a media briefing Monday that drafting a bill is going slowly because this is a very technical area that Democrats who control both chambers of the Legislature are exploring. But she and Fenberg, speaking to a similar press gathering late last week, both said that legislative leadership will not bring forward a bill delineating distance between wells and homes but will offer bigger-picture reform that reflects a desire by the voters who elected them to require public health and conservation be a priority as the oil and gas industry continues to operate in Colorado.

“Votes rejected setbacks, and the concern about that was a one-size-fits-all approach,” Becker said. “We want COGCC to not be in the business of promoting oil and gas but regulating it.”

Fenberg added that in talks he’s had with stakeholders ranging from environmental activists to energy-industry leaders to mineral-rights owners, he’s gotten a sense that there not only is ground for everyone to come to a compromise but that there is a yearning by some business executives that they would like this to happen in order to eliminate the uncertainty that comes with potential ballot attacks each year there is no legislative cohesion.

“I think the industry wants reform. Their stocks are going down, and people don’t know if they’re going to have a job in a year because they don’t know what regulations will look like,” Fenberg said. “Everyone agrees we need to put a whole lot more emphasis on health and safety. I think most reasonable people would agree that (promoting the industry) is not the role of state government.”

Dan Haley, president/CEO of the Colorado Oil & Gas Association, said that he understands the objective legislative leadership has in mind and that he and other industry leaders have had some initial conversations with officials in that regard. But he added that his worry centers around the still-ambiguous definition of “local control” that is swirling in legislative discussions.

Local governments already have the ability to establish memoranda of agreement with drilling companies regarding their operations within their boundaries, Haley said. And many of those communities will say they already have the power they need to build local regulatory frameworks that work, he added.

Becker and others have talked about offering them more opportunity to regulate conditions from noise to odor to traffic, but Becker said at a Denver Metro Chamber of Commerce preview event before the session began that she also didn’t want to turn over complete regulatory power to small governments that don’t have the bandwidth to undertake full-scale oversight of the industry. In past years, Democrats have run unsuccessful bills that would have done things like allow city and county governments to use zoning to have greater oversight over drilling pads.

Oil and gas leaders have expressed concern that handing over too much regulatory authority to more than 100 local governments could create a patchwork of rules that would make Colorado highly unattractive to companies that want to invest in the state. And if that were to happen, more than 232,000 jobs now dependent on the sector could be in jeopardy, shaking a state where the industry has a $32 billion economic impact.

“Production and protection can most certainly go hand-in-hand,” Haley said in an email to the Denver Business Journal. But he also added: “The data demonstrates the high level of safety standards that we follow, and Colorado-based oil and natural gas emissions have been dropping over the past seven years.”

Tracee Bentley, executive director of the Colorado Petroleum Council, voiced a similar sentiment even as she, like Haley, noted that she hasn’t seen a specific bill regarding the COGCC or local regulation yet.

“We are optimistic that the bill being drafted will embody the diversity of voices in the discussion on Colorado’s energy future,” said Bentley, who served as a senior adviser on energy and agriculture for former Gov. John Hickenlooper, a Democrat. “We are excited about the future of our innovative line of work and its ability to provide unprecedented opportunity to Coloradans from every walk of life.”

While Fenberg and Becker said they want to craft a bill that will end the years of debate over the state’s regulation of the energy — as well as one that is “defensible,” in Becker’s words — there remains some question over whether the solution will bill acceptable to the most ardent fracking opponents, including those who wrote Proposition 112.

A memo from grassroots group 350 Colorado that has circulated around the Capitol said its members would like to see 2,000-foot setbacks from homes, as well as a moratorium on all drilling until a health analysis is done on fracking and regulations are in place to promote health and safety above all other considerations.



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