From the Denver Business Journal


Some sections of SRC Energy’s Comprehensive Drilling Plan gain approval; PetroShare settlement for year-late integrity test unanimously rejected by commission

Anti-fracking activists and neighborhood residents urged Colorado’s oil regulatory agency Tuesday to stop new well drilling while new rules prioritizing public health and environmental protection are put in place.

The appeals to stop drilling dominated the two-hour public comment of the Colorado Oil and Gas Conservation Commission meeting Tuesday, similar to the start of several commission meetings in recent months.

What’s changed since those meetings is Colorado law, and the commissioners on the COGCC.

Sweeping oil and gas reforms passed by the Democratic majority in the state Legislature April 3 prioritize public health and environmental protection is state law for the first time. Activists wanted the COGCC to put that into action right away at the meeting, where five of the seven governor-appointed commissioners had just been sworn in and taken their seats.

With Senate Bill 181 in place, the COGCC shouldn’t permit new wells until they’re proven to be safe for people and the climate, argued Gina Hardin, president of 350 Colorado, an environmental group.

“We cannot simultaneously continue to drill new wells and avoid climate catastrophe,” said Hardin, whose group was a primary backer the Proposition 112 ballot question that sought to limit drilling.

Others from Thornton, Commerce City and elsewhere in the northern metro area testified to asthma attacks and headaches that they blamed on nearby well-drilling.

Some people blasted the COGCC for seeming unresponsive to months of public pleas to stop drilling despite testimony about problems, leaks and the 2017 fatal home explosion in Firestone.

Some who work in oil and gas defended the industry, saying no one they work with wants to harm anyone or the environment, and they work diligently to make oil and gas production as safe as possible.

Small companies in the industry wouldn’t survive if the COGCC stopped issuing drilling permits for a couple months or longer, said Emily Kincaid, a co-founder of Elevate Energy, a 50-employee oil and gas marketing company in Windsor.

“Everything we’ve put into this would go away,” she told the commissioners, choking up as she spoke. “We’d have to lay off every single one of our people.”

The COGCC will continue to review drilling permits for new wells.

Scrutiny of drilling permit applications will be tighter under administrative rules put in place by Jeff Robbins, executive director of the COGCC, meant to put the principals of the state’s new law into action immediately.

He created the 16-point criteria — most of them calling for closer looks at well-drilling applications for sites close to homes, city and county boundaries, water sources or wildlife — to make public health and environmental protection foremost while the COGCC commissioners create regulations over the next 18 months that implement the state’s new law.

Anne Lee Foster, communication director of anti-fracking group Colorado Rising, argued Tuesday that Robbins’ criteria isn’t living up to the new law.

“Until the commission can prove that the criteria objectively and quantitatively protects health and safety, the commission is not acting in accordance with the law,” Foster said.

Most of the COGCC’s day-long meeting involved presentations to the commissioners about agency processes work and a closed-door session updating them on lawsuits against or involving the COGCC.

The commissioners didn’t vote on any drilling permit applications, because none were on the docket Tuesday.

The COGCC approved some preliminary steps of a 23,500-acre comprehensive drilling plan for Denver-based SRC Energy Inc. (NYSE AMEX: SRCI), an oil and gas company that owns 87% of working interest in the drilling area’s land south of Greeley.

The approval freezes drilling permit applications in SRC Energy’s plan area by any company, giving the firm more time to work on planning, community input and mitigation for the hundreds oil and gas wells it will apply to drill there.

Tuesday’s last votes, on settlements between companies and the COGCC over rule violations and fines, could hint at the new commissioners’ priorities.

They discussed whether three of the five negotiated settlements handled by the COGCC staff were strict enough. They approved all but one of the settlements.

The commissioners unanimously rejected a negotiated settlement of a 2018 violation enforcement. PetroShare Corp. reached a $40,960 settlement with COGCC staff over being 385 days late in conducting a required mechanical integrity test of a plugged well, which initially failed the test and then later testing showed it wasn’t an environmental threat, the settlement documents said.

The commissioners voted to have the staff renegotiate not just the well-integrity test failure but a separate violation of being more than a year late conducting it.

Commissioners said the COGCC should make it clear to companies they are expected to live up to the state’s requirements.

“If we don’t draw a line and sort of say it’s unacceptable, certain behaviors are likely to continue,” said new Commissioner Brenda Haun.

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