From The Denver Post
State officials aren’t waiting for the governor to sign a bill revamping oil and gas regulations to get a start on writing rules, a process that is likely to take at least a year, several hearings and a major overhaul of the main regulatory body.
Jeff Robbins, director of the Colorado Oil and Gas Conservation Commission, said Tuesday that he and his staff are working on criteria to determine whether a drilling permit application should get a closer look while new regulations are being developed.
Since January, the COGCC staff has taken a second look at applications for wells proposed near schools, in floodplains and in other cases, said Robbins, named the commission’s permanent director in March after a short stint as acting director.
The oil and gas legislation, Senate Bill 19-181, passed by the Colorado General Assembly last week, gives the director 30 days after the bill takes effect to release a new set of criteria the agency can use to review applications that raise health and safety concerns or are challenged by local communities.
“We’re working on that now,” Robbins said. “There’s no reason to wait for 30 days.”
The COGCC will then take public comments on the proposed criteria. The director’s ability to delay action on a permit based on certain circumstances disappears once new rules on protecting public health, safety and the environment are in place.
“My overall goal is to keep the business of the COGCC moving while implementing Senate Bill 181,” Robbins said in an email Wednesday.
The bill allows the director to hire two deputies, and Robbins said he will fill at least one position to handle the agency’s daily activities.
Another priority on the to-do list is reorganizing the oil and gas commission. The commission will remain a volunteer, part-time panel until its transition to a paid, full-time commission by July 1, 2020. In the meantime, the seats held by industry representatives will drop from three to one and separate spots will be added for members representing wildlife and environmental interests and health interests.
Throughout debate in the legislature, the bill’s opponents said the section giving the COGCC director discretion to delay permits would amount to a drilling ban.
Senate Majority Leader Steve Fenberg, one of the bill’s primary sponsors, countered that with more than 6,000 permits waiting for approval, the provision is needed to make sure public health and safety are considered when those permits are acted on.
“That could be 10 years worth of drilling,” Fenberg said in a March hearing about the backlog of permits.
Drilling and well-location permits that have been approved won’t be affected by the law, Robbins said.
The bill makes safeguarding public health, safety and the environment a priority when regulating oil and gas, eliminating the COGCC’s charge to also foster development. It clarifies that cities and counties can use their planning and land-use authority to regulate the siting of wells, monitor emissions and oversee other activities on the surface.
Approval of SB 181 follows escalating clashes between residents and oil and gas companies in fast-growing communities north and east of Denver. The clashes have produced ballot proposals on stricter regulations and lawsuits over attempted drilling bans.
Dan Haley, president and CEO of the Colorado Oil and Gas Association, a trade group, said in a statement that he has spoken to Gov. Jared Polis and his staff and “we know his administration is diligently preparing for full implementation of SB 181.”
“The formation of this interim permitting criteria is an important next step — a step that requires input from a number of stakeholders, including Colorado’s oil and natural gas industry,” Haley said.
Robbins and Dan Gibbs, executive director of the Department of Natural Resources, which houses the COGCC, promised an inclusive rule-making process.
“We want a lot of stakeholder engagement,” said Gibbs, a former legislator and Summit County commissioner.
“The first thing I would tell the public is rest assured — it’s going to be a robust, transparent process,” Robbins said. “That’s how the commission has done its rules in the past.”
Robbins’ goal is to first develop rules implementing health, safety and environmental protections. Once those are written, his ability to delay action on permits would be repealed.
Other rules that Robbins said the bill envisions being “teed off first” are a process for analyzing alternatives for well sites near populated areas; evaluating and addressing the cumulative impacts of development; and updated well flow-line regulations, including public disclosure of information about the lines.
Noting that the changes are significant, Robbins said, “I think to do it properly and to have full stakeholder involvement, I anticipate that it’s likely to take a year to do it right.”
Other rules the commission will write involve financial requirements to ensure abandoned wells are taken care of; application fees; pipeline integrity; and dealing with orphan wells.
Industry representatives are concerned the new regulations could increase the time it takes to approve permits. That could cause companies to slow their activity in the highly productive Denver Julesburg Basin, said Matt Hagerty, an oil and gas analyst with BTU Analytics in Lakewood.
However, Robbins said the intent of the legislation isn’t to make the process more time-consuming. He and Gibbs said the new state budget adds 24 full-time positions to the COGCC and the bill allows state administrative law judges to hear contested cases before the commission.
COGCC hearing officers have said a rush of applications late last year in the run-up to a failed ballot measure on tougher well setbacks and more contested applications have created a huge backlog of cases.
Robbins noted the COGCC has approved 88 well locations and 874 associated wells since early January even as some applications have gone through extra review.
