Remember this Number: #78

Hydraulic Fracturing Effectively Shuts Down in Colorado if Initiative #78 Passes: COGCC Report

Roughly 90% of Colorado – 60 Million Acres – would be Taken Out of Play by Proposed Mandatory Setback

As a record 38 million Americans took to the nation’s highways for a Memorial Day weekend trip fueled by cheap $2.28 gasoline, the Colorado Oil and Gas Conservation Commission (COGCC) issued a stunning report that details the impact of ballot initiative #78, a move to severely limit surface use for new oil and gas operations including hydraulic fracturing.

2016 initiatives seeking inclusion on the ballot this fall are currently in the signature-collecting phase through August 3rd. Initiative #78 is one of them.

Initiative #78 in a Nutshell

End of the Shale Boom in Colorado? Oil & Gas 360

Gold area represents the 2,500 foot restricted area for “areas of special concern.” The green area represents 2,500-foot restricted area for “occupied structures.” What’s left for oil and gas development/hydraulic fracturing is shown in white. Source: COGCC.

Colorado ballot initiative #78 proposes an amendment to the state’s constitution that would require a 2500-foot mandatory setback between an oil and gas development facility (including oil and gas wells, injection wells, production and processing equipment, and pits) and any “occupied structure(s)” and “area(s) of special concern.” This regulatory change would be applied to all new oil and gas development facilities in Colorado, and any operation that used hydraulic fracturing.

Just to put things in perspective, think of a mile between two locations that you travel frequently, point A and point B, then cut that in half. A 2,500-foot setback is 140 feet short of a half mile. The current required setbacks in Colorado for oil and gas drilling are 500’ from a Building Unit (e.g. home) and 1000’ from a High Occupancy Building (e.g. hospital, school).

Key Findings: the Impact on Oil & Gas Development in Colorado

Here are the state’s key findings as to the impact this amendment would have on oil and gas drilling in Colorado if it is on the November ballot and is passed by voters:

  • ~90% of surface acreage in Colorado would be unavailable for future oil and gas development or hydraulic fracturing under the proposed mandatory setback requirement.
  • 85% of surface acreage in Weld County, the state’s largest oil and gas producing county, would be unavailable for new oil and gas development facilities or hydraulic fracturing operations.
  • In the state’s top five producing oil and gas counties (Weld, Garfield, La Plata, Rio Blanco, and Las Animas), 95% of the total surface area would be unavailable for new oil and gas development facilities or hydraulic fracturing operations.

The COGCC report states: “Of the two defined feature categories in the proposed initiative, the setback from an “Area of Special Concern” (which includes lakes, rivers, perennial or intermittent streams, creeks, irrigation canals, and riparian areas) would have a larger impact on surface acreage available for oil and gas facility development statewide. A 2500’ setback from “Area(s) of Special Concern” will result in 89% of the surface land being unavailable for new oil and gas facilities; whereas for “Occupied Structure(s)” the calculated estimate is 22% of the state surface acreage being unavailable. In Weld County, the proposed setback requirement from an “Occupied Structure” will potentially make more than 40% of the land unavailable.”

End of the Colorado Shale Boom? Oil & Gas 360

Source: COGCC

Colorado – Recent Oil & Gas Setback Initiatives – Some Background

Oil & Gas 360 Gov. Hickenlooper interview

Colorado Governor John Hickenlooper

Similar initiatives put the fear of God into the oil and gas industry in 2014. But before that issue could hit the official ballot, Governor Hickenlooper helped stave off potential disaster for the oil and gas industry and state tax revenues when he successfully negotiated with sponsors of 2,000-foot setbacks and local-over-state oil and gas permitting to pull their initiatives off the 2014 ballot in favor of a year of fact-gathering by a mixed industry/citizen/environmental/government task force. Hickenlooper told Oil & Gas 360® that he is in favor of one set of oil and gas rules for all of the western states, not a patchwork of regulations that would make it impossible for energy developers to work in the state.

The governor’s task force spent much of 2015 traveling the state, meeting, listening to proponents on all sides of the many oil and gas development issues and came out with new proposals that were used by the Colorado Oil and Gas Conservation Commission to issue revised rules regarding development of oil and gas. This is in a state which is already the nation’s poster child for stringent well permitting and ongoing regulation, a state that had already issued some of the strongest air and water quality regulations in the country.

The May 27, 2016 COGCC Report

In the new report issued Friday, the COGCC said Commissioner Holton asked that COGCC staff analyze and map the impacts on surface access for new oil and gas development facilities of the proposed 2500-foot setback described in initiative #78.

End of the Colorado Shale Boom? Oil & Gas 360

If Initiative #78 passes on Colorado’s November ballot, the brown area is the only remaining area for new oil and gas development in the selected Weld County sections. Source: COGCC

To comply with Commissioner Holton’s request, COGCC staff used a database of address points (gathered from local and state government sources) to estimate the location and number of occupied structures. “An address point is a GIS construct that uses discrete coordinates to represent the geographic location of sites and structures within a jurisdiction,” the report said.

“Using the GIS feature datasets as described above, a simple 2500 foot buffer was generated for each of the proposal defined categories – occupied structures (Figure 3) and areas of special concern (Figure 4). These buffers were merged and dissolved to create a combined polygon for calculating the total potential surface area impact (Figure 5).

The full report from COGCC may be downloaded here; included in the report is a copy of ballot initiative #78.

End of the Shale Boom in Colorado - Oil & Gas 360

Source: COGCC


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