Oil industry concerned about ballot initiatives

LOVELAND – Oil and natural-gas industry representatives said Thursday that they were concerned about increased setbacks proposed in ballot initiatives.

One ballot measure backed by U.S. Rep. Jared Polis, D-Colo., would increase buffers between oil and gas wells and buildings to 2,000 feet from 500 feet.

“If we lose on 2,000 foot setbacks, there is a potential that half the D.J. Basin could become off limits,´ said Chad Calvert, manager of government relations for Noble Energy Inc. (NYSE: NBL), referring to the highly productive Denver-Julesburg Basin, which includes oilfields in Northern Colorado.

Calvert’s remarks were part of a panel discussion at BizWest’s 2014 Energy Summit at The Ranch in Loveland on moratoria and ballot measures to limit hydraulic fracturing and increase setbacks.

The discussion comes amid a contentious debate on oil and natural-gas development proliferating near urban areas. The discussion has centered on the widespread use of the drilling technique hydraulic fracturing, also known as fracking, which involves pumping water, sand and chemicals deep underground to extract oil and gas from dense shale formations.

Voters in Fort Collins, Longmont, Lafayette, Broomfield and Boulder have passed bans on fracking, while Loveland voters defeated a two-year moratorium on fracking last month.

Coming on the heels of the moratoria are a raft of initiatives to limit oil and gas that could appear on the Nov. 4 ballot if organizers collect enough signatures on petitions. One measure, initiative 75, would give local governments constitutional authority to ban certain businesses, including oil and gas. Another initiative would increase oil and gas well setbacks to 1,500 feet.

If such setbacks passed, much of Northern Colorado’s acreage would be unproductive, said Christopher Guith, senior vice president of the U.S. Chamber of Commerce’s Institute for 21st Century Energy in Washington, D.C.

“You would see somewhere north of three-quarters of producing acreage become uneconomical,´ said Guith, referring to the 2,000-foot setbacks.

Dan Leftwich, a Boulder-based attorney and founder of MindDrive Legal Services LLC, said the state of Colorado should follow a “precautionary principle,” in which the government would have time to ensure that impacts on public health are considered before allowing drilling in some areas.

The state Oil and Gas Conservation Commission last year increased setbacks to a uniform 500 feet from 350 feet in urban areas and 150 feet in rural areas.

Gov. John Hickenlooper, meanwhile, has proposed a measure that would give cities and towns greater control over setbacks, but he is not confident that a special legislative session for lawmakers to consider the proposal will take place.

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