Settling their differences: oil companies, muni govt’s

A growing number of Front Range cities say they have seen interest from oil and natural-gas producers willing to follow stricter regulations in exchange for the chance to speed up the review of their drilling permits.

The city of Longmont believes it developed the first accelerated review process in exchange for tighter restrictions on drilling.

These restrictions include how closely a well can be drilled to residential areas; they also address environmental issues.

“We wanted to create some opportunities for operators,” Longmont Senior Planner Brien Schumacher said.

Fort Collins and Boulder County have developed two approaches to granting drilling permits: The “standard” review that tends to follow state law, but which takes longer, and a faster review with stricter requirements.

It’s unknown whether the regulations will draw challenges from the state. A spokesman for the Department of Natural Resources declined to comment.

The state already is suing Longmont for overstepping its authority in regulating drilling operations, though a letter from the attorney general’s office explaining the lawsuit does not mention the city’s accelerated permitting process. It only points out that specific regulations, such as a ban on drilling in residential areas, conflict with state law.

Longmont voters earlier this month also passed a ban on hydraulic fracturing, which Gov. Hickenlooper said earlier this year was likely to result in a second lawsuit from the state.

The fracking ban may not have much chance of surviving. The state Supreme Court overturned a similar Greeley ban on oil and gas drilling in 1992.

Regardless, Schumacher believes that Longmont’s accelerated permitting process will remain unchallenged, especially because no one is forcing oil and gas companies to agree to the more restrictive drilling rules.

“It’s a voluntary agreement,” he said.

He stressed that producers still could choose to follow standard rules that tend to mirror state law.

Top Operating Co., for one, has agreed to follow the stricter regulations tied to the fast-track review. The company plans to drill a number of wells at 11 sites in the Weld County portion of the city.

“We wanted to be good neighbors, responsible partners with the city to develop our minerals in an environmentally responsible way,” Top Operating President Rod Herring said. “It’s a matter of getting along; we found it was in our best interest to do so.”

The accelerated process could shave several months off the permitting procedure, Schumacher said.

Among other benefits, oil producers would not have to schedule a time-consuming neighborhood meeting of people who live in the area proposed for drilling.

Additionally, an accelerated review means a decision by the city could not be appealed to the City Council, potentially saving producers even more time.

Following in Longmont’s and Boulder County’s footsteps, Fort Collins has developed a similar expedited review that the City Council will consider Dec. 4.

Some companies have already indicated they are interested in following the accelerated review, said Laurie Kadrich, the city’s director of Community Development and Neighborhood Services. She declined, however, to name the companies.

“For them, predictability of a process is really important,” she said. “Working through the expedited process has a lot of predictability in it: There are more prescriptive standards.”

The expedited review contains fewer steps than the standard review, but how much time a company might save will depend, she said. Kadrich would ultimately be responsible for approving drilling applications.

Similar to Longmont, companies wanting to drill in Fort Collins would not have to hold a neighborhood meeting and a decision by the city granting a permit could not be appealed to the City Council. It’s still possible a decision could be challenged in court.

By contrast, under the standard review, drilling applications would have to win an endorsement from members of the city’s Planning and Zoning Board. Also, a resident could appeal the board’s decision to the City Council.

There’s no shortage of concerns about how oil and gas development would affect air quality and water quality. Kadrich feels the expedited review addresses those worries.

“Under the expedited review process, there are more prescriptive criteria than what the state standards provide for and more protections for public health and safety,” Kadrich said.

In an expedited review, companies must maintain a 500-foot separation between a well and occupied building, water well, natural area or city park and a 150-foot setback from any property line.

The rule differs from state law, which requires that a wellhead be located 350 feet from buildings in urban areas. In rural areas, setbacks are 150 feet, or one-and-a-half-times the height of a derrick, whichever is greater.

An accelerated review also requires producers to use closed-loop drilling systems, meaning the capture and storage of drilling fluids from hydraulic fracturing in tanks instead of open pits.

Other rules include reporting emissions immediately, limitations on venting gas during drilling, and air and water sampling.

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