OGCC should consider differences between state’s producing regions

Progressive 15, a membership advocacy group representing a 15-county region in Northeast Colorado, has reviewed the draft changes in the regulations that the Oil & Gas Conservation Commission has been having hearings on, and we have some specific issues we would like the commission members to consider.

Foremost is that vast differences exist between oil and gas production on the Western Slope and the Eastern Plains.

First, we would like to address some unique issues in our area. Most of the drilling is done on private property rather than government leases. Some of the new rule changes circumvent private property rights and county government regulations.

Additionally, most of our operators are residents of the very areas they work in and have been very diligent about policing themselves as their actions affect their families. Because they are smaller operators, minimal changes in costs and/or time can have a great effect on their operating costs.

Lastly, we border two states that are welcoming to this particular industry. Kansas and Nebraska both have relatively easy permit processes, with consideration in a very short period of time.

Second, we would like the commission to consider some alternate bonding costs based on the actual costs of plugging a well. The cost is approximately $30,000 in the Northwest part of the state while it can be done for about $9,000 in the Northeast. With the new rules now requiring a cash bond, this is tying up operating cash that is above the true need.

Water issues

Third, with regard to the pit-lining requirement for earthen water disposal pits, we would strongly encourage grandfathering in existing pits. Most of these pits have been used for several decades and to our knowledge there has not been an adverse impact to aquifers or groundwater.

Simply put, local operators we have talked with have indicated that lined water pits will not work. They will quickly fill up and then the wells they serve will have to be shut down.

Also, we feel that for wells producing from the same zone or producing water of similar quality, adjacent operators should be allowed to share non-commercial water disposal facilities and underground disposal wells. Requiring a water pit for each well or each lease will only cause more land to be put out of agricultural production. Allowing operators to share these facilities will help spread out the cost of initial construction and of daily operations.

Fourth, wildlife in the Northeast corner of the state has grown and thrived right next to drilling operations. In fact we have a more diverse and greater population of most wildlife than existed 50 years ago when the first oil boom came into the region. Shutting down operations for a period of time costs money and for wells producing 4 to 5 barrels a day is not cost-effective. We hope the commission members will make decisions based on reality and science rather than a perceived threat.

Permitting issues

Lastly, we hope the commission will be continually cognizant of the length of time in the permitting process and the amount of documentation required. The Northeastern part of the state has already taken a major hit with irrigation water wells being shut down requiring 2 or 3 years of court proceedings to get augmentation plans in place. We do not want that to happen to the oil and gas industry.

Commissioners have been hearing the most from those either adamantly opposed or supportive of the changes. We consider Progressive 15 somewhere in the middle, where we believe most of the state stands. We understand the need for rules and regulations and support those that are based on sound reasoning and data.

However, we strongly believe that the commissioners must weigh the economic impact this industry has, not only to the private citizen in leasing rights, but to jobs and ancillary services. Additionally, many government agencies at both a state and local level rely on severance taxes for funding of local projects, higher education, roads, open space, wildlife, etc. Any erosion of this fund affects us all.

Catherine J. Shull is Executive Director of Progressive 15. She can be reached at 970-768-2230 or cathy@progressive15.org.

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