Energy, Utilities & Water  February 6, 2018

Oil, gas will again face legislation in 2018

DENVER — The 2018 Colorado Legislature has been in session for just a few weeks, but it’s already clear that this year’s session will see more debate about regulating oil and gas activity. And if state residents aren’t happy with the results, some stand ready to present ballot measures for consideration in the November elections.

One effort in the Senate, the Oil Gas Higher Financial Assurance Reclamation Requirements bill (SB18-063), would require drillers to assure the Colorado Oil and Gas Conservation Commission that they have the money to comply with state laws; clean up all spills, leaks or air pollution; and pay for diseases, injuries or deaths that occur in relation to a project.

Louisville Democratic Sen. Matt Jones is a co-sponsor. He called it a way to ensure that drilling operations are treated like other industrial activities. “It requires the oil and gas commission to inspect financial stability before they issue permits, including every reasonable eventuality, from reclamation to explosions,” Jones explained.

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The bill also requires the COGCC to consider a company’s finances for a bond so they clean up any spills.

Jones also introduced the Protect Act Local Government Authority Oil & Gas Facilities bill (SB18-048), which would give local governments the ability to exercise land-use authority over oil and gas facilities.

“Local governments have the right to plan, zone and refuse to allow oil and gas operations as they see fit, just they like they do every other industry,” said Jones.

More measures could be introduced as the legislative session continues. According to Jones, there may be upcoming attempts to address buffer zones around drilling operations, change the controversial legal tool known as “forced pooling” that compels holdout landowners to join gas-leasing agreements with their neighbors, and require oil and gas companies to map underground pipelines.

Other action at the Capitol could include asking the industry to take on more responsibility, especially after the April 2017 house explosion in Firestone that left two people dead.

At the local level, cities, counties and community activists may ramp up new efforts to put the brakes on oil and gas exploration, especially if they’re unhappy with what happens at the statehouse.

A number of ballot initiatives have been filed but none have been approved for the 2018 general election ballot yet.

The Colorado Farm Bureau submitted a set of proposals to compensate private property owners if state or local laws ban drilling or reduce the value of their mineral rights. They were filed by Farm Bureau Executive Vice President Chad Vorthmann and Elbert farmer Michelle Smith, and are in response to another recently-submitted initiative that increases requirements for setbacks, or how far oil and gas development can be from development and waterways.

According to a statement on the Farm Bureau’s website: “These measures are about protecting Colorado’s farmers and ranchers from extremist attempts to enforce random setback requirements. While these setbacks may on their face sound reasonable, they would essentially eliminate oil and natural gas development in Colorado.”

The setback initiative, filed late last year by climate activist groups Colorado Rising and 350.org, calls for increasing the current 500 to 1,000-foot buffer zone to 2,500 feet between oil and gas activity and occupied buildings such as “homes and schools,” and “vulnerable areas” such as playgrounds, parks, rivers and irrigation canals.

It’s similar to Initiative 78, a buffer zone proposal floated in 2016 that failed to make the ballot when the state concluded it lacked valid signatures. Colorado officials also warned that it would have effectively banned oil and gas drilling and activity from about 90 percent of the state.

This year’s initiative to expand setbacks is a statutory proposal, meaning that even if voters approve it, the state legislature could shoot it down or change it with a simple majority vote.

The Farm Bureau opposes it, according to its statement, because of the many partnerships formed between agriculture and oil and gas.

According to the organization, more than 600,000 private landowners in Colorado have mineral rights; production on them resulted in royalty payments of more than $600 million in 2012, allowing small farmers to make ends meet.

Opposition to the setback initiative will also come from other corners. Dan Haley, president and CEO of the Colorado Oil and Gas Association, called Initiative 78 an attempt to ban the industry from the state, and added that COGA will fight the latest buffer zone proposal.

“We hope Coloradans see this once again for what it is: A ban that not only hurts oil and gas families but the entire state,” said Haley.

But he also sees some bipartisan agreement at the Capitol around oil and gas issues, including a phone call-based system for excavation reporting at new housing developments. He’s cautiously waiting to see the specifics.

“We hope it stays focused on improving public safety and doesn’t get bogged down by election-year politics and posturing.”

Matt Jones conceded that any attempt to rein in the industry is an uphill battle, noting that they have more than 50 lobbyists at the Capitol. But he’s not giving up.

“Twenty percent of the wells in the past few years have been put within a thousand feet of a home, office, or school,” he said. “We need to prioritize people over profit.”

According to COGA’s Haley, the industry is trying to improve its safety record.

“Coloradans have said they want us developing our state’s energy resources cleaner, safer, and better than anywhere,” said Haley. “We’ve heard that message.”

DENVER — The 2018 Colorado Legislature has been in session for just a few weeks, but it’s already clear that this year’s session will see more debate about regulating oil and gas activity. And if state residents aren’t happy with the results, some stand ready to present ballot measures for consideration in the November elections.

One effort in the Senate, the Oil Gas Higher Financial Assurance Reclamation Requirements bill (SB18-063), would require drillers to assure the Colorado Oil and Gas Conservation Commission that they have the money to comply with state laws; clean up all spills, leaks…

Katherine Stahla
Katherine Stahla is a reporter covering business, real estate, agriculture and energy in Northern Colorado. Katherine loves covering stories that matter to communities all across the state. Katherine also likes making videos supplementing the news, and fun short films on the side.
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