Senate approves oil, gas bill

DENVER —  A bill aimed at overhauling Colorado’s oil and gas regulations was amended Tuesday in an attempt to make it a bit more palatable to the industry and to Republican opponents of the measure before it was approved by the Senate Wednesday morning.

The bill, SB19-181, was approved by the Senate on a 19-15 vote and now moves to the House, where it will be subject to three committee hearings and two floor debates before a final vote.

SB19-181, sponsored in the Senate by Majority Leader Stephen Fenberg, D-Boulder, would, if passed and signed into law, shift the makeup and mission of the Colorado Oil and Gas Conservation Commission from a group tasked with fostering oil and gas development to a group focused on regulating the industry. The bill would also give local government more power to enforce land-use and zoning rules and beef up restrictions on forced pooling.

The bill was amended Tuesday to strike language that would have given preemptive authority to “the most protective standard” of regulation. A section was added to specify that a “local government’s regulations may be more protective or stricter than state requirements.”

An amendment meant to ensure local control isn’t abused was also added to clarify that oil and gas operators must minimize adverse impacts “to the extent necessary and reasonable.”

Fenberg said, “I think it’s pretty clear that any regulation has to be rational, it has to be reasonable and it has to be for the purposes of minimizing negative impacts.”

Still, these amendments are unlikely to win over critics of the bill who have expressed concerns that it will kill jobs and reduce tax revenues.

The REMI Partnership, an advocacy group made up of representatives from the Colorado Association of Realtors, the Colorado Bankers Association, Colorado Concern, Common Sense Policy Roundtable, and Denver South Economic Development Partnership, released an analysis of the bill Tuesday. It determined the bill “has the potential to significantly restrict a critical sector of our economy and eliminate up to $13.5 billion in tax revenue in just 10 years between 2020 and 2030.”

The report examined several scenarios. If SB19-181 results in the elimination of 50 percent of the new oil and gas development in the state, it could result in the loss of 120,000 jobs by 2030. If all new oil and gas development is eliminated, that figure could jump to 185,000.

“We are grateful to the senators who stood up in opposition to Senate Bill 181, a bill that could damage Colorado’s economy for years to come,” Colorado Oil and Gas Association president Dan Haley and Colorado Petroleum Council spokesman Ben Marter said in a joint statement released Wednesday afternoon. “A customary stakeholder process in the crafting of this bill would have yielded a much more workable outcome, and we remain shocked that a measure so consequential to the future of our state would be rammed through a legislative body in under two weeks without relevant input or sufficient analysis by people who actually understand the impacts that these decisions have on people’s lives.

In Northern Colorado, where the vast majority of new wells are being drilled, criticism of the bill has been particularly pointed.

Sen. John Cooke, R-Greeley, said told fellow lawmakers that Weld County’s economy “will be devastated” by the bill, which he said will result in a “legislative induced recession.”

In an email sent Wednesday morning, Loveland Chamber of Commerce CEO Mindy McCloughan urged members to contact their legislators to urge them not to support the bill as currently written.

“Northern Colorado’s economy is threatened by legislative policy decisions at the statehouse in Denver,” she wrote. “Join us, and our partners in the Northern Colorado business community, in urging legislative leaders to consider important modifications to the measure to protect the Northern Colorado economy.”

Despite the criticism, Fenberg called the Senate’s passage of the bill “a giant step forward for local governments and the health and public safety of all Coloradans.”

During Tuesday’s hearing, he fired back at critics who have accused the roughly 30-page bill of seeking to serve as a defacto ban on new production. If that was the goal, “I could have written that bill in less than a page,” Fenberg said.

Environmental groups praised Tuesday’s passage of SB19-181 by the Senate.

“This bill is nearly a decade in the making. We urge the House to act swiftly, pass these common-sense reforms, and send them to (Gov. Jared) Polis to sign so we can put Coloradans’ health and safety first,” Conversation Colorado executive director Kelly Nordini said in a statement.

Colorado Sierra Club executive director Jim Alexee called the bill a “transformational step forward for a common sense, balanced approach to fracking in Colorado.”

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