Energy industry: Colorado leads nation in regulation

GREELEY — Industry and state regulatory officials say that Colorado is ahead of the nation in its regulation of the industry as it affects safety but the work isn’t done.

Eric Jacobsen, senior vice president of Extraction Oil & Gas, the producer with the No. 3 production acreage in the state, said technology is largely responsible for the industry’s track record.

“Our industry ranks No. 7 out of 83 industries in terms of safety. Industry six is, like, data processing. Construction has far and away the highest number of workplace fatalities. Oil and gas has fewer fatalities than brewing,” he said. “We carry safety as a value imbedded deeply in our culture. Our goal is zero injuries.”

Jacobsen was among those to appear on a panel discussion about regulation and safety in the oil and gas industry at the annual Energy Summit, a BizWest event, held Tuesday at the DoubleTree by Hilton Greeley at Lincoln Park.

Julie Murphy, executive director of the Colorado Oil and Gas Conservation Commission, said the safety record of the industry has come about in the face of widespread expansion in production.

She said Colorado this year has seen a 12 percent increase compared with 2017 in oil production and a similar expansion in natural-gas extraction. Meanwhile, the population has increased, resulting in more potential opportunities for conflict between residents and the industry.

In 2017, Weld County was the fourth in the nation for growth with a 20 percent increase in population in the past decade.

During that decade, she said, the COGCC has reorganized and taken on new responsibilities — setbacks, wildlife mitigation, inspections of areas that haven’t been inspected for awhile and flow-line regulation.

“We’re all trying to live together in a state that is very diverse politically.”

She said Colorado leads all states in environmental regulation of the oil and gas industry and frequently is consulted by other states that are working on their own regulations.

Jacobsen said there always will be opportunities to advance safety regulations, and he hopes that government regulators focus on the aspects of the industry that are most important. He also encouraged industry representatives to continue to work to be out in front of government regulation — to improve as an industry before government sees a need to regulate.

He cited two activities that have made a big difference in the safety of the industry. First, he said rapid construction of pipelines have made transportation of oil and gas safer than what would be the case if the industry had to rely on trucks to transport the resources. Pipelines have eliminated millions of truck miles, he said, and in some cases eliminated tank farms in the region.

Second, removing legacy, vertical wells is another advancement, he said. Several thousand vertical wells are eliminated each year and replaced with horizontal wells that reduce the surface exposure of the industry.

Federal regulation

A third member of the regulation and safety panel, Sue Combs, a partner with Holland and Hart law firm, discussed regulation from the Occupational Safety and Health Administration. She said OSHA has made the oil and gas industry an emphasis in Region 8, which includes Colorado.

Combs, who lives in Jackson, Wyo., said Colorado, unlike Wyoming, is a federal OSHA state, meaning that safety regulation comes out of federal offices instead of state.

She said federal uncertainty since the 2016 election has affected enforcement. OSHA still has an acting administrator, for example, which means that priorities for the agency have not yet been set.

Still, numbers of inspections have increased in the region, she said, in the past year.

She advised oil and gas operators to pay attention to their entire operations. Construction industry standards, she said, could be applied to the oil and gas industry if equipment in use is typically used in construction. She also said that companies that operate at worksites with multiple employers could have exposure from activities of workers who work for other employers.  

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