Colorado’s writing of new oil, gas rules off to a rocky start

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Colorado’s writing of new oil, gas rules off to a rocky start

Right at the start of what will be at least a year-long endeavor, the state agency tasked with implementing a comprehensive new oil and gas law has hit the pause button to sort out conflicting messages from the public.

The Colorado Oil and Gas Conservation Commission has scheduled hearings July 31 and Aug. 1 to consider the first set of rules to implement a law called “the most sweeping oil and gas reforms” in Colorado history. The vote on rules authorizing administrative law judges to handle some of the commission’s work was delayed June 18 following dueling motions and testimony by industry on one side and community and environmental groups on the other.

Community activists wanted the newly appointed commission to tackle more substantive matters while industry representatives said the groups were bringing up issues that were beyond the scope of the agenda.

The debate over what were intended to be procedural changes underscores the intensity of feelings as the COGCC makes fundamental changes to how the oil and gas industry is regulated.

“I’ve learned a lot from all of the various information that I’ve received from all of the groups. It may not be within the scope of what we’re considering today, but there are certainly a lot of good ideas that will percolate into a subsequent rule-making,” Jeff Robbins, COGCC director, said in a June hearing.

In an interview, Robbins said the COGCC recognizes that significant work implementing the new focus of oil and gas regulations — protecting the public and the environment  — “needs to get started sooner rather than later.”

“Historically we have had a robust stakeholder process to help us frame the issues,” Robbins said. “That’s what’s likely to start soon.”

Putting the new law into place is expected to take more than a year. The commission will hold public hearings and take comments on regulations covering several different areas — public health, well structure, abandoned wells, reducing emissions from oil and gas wells, bonds to ensure clean-up of sites. Each set of regulations will have its own rule-making process.

The Colorado Air Quality Control Commission will have its own public hearings.

Until the regulations specifically targeting health, safety and the environment are completed, Robbins can hold up approval of permits that, based on a set of criteria, he thinks warrant further scrutiny. That has built pressure from companies that want to see drilling permits approved more quickly and from homeowners and activists who want stronger regulations before new permits are issued.

During the first round of rule-making in June, homeowners and others advocating for stronger regulation of oil and gas development in and near communities wanted the COGCC to delve into more issues. Those included giving public notice of proposed drilling and determining who has a right to participate in proceedings.

Oil and gas trade organizations argued those issues were beyond the scope of the first round of rule-making. The idea behind the proposed rules, set for a vote July 31, is to empower administrative law judges to issue decisions in certain matters so the commissioners can spend more time on new regulations.

However, the state attorney general’s office has told the COGCC  that a change in the law is needed before the agency can hire the judges. Until then, the commission will likely authorize current hearing officers to handle those matters.

Kate Merlin, an environmental lawyer participating in the hearings, said there was so much push-back about limiting the scope of the hearings because of worries that more substantive issues around that particular set of regulations won’t be addressed.

“I think it was a little bit surprising to some of the citizens’ groups and environmental groups that such a narrow rule-making was proposed given the major overhaul in the focus of the commission under Senate Bill 181,” Merlin said.

The new law prioritizes protecting public health, welfare, safety, the environment and wildlife when considering oil and gas projects. It removes language that charged the COGCC with fostering development.

The legislation also clarified that cities and counties can regulate oil and gas under their planning and land-use powers, something they’ve sought as drilling has increased in and near the growing cities and counties north and east of Denver.

Motions filed by industry groups objecting to a broader discussion of the initial rules said it went beyond the scope of the proposals, would delay the proceedings and “introduce substantial confusion.”

“The Commission faces a huge task in the months and years to come, and in an effort to successfully navigate future rulemakings, it is imperative that all parties play by the same set of rules. Our industry looks forward to doing just that,” Lynn Granger, executive director of the Colorado Petroleum Council, said in an email.

Dan Haley, president and CEO of the Colorado Oil and Gas Association, agreed that the newly appointed commission has a challenging year ahead “and a high level of focus will be required every step of the way.”

“In order to succeed, it is important that the filings submitted by participating parties reflect the scope and purpose of each rulemaking, and parties not use this formal process as an opportunity to grandstand or to make political statements that have little to do with the content being addressed,” Haley said in an email.

Sara Loflin, executive director of the League of Oil and Gas Impacted Coloradans, said the industry filed motions to suppress the statements “of certain citizens’ groups.”

“While at the same time, they proposed new rules that one might argue were also beyond the scope of the rule-making,” Loflin said.

Loflin said she realizes the new commission, which will eventually be replaced by full-time, paid members, is getting its footing.

“I think they’re trying, but we also need to be attentive,” she added.

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