Over the objections of some in the environmental community that pushed hardest for reforms to the state's oil and gas industry, the Colorado Oil and Gas Conservation Commission voted Wednesday to postpone some of its most significant rulemaking to the fall.
The delay will put decisions over changes to the COGCC's mission into the hands of a newly-appointed "professional commission" that is due to be seated by July 1, under Senate Bill 19-181.
SB-181 changed the COGCC's mission from one that promoted the industry to one that makes public health and safety the commission's top priority.
The COGCC has been working on rule changes tied to SB-181 for several months. But mission change is among the most complex, according to COGCC Executive Director Jeff Robbins, who laid out the new timeline with commissioners Wednesday.
COVID-19 has had much to do with the delay, Robbins explained. The commission has had to hold its meetings remotely due to the pandemic, which hasn't allowed for parties to meet and resolve some of the issues being raised with the rulemaking.
All terms for the seven governor-appointed commissioners expire on June 30, a little over eight weeks, which isn't enough time to allow for party filings, including pre-hearing statements, responses and written testimony, and three weeks of hearings after that, Robbins explained.
While rulemakings on well bore integrity and other issues will continue apace, the mission change schedule doesn't get underway until July 3, after the new "professional commission" is seated. Under SB-181, the commissioners would all be full-time and employees of the state of Colorado. Applications for those positions are currently being reviewed by the governor's office of boards and commissions, Robbins said. In a statement after the hearing, Robbins said the COGCC believes "it is in the best interest for all parties, the Commission and Colorado to start and finish Mission Change rulemaking with one Commission."
But Robbins also said the current commission will have an opportunity to provide input on those mission change rules.
Throughout July, pre-hearing statements and pre-filed written testimony will be due, with hearings scheduled between Aug. 4 and Sept. 10. If the rules are adopted by the commission, their effective date would be Nov. 1.
The mission change rulemaking is not the only batch the new commissioners will look at: the COGCC also will work on rulemaking related to noise and odor regulations, wildlife, and waste management, spills and releases.
Prior to Wednesday's hearings, supporters of oil and gas reform pleaded with the COGCC not to further delay the rulemakings. State Sen. Mike Foote, D-Lafayette, a co-sponsor of SB-181, wrote that the current predicament for the industry is "not caused in any way by the health and safety requirements of SB19-181 but instead by external events beyond the control of the Commission or any other state official. No matter when a new regulation is proposed, the response from industry representatives has been 'now is not the time' to impose new requirements on operators."
Foote also pointed out that SB-181 requires public health and safety to be paramount regardless of the economic standing of the operators. "There was no recession exception" written into the law, Foote wrote, nor any intention of a relaxation of health and safety standards when operators face cyclical downturns.
Several oil and gas associations have asked the COGCC in recent weeks to delay the rulemaking. The Small Operator Society, which represents more than 50 private and family-owned oil and gas companies in Colorado, wrote a letter March 20 to the COGCC and Gov. Jared Polis. In it, SOS President Sam Bradley said that in the time of COVID-19 they must focus their limited time and resources to avoid layoffs and get through the coming months.
"Now is not the time to trade saving jobs and families for administrative rulemaking that can and should wait," Bradley wrote. In addition, "these are not 'business as usual' rulemakings; they represent a wholesale re-write of the COGCC program carrying serious and lasting consequences," and rulemakings should not take place via conference calls.
A temporary delay will not "jeopardize the public welfare," he wrote.
Bradley told Colorado Politics Wednesday that they're extremely pleased that the commission did what they asked in delaying the mission change rulemakings to the end of the summer. The SOS intends to ask for a delay on other rule changes as well, Bradley said.
While they delayed the mission change rulemakings into August, they will also lump a bunch of other rulemakings together, and that is an incredibly big lift all at once, Bradley explained. "We will continue to communicate with the commission that we appreciate what they've done."
Bradley said their intent is to see the rulemakings done right. "If it's not done right it won't be good for any stakeholder and could result in litigation. Our goal is to avoid that."
The American Petroleum Institute also cheered Wednesday's unanimous vote.
“We are grateful to Director Robbins and Commission staff for their recognizing the importance of conducting crucial rulemakings in an atmosphere that is safe and conducive to maximum stakeholder participation. These are challenging days for our community, but we stand ready to work collaboratively and in good faith with all parties and stakeholders at the appropriate time," said API Colorado Executive Director Lynn Granger.
Conservation Colorado also cheered the delay, but not because of the desires of the industry. The group's executive director, Kelly Nordini, said in a statement Wednesday that "Coloradans find themselves at home, physically distancing to stop the spread of a deadly virus and promote public health. The COGCC was right to take steps to ensure that those same Coloradans should not have to fear that oil or gas wells will be left unsafely abandoned in their backyard and threaten their personal health," and applauded the COGCC for taking a "critical, science-based step to protect public health by addressing enforcement and compliance standards and putting a plan in motion to advance the Mission Change rulemaking later this summer.”
Conservation Colorado was among a group of four environmental organizations that also wrote to the COGCC prior to Wednesday's hearing on the subject of orphan wells. Among the questions the group put to the COGCC was how the commission would deal with "distressed" operators who simply walk away from their wells in the midst of drilling or completion operations.
The group wrote in an April 28 letter that it has "serious concerns that the failing market could cause an increase in distressed operators in Colorado and other associated issues, including impacts to workers and everyday Coloradans losing their jobs. These associated issues range from increased flaring and venting, abandoned infrastructure, orphaned wells, and non-compliance with enforcement standards and rules that protect health, safety, and the environment as operators struggle to meet their financial and regulatory obligations. All of these issues come with associated human health and environmental impacts that cause us grave concern."
The commission also received letters from Eagle County commissioners and more than a dozen individuals, all pleading with the COGCC to keep its current schedule.
While Eagle County doesn't often concern itself with oil and gas matters, the commissioners wrote on April 27, pausing rulemaking efforts "would only continue to subject Coloradans across the state to more harmful air pollutants in the middle of a respiratory pandemic. This is not the solution," they wrote.