After more than three months of listening to hours of testimony, poring over thousands of documents and debating for hundreds of hours, the Colorado Oil and Gas Conservation Commission on Monday approved sweeping rule changes governing the state’s natural resources industry.
Commissioners repeatedly used the word “unbiased” to describe their deliberations and subsequent set of rules, despite accusations from some industry officials and conservative lawmakers the new restrictive rules could cripple the state’s oil and gas production industry.
“This commission completed the Herculean shift from ‘fostering’ the industry to creating unbiased rules regulating the industry to protect the health, safety and welfare of our state and its residents,” said commissioner John Messner. “It will also maintain a successful oil and gas industry, which is an important workforce driver in Colorado. I’m convinced we’ve created the framework for that to happen.”
Commissioners voted 5-0 to approve the final rule changes, a fact commissioner Jeff Robbins pointed out repeatedly in his comments and in a press conference following the final vote Monday. The new rules take effect Jan. 15.
All commissioners talked about the difficulty of creating the new rules via Zoom meetings during a pandemic caused by COVID-19. If anything, the pandemic might have drawn more participation as the public and 90-plus stakeholders were better able to participate, Robbins said.
“It created broader access to the commission,” Robbins said.
The new framework provides “environmental justice” for those communities that otherwise might not have had input, creates more transparency, establishes several exceptions to the strict new 2,000-foot setback rule and will give operators more certainty about the process, Robbins said.
The setback rule, which was a change from the previous 500-foot buffer zone, faced the most criticism and dispute in the industry. But the commission also created exceptions to the new setback rules.
“The commission didn’t create those off ramps for operators not to use them,” Robbins said.
The offramps essentially create exceptions: the well is already within an approved comprehensive drilling plan or area plan; equipment with greatest noise and emissions be more than 2,000 feet; if the commission finds after a public hearing the operator has taken “substantially equivalent” protections for health and safety; or the property owner or tenant has signed a special waiver.
The new rules will apply to all existing and pending permits, which is estimated at 5,000. All will have to be re-filed under the new rules.
COGCC Director Julie Murphy estimated commissioners worked about 181 hours on the rule changes – and the irony of that number was not lost on her.
Senate Bill 19-181, created by the Democrat-controlled Colorado legislature and Gov. Jared Polis in 2019, established the new COGCC as a seven-member group with five full-time paid professionals and two non-voting members from the Colorado Department of Natural Resources and the Colorado Department of Public Health and Environment. With chairman Robbins, the voting commission members include: Bill Gonzales, Karin McGowan, Priya Nanjappa and John Messner.
“This was no small feat,” Murphy said. “Our journey continues now with implementing the rules. … To Colorado, thank you. So many of us poured ourselves into this process. Through your work, we have rules that implement 181 with the same nuance and complexity appropriate for the Colorado that we know, love and want to preserve for our children’s children.”
Reaction came quickly from industry and conservation groups.
“Colorado now undoubtedly has the toughest oil and natural gas development regulations in the country, which further protect the environment and ensure that the molecules of energy produced here locally are cleaner than most anywhere in the world,” Dan Haley, president and CEO of the Colorado Oil and Gas Association, said in a press release. “We have full confidence that operators will show how future development will be protective of public health and safety, and we’re hopeful the commissioners’ judgement will be based on what is necessary and reasonable, rather than the precautionary principle alone.”
Conservation Colorado applauded the new setback rules, “comprehensive protections for Colorado’s wildlife and habitat,” the ban on “routine venting and flaring” and the increased protections for water supplies.
“Colorado is once again a national leader in protecting public health and safety thanks to today’s new oil and gas rules,” Kelly Nordini, executive director, said in a press release. “Thank you to Governor Polis, the Department of Natural Resources and the COGCC for making the vision of putting public health and safety ahead of oil and gas industry profits into concrete policy.”
Others said it will be crucial for the COGCC to address and mitigate any unintended consequences the new rules create, especially potentially adverse economic impacts to the industry.
“While Colorado’s natural gas and oil industry is nothing if not resilient, it is critical that we have a seat at the table as guidance is developed and the rules are put into practice,” Colorado American Petroleum Institute Executive Director Lynn Granger said in a release. “Due to the lack of conversation around economic impacts throughout this process, it is equally important for the commission to honor their pledge to address any unintended consequences should they come up.”