How New Laws Will Change Colorado Oil And Gas

ACROSS COLORADO – By John Herrick for The Colorado Independent A landmark bill that imposes new regulations on oil and gas drillers is on its way to the governor, who is expected to sign it.

The contentious measure, which passed on a party line 19-16 vote in the Senate on Wednesday, gives communities more control over well locations and drilling operations and requires state regulators to prioritize public health, safety and the environment when issuing drilling permits.

Many questions have been raised about SB-181’s long-range impact. Colorado Independent readers, for example, have asked what the bill’s key provisions are and whether the new rules will hurt Colorado’s economy. Below, we answer these and other concerns you’ve raised.

The legislation comes as population and drilling have both boomed on the Front Range, creating conflict between drilling companies and residents. Ozone levels across the region, partially due to drilling, exceed federal health limits. An explosion from a leaking natural gas flowline in 2017 killed two men.

Democratic lawmakers for years have attempted to impose stricter regulations on the industry, but majority Republicans blocked those bills. That changed when Democrats swept into office in November. About halfway through the session, they unveiled a long-anticipated package of more stringent regulations.

Oil and gas trade groups and businesses fought back, busing in field workers to the Capitol to testify and spending hundreds of thousands on TV and radio ads to drum up opposition to the bill. Republican lawmakers tried to stall the bill, and warned of Democratic overreach. Already, a number of Democratic lawmakers face recalls, including Rachelle Galindo, a first-year representative from Greeley, because of their support for the bill.

Lawmakers passed two dozen amendments to the bill, many of which were favorable to the industry. Industry trade groups still opposed the bill in the end, but issued a statement saying “we appreciate that legislative leaders heard us.” Community leaders from Weld and Arapahoe counties have already filed a petition with the secretary of state in a move to repeal the new regulations.

Question: Please list the bill’s provisions and requirements to make it easier to understand what this bill would do to oil and gas activities in Colorado.

The following are key provisions and what they mean.

— Each local government … has the authority to plan for and regulate the use of land by… regulating the surface impacts of oil and gas operations in a reasonable manner … to protect and minimize adverse impacts to public health, safety, and welfare and the environment. ‘Minimize adverse impacts’ means … to the extent necessary and reasonable to protect public health, safety, and welfare, the environment, and wildlife resources.

This provision gives local governments authority to regulate oil and gas drilling so long as it is “necessary and reasonable” to protect public health, safety and environment.

Communities such as Longmont have long sought to pass moratoriums and bans on drilling in their communities, only to have such regulations struck down in the courts.

Now that local governments will have more control, expect more hotly contested elections for local councils and county commissions. Environmental groups and industry will be working to elect candidates who share their interests.

The language “necessary and reasonable” was added at the behest of the oil industry and Republican lawmakers. It puts in place guardrails to prevent local governments and the state from passing new regulations without explicit justification.

Environmental groups worry this language is too vague, and will invite costly legal challenges in court, perhaps having a chilling effect in some communities that want to pass new regulations.

This was one of the key concessions the industry and Republican lawmakers won over the course of the bill’s passage.

— The Commission is directed to: Regulate the responsible, balanced development and production and utilization of the natural resources of oil and gas in the state of Colorado…

This will soon be the mission of the Colorado Oil and Gas Conservation Commission, which oversees the industry. The current mission says the board must “foster” oil and gas development, in addition to regulating it.

The commission’s statutory mandate, since 1951, has been to promote drilling. That law has resulted in the commission approving virtually every drilling permit, though some have been rejected or withdrawn due to technical issues and concerns.

That will likely change once the bill is signed into law.

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