Mountain States

As Rulemaking Series Concludes, Colorado’s Oil & Natural Gas Industry Says Regulatory Certainty Is Critical

The Colorado Oil & Gas Conservation Commission recently approved its Mission Change rulemaking series that was spurred by last year’s passage of SB 181 to overhaul industry regulations. With this rulemaking series complete, the oil and natural gas industry says that regulatory certainty is absolutely vital, as they continue to work alongside COGCC to protect health, safety and the environment while providing the energy that powers our state and country.

The process was marked by commitments of “collaboration” and “certainty” among government and stakeholders and strong support for the industry from workers, elected officials, business leaders, and community members. But there were also plenty of falsehoods and insults peddled by activists before the COGCC enacted a new 2,000-foot setback. The setback, which was rejected by voters in 2018, could have substantial “financial effects” to the state and agency staff revealed a clear bias against the companies they regulate.

API Colorado’s Executive Director Lynn Granger praised the hard work of the commission to complete the Mission Change rulemaking and stated that further collaboration among government, industry, and other stakeholders is needed in the future to keep Colorado’s energy sector strong:

“This process has been complicated and finding consensus in all circumstances has proven challenging. It is our hope that the coming months will prove constructive and yield positive outcomes for communities and operators across Colorado, because the hard work has only just begun.

“… We are committed to the process moving forward and we intend to work closely with the commission, staff and energy-producing communities to better clarify and implement the extensive set of newly adopted regulations in the months and years to come.

“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. 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. Coloradans have sacrificed a great deal in 2020 to ensure a better 2021. We stand ready to contribute to the collective recovery efforts and look forward to designing our energy future, together.”

Dan Haley, the President and CEO of the Colorado Oil & Gas Association, noted that the state has strongest rules in the country that will make Colorado a global leader in producing cleaner fuels, but said the 2,000-foot setback is not backed by science:

“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. All of Colorado can be proud of that.

“While we agreed with many of the changes enacted by COGCC commissioners, there were several points of contention. Commissioners approved unprecedented 2,000-foot siting requirements, largely based on the precautionary principle, as no scientific evidence was presented that showed such an extreme distance was necessary. In fact, all of the testimony from toxicologists during the hearings included data showing that the previous 500-foot setback was protective of public health, safety, and the environment.”

Haley also mentioned the newly established “off ramps” that should provide flexibility for operators and said that certainty and predictability is key for the industry:

“Commissioners did establish off ramps to provide a pathway to permits between 500 and 2,000 feet. How those off ramps are applied will be a crucial next step as we figure this out together. 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.

“As we turn the page to implementation, industry and regulators must learn and adapt to a new playbook. Success will largely be dependent on how commissioners apply their decision making for permits in the months and years to come. Providing some certainty and predictability, both for applicants and for COGCC staff, which must assist and coordinate that lengthy application process, will be key.”

Chelsie Miera, the Executive Director of the West Slope Colorado Oil & Gas Association, expressed concern about the new setback for wildlife areas, which would have a major impact in that region, while touting the industry commitment to protecting the environment and producing reliable and afford energy:

“We were able to work with Commissioners, staff and other stakeholders to draft most of these new rules, however, the areas without that collaborative effort are still of concern and the additional cost to do business in our state has the potential to be substantial. Of most concern to western Colorado operations are the wildlife rules. We know we have been successful balancing a healthy environment and wildlife with oil and gas development and after implementation of these rules, we look forward to continuing our critical work.

“As we face a global pandemic, job creation and access to reliable, affordable and clean energy is even more important. The hard-working women and men of the energy industry stand ready to support our region in climbing out of the economic crisis being left in the wake of COVID-19 with safe and responsible oil and gas development. We are committed to participating thoughtfully as we work through the next important steps in implementing these new rules.”

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