COGA statement on new COGCC rules

Here’s the release from the Colorado Oil and Gas Association (Dan Haley):

Mr. Chairman and Commissioners – my name is Dan Haley, President and CEO of the Colorado Oil & Gas Association (COGA). Thank you for allowing me a few minutes to speak to you regarding the important and complex rules that are before you today.

COGA is not new to rulemakings and engaging in our state’s ever-changing regulatory process. Over the last several years, COGA has stepped up to work with the administration, local governments, citizens and, other stakeholders to achieve constructive, meaningful, and practical solutions to tough issues faced in setback, groundwater, enforcement, citizen complaint, spill reporting, and floodplain rulemakings by this Commission. The outcome of these rulemakings resulted in the oil and gas industry operating under one of the most stringent regulatory environments in the nation.

Again, we find ourselves working in coordination with numerous stakeholders in yet another significant rulemaking – this one geared to the implementation of two of the unanimously approved recommendations by the members of the Governor’s Task Force, many of which are parties you will hear from today.

COGA fully supported the 9 recommendations submitted by the Governor’s Task Force in March 2015. In fact, our members said yes when the Governor asked industry to serve on the Task Force to help find ways for state and local governments to better collaborate and coordinate efforts for oil and gas operations. It was in the interest of all parties on the Governor’s Task Force to have a meaningful dialogue and work hard to seek ways in which the concerns of local jurisdictions, operators, and the state could be addressed and to provide constructive recommendations for policy on how best to achieve these goals.

In the end, all 21 task force members voted to adopt the language in Task Force Recommendations 17 and 20. Those recommendations were thoughtful and meaningful in approach and, by their unanimous support, addressed many of the issues before you today. These recommendations would bring a big change in the way oil and gas locations are permitted in Colorado. The changes proposed in Recommendation #17 are significant because for the first time:

  • The State would have a process and a standard for reviewing whether operators have worked in good faith to achieve agreement with local government on issues of concern about large facilities in urbanized areas.
  • There would be a record of negotiation to help the State decide what site specific mitigations may be necessary to respond to local concerns.
  • There would be established expectations that provide all parties with an understanding of when and with what conditions state permits will be considered.
  • These are meaningful changes.

    And with regard to Recommendation #20, for the first time, the State would identify parameters for industry to share longer-term planning information with local governments.

    COGA supports this rulemaking, however, maintains that the COGCC proposed rules must be modified to uphold the intent, meaning, and integrity of the task force recommendations.

    If Recommendations 17 and 20 were written the same as the draft rules before you, the industry representatives and maybe even a few non-industry members would NOT have voted in favor of the recommendations, and as such would not have passed out of the Task Force. In fact, as you will hear during the Industry presentation, there are certain elements of the rules that were outright rejected by the task force.

    That is why today, COGA, along with CPA and CPC, will be presenting an alternative rule that is based on the COGCC’s proposed rules, but reflects needed modifications in order to respect the intent, meaning and integrity of the actual recommendations of the Governor’s Task Force. The industry’s alternate proposed rule is based on the 3 C’s of Clarity, Consistency, and Certainty – you have heard this in prior rulemakings and we will explain in later testimony how our alternate rule follows the 3 C’s. Industry’s proposed rule maintains the intent and purpose of the unanimous recommendations of the Governor’s Task Force, while providing language that allows for the practicable and realistic application of an early evaluation process.

    Please keep in your mind that, in addition to the two recommendations before you today, industry task force members voted to support the other 7 recommendations, and COGA communicated and supported those recommendations to the legislature, as necessary. A lot is getting done, and today we are talking about two additional important recommendations to be implemented for further improvements in the responsible development of Colorado’s oil and gas resources.

    COGA recognizes that this is a very important hearing and that you have heard and will hear a lot of testimony, from many perspectives. We appreciate your patience and consideration and also want to say thank you to the staff for their very hard work on these tough issues. COGA asks that you strongly consider our alternative rule as presented later today by Ms. Jost as we do believe our proposal provides clarity, consistency, and certainty for all stakeholders, not just Industry.”

    Oil and gas well sites near the Roan Plateau
    Oil and gas well sites near the Roan Plateau

    COGCC approves new rules to enhance local government participation in locating and planning for oil and gas operations

    From email from the Colorado Oil and Gas Conservation Commission (Todd Hartman):

    The nine-member Colorado Oil and Gas Conservation Commission (COGCC) today approved new rules that amplify the role of local governments in siting large oil and gas facilities near communities and further bridge the regulatory roles between state regulators and local jurisdictions.

    The regulations address two recommendations from the Governor’s Oil and Gas Task Force. Specifically, the rules will:

    Provide earlier notice to local governments and opportunity for local officials to work with operators on the location of large oil and gas facilities adjacent to communities.
    Require additional mitigation measures and best management practices at these locations to address the potential impacts of oil and gas development activities.
    Require operators to share information with municipalities about future oil and gas development plans to encourage discussion and improve planning for both parties.
    Monday’s decision followed extensive public involvement, including three and a half days of testimony on the proposed rules dating to late last year, three stakeholder meetings in October and 11 statewide outreach meetings over the summer that included 39 local governments as well as several citizen and industry groups.

    “I appreciate the hard work of the COGCC staff and Commission to develop rules that implement the intent of the Task Force recommendations,” said Bernie Buescher, a Task Force member who supported the recommendations that led to the new rules. “The consultation and information sharing provisions reflect the desires of the Task Force to create more collaboration and communication between local governments and operators on large facilities near communities.”

    “The new rules provide meaningful opportunity for operators and local governments to negotiate siting issues early in the permitting process,” said Kirby Wynn, Oil and Gas liaison for Garfield County and representative for a coalition of Western Slope local governments at the rulemaking. “This was an extremely challenging rulemaking with diverse, entrenched, opinions. COGCC is to be commended for finding balance between the needs of local governments to consult with industry on well pad locations while providing sensible time limits for that consultation to occur.”

    “Going into this rulemaking, there were many expectations about its purpose, but the discussions among local and state governments, industry, and citizens have increased understanding on all sides of how local and state authority can be exercised in a complementary fashion to protect the public from oil and gas-related impacts,” said Barbara Green, an attorney specializing in local government issues and a participant in the rulemaking.

    The new rules are tied to recommendations (Nos. 17 and 20) of the Governor’s Oil and Task Force. On February 24, 2015 a two-thirds majority of the Task Force approved nine recommendations. Two of those required action by other agencies and two required action of the General Assembly. Five others required action by the COGCC, but only two of those five required a rulemaking process by the Commission.

    All documents, party statements, meeting audio and many other materials related to this rulemaking are housed on the COGCC website here: http://cogcc.state.co.us/reg.html#/rules/gtfrulemaking

    The rules approved Monday are the latest activity in a years-long effort at COGCC to strengthen its oversight of oil and gas development in Colorado. Since 2011, the COGCC and the administration of Governor John Hickenlooper has crafted rules to lengthen distances between drilling and neighborhoods, reduce the effects of light, noise and odors, protect groundwater, cut emissions, disclose hydraulic fracturing chemicals, increase spill reporting, significantly elevate penalties for operators violating Commission rules and toughen requirements for operating in floodplains.

    The Commission has also significantly expanded oversight staff, increased ease of access and volume of data available to the public, intensified collaboration with local governments, sponsored ongoing studies to increase understanding of impacts to air and water and adopted several formal policies to address health and safety issues brought about by new technologies and increased energy development in Colorado.

    From The Durango Herald (Peter Marcus):

    The Colorado Oil and Gas Conservation Commission left several sides of the debate – including environmental and industry interests – dissatisfied with certain results, suggesting that the process struck a compromise…

    Under the rule-making that concluded Monday, operators are required to consult and register with local governments when building large facilities.

    Perhaps the biggest issue was defining a large-scale facility. The definition for large facilities was connected to “urban mitigation areas,” which include areas within 1,000 feet of at least 22 homes, a school or a hospital.

    Commissioners set the trigger for operators to consult with local governments in urban mitigation areas at eight new wells, or 4,000 new or existing storage barrels, not including water storage. The motion passed on a 5-4 vote.

    No operations in La Plata County would fall under the definition, according to the La Plata County Energy Council. The county has only two urban mitigation areas, which were built after natural gas wells were drilled.

    Some counties, including La Plata, pushed for counties to be included in the mandate to register with local governments, as opposed to just requiring registration with towns and cities. The COGCC ultimately included counties in the registration process.

    But La Plata County Commissioner Gwen Lachelt, a Democrat, who co-chaired the governor’s task force, said counties are left with a limited voice.

    “It doesn’t require companies to provide counties with the same information they will be required to provide municipalities,” Lachelt said. “This is an erosion of local control.”

    Having dedicated six months to the task force, Lachelt was disappointed with the end result. She said the commission fell short of providing better protections for communities.

    “This process did not achieve those goals,” Lachelt said. “We have much work to do in Colorado to protect communities and local control.”

    Not all of La Plata’s three county commissioners, however, are concerned. Republican Brad Blake believes counties have had and continue to have a strong voice.

    “I’m not thrilled with the outcome, or sad with the outcome, because I think we still have the authority to look into these issues,” Blake said.

    He and the La Plata County Energy Council were disappointed that the county joined an alliance of several Front Range governments – led by Boulder – in calling for stricter rules. They wanted La Plata to represent its own interests.

    “La Plata entered into rule making with counties that they have absolutely nothing in common with,” said Christi Zeller, executive director of the La Plata County Energy Council.

    She also pointed out that there are existing memorandums of understanding with operators and a quarterly notification process in La Plata County.

    “La Plata County operators have been the leaders in sharing information and participating in local land-use codes and complying with COGCC regulations for decades,” Zeller said.

    Meanwhile, anti-fracking interests have proposed a slew of ballot proposals for this year, including banning fracking altogether and mandating larger setbacks of wells.

    “It’s not just the wells or the drilling, or the noise and lights and traffic 24 hours a day,” said Shawndra Barry, with the newly-formed League of Oil and Gas Impacted Coloradans. “It is being disenfranchised with no due process.”

    From The Denver Post (Emilie Rusch):

    A contentious state rule-making process intended to give local governments more say in the siting of large oil and gas facilities in their communities ended Monday as divided as it began almost a year and a half ago…

    But on the heart of the matter — how big a proposed oil and gas facility must be to trigger local government involvement — commissioners were split, just like the many industry representatives, environmental groups, local government officials and members of the public who testified during the marathon, day-long hearing.

    Commissioners voted 5-4 in favor of defining “large scale” as eight new wells or 4,000 barrels of new or existing storage, not including water.

    Tripping either threshold gives local governments a say on where the well pads can be sited and provides nearby residents with more stringent protections regarding noise, emissions, fire control, etc. — but only when the proposed facility falls within an urban mitigation area.

    Urban mitigation areas, as defined by state law, are areas where oil and gas operations are within 1,000 feet of 22 or more homes or a large facility such as a school or hospital.

    Whether the new rules, which will go into effect 20 days after publication by the secretary of state, are enough to head off future conflict remains to be seen.

    Industry representatives and advocates of local control expressed disappointment immediately after the commission’s vote.

    “We’re disappointed that the COGCC chose to go beyond the original task force recommendations, especially in these economic times with oil prices the way that they are and jobs suffering,” Colorado Petroleum Council executive director Tracee Bentley said.

    “But we do very much appreciate the process that COGCC staff ran. It was a very thorough and very well-vetted process,” she said. “We’ll continue like we always have, to work with local governments and stakeholders.”

    Oil and gas companies had advocated for a much higher 12-well or 9,600-barrel storage threshold.

    Allied Local Governments — a pro-local control consortium representing Brighton, Broomfield, Erie, Fort Collins, Longmont and Loveland, and Boulder and La Plata counties — hoped the commission would err on the side of requiring more communication, triggering local input at 2,000 barrels of on-site storage including water, and 45,000 feet of well-bore length.

    At the beginning of Monday’s hearing, the COGCC staff proposed 90,000 feet of well-bore length and 2,000 barrels of storage, not including water.

    Larimer County resident Katherine Hall, who testified in favor of local control, said she would not be surprised if a citizen-initiated measure ended up on November’s ballot.

    “The final outcome of the rule making does not go far enough to ease the concerns of Colorado citizens,” Hall said.

    Drilling rig and production pad near Erie school via WaterDefense.org
    Drilling rig and production pad near Erie school via WaterDefense.org

    Turning the Corner on #ClimateChange in 2016 — Western Resource Advocates

    From Western Resource Advocates (Jon Goldin-Dubois):

    As we begin the New Year I am filled with hope for real and concrete progress to protect the incredible place we call home. The past year has provided a strong foundation that we can build upon to reduce climate pollution and to protect western rivers and landscapes. Here’s what I mean:

    Coming out of the climate agreements negotiated by 195 countries in Paris that concluded in December, many of the world’s nations are expected to take their first steps to address climate change. For the U.S. and most developed nations, this means cutting carbon emissions. For developing nations, the accord calls for financial incentives that will help them leapfrog carbon intensive development. Importantly, the agreement endeavors to limit warming to 1.5 degrees Celsius (scientists argue we must keep warming to under 2 degrees Celsius to stop climate change’s most devastating impacts).

    Certainly, some advocates have argued that the agreement didn’t do enough. To be truthful, I would have liked to see stronger commitments to cut carbon pollution more quickly as well. But I think the agreement provides reason for hope. I say this for several reasons, not least of which is the fact that earlier in 2015 the EPA issued the Clean Power Plan, mandating carbon pollution reductions from U.S. power plants of about 33%. Clearly that’s not enough to address the U.S. share, but it does send a very strong message to the rest of the world that the U.S. is prepared to take action. In issuing the new standards earlier this year on coal-fired power plants, the Obama administration and EPA have taken our nation’s first real steps to address the carbon pollution that we know is leading to climate change. The rules have some other compelling attributes, including cleaning up air quality in communities across the country, substantial reductions in asthma attacks and other negative health impacts of dirty air, and saving consumers money.

    The Paris Agreement, coupled with the Clean Power Plan, sends a strong message to power providers but also offers some predictability (which utilities want) and sets the stage for a carbon restrained, if not a carbon free, future.

    I’m also optimistic because we now know that clean energy sources such as wind and solar can compete with coal on a cost basis, and that they are getting cheaper every day. This is a big part of the reason that in 2014, far more clean, renewable energy than fossil fuel-based energy was added to the electric grid in the United States. We will soon see the 2015 numbers, but this trend is projected to continue. In 2015 major utilities in our western region stated clearly that clean, renewable wind energy is now predictably their lowest-cost source for energy generation. And several solar projects are beating coal and gas on a head-to-head basis, leading to new projects that will come on line in 2016.

    My hope goes beyond recent action on climate change. The end of 2015 provided some expectation that we will begin to face up to some of the severe challenges to the health of our western rivers. In Colorado, Governor Hickenlooper signed the state’s first water plan. This year presents the first opportunity to take action that forwards the plan’s goals of conservation, reuse and water sharing. 2015 also saw Governor Sandoval in Nevada addressing the region’s water challenges as he convened a drought forum to develop solutions for Nevada. While it is still unclear what the ultimate impact of the current El Nino weather system (which can bring above average precipitation to the Colorado River Basin) will mean to the West and our water supply, it seems like it is finally sinking in that we shouldn’t rely on the weather when it comes to water. We need to take action throughout the Colorado River states to ensure that we have the water we need to serve 40 million people that rely on the River. But we also must ensure that our rivers not only sustain life in our cities, but also can continue to provide the thrilling opportunities to raft and fish, and the habitat to sustain abundant wildlife – just a few of the things that make the West so spectacular.

    Don’t get me wrong. There are plenty of challenges.

    • The nations of the world need to respond to the Paris agreement in the spirit with which it was crafted. Individual countries (and our states here in the West) need to respond by developing aggressive plans to reduce carbon pollution.
    • Our western states similarly need to take smart steps to protect and restore our rivers, as we plan for population and economic growth. This includes conservation, reuse, recycling, sharing water between urban and agriculture users, and smart storage solutions.
    • There are several ill-advised – okay, let’s be honest – flat out stupid plans to develop oil shale and tar sands throughout wilderness-quality lands in northeastern Utah that are still on the table. These plans need to be stopped.

    We’ll take on these and other issues, like protection of Great Salt Lake and other iconic landscapes in the West, while working to find smart solutions on the climate, clean energy and river- and water-related efforts described above by building on the many successes of 2015.

    Six days in to 2016, and yes, I am truly excited and hopeful about the prospects for making even more progress to protect the many places that we care about here in the West.

    From left, President François Hollande of France; Laurent Fabius, the French foreign minister; and United Nations Secretary General Ban Ki-moon during the climate change conference on Saturday in Le Bourget, near Paris. (Credit Francois Mori/Associated Press)
    From left, President François Hollande of France; Laurent Fabius, the French foreign minister; and United Nations Secretary General Ban Ki-moon during the climate change conference on Saturday in Le Bourget, near Paris. (Credit Francois Mori/Associated Press)

    An Exit Interview With Mike King, Colorado’s Director Of Natural Resources — KUNC

    Directional drilling from one well site via the National Science Foundation
    Directional drilling from one well site via the National Science Foundation

    Here’s an interview with Mike King who is moving on from the Colorado Department of Natural Resources to Denver Water, from Bente Birkeland reporting for KUNC. Click through and listen to the whole interview. Here’s an excerpt:

    Mike King, the executive director of Colorado’s Department of Natural Resources, is leaving the position at the end of January 2016 to become Denver Water’s new director of planning. Statehouse reporter Bente Birkeland sat down with him to talk about the future of the oil and gas and the state’s hydraulic fracturing debate, and his time heading the agency.

    […]

    On Advice For His Successor

    “I hope you’re heart is strong. This is a position where you take a lot of criticism. You have to come in with a dose of humility and also a strong sense of right and wrong and know that people are not going to agree with you at every turn. That’s the hardest thing, is knowing that you’re making people mad.”

    Keeping the Roan Plateau wild — Conservation Colorado

    From Conservation Colorado (Scott Braden):

    The Roan Plateau is one of my favorite places in Colorado; a Western Slope public lands treasure that is truly too wild to drill. But not too long ago, it narrowly escaped just that. In the mid-2000s, the BLM auctioned off tens of thousands of acres of this former naval shale reserve, which was a wilderness populated by herds of elk, genetically pure cutthroat trout, and a few in-the-know hunters and adventurers. Fortunately, people from across Colorado and the whole nation stood up and refused to see the Roan turned into an industrial park. Conservation groups sued the BLM on their faulty analysis of the environmental impacts of the leases. After a decade in the courts, the lawsuit to protect the Roan was settled last year in a way that would protect the top of the plateau, while allowing drilling (with stringent environmental safeguards) to move forward around its base. A win-win solution for all parties.

    During the past five years, I’ve been lucky enough to be able to acquaint myself personally with the Roan Plateau – doing field work and tours of the area. I can attest to the sense of wild and free country, teeming with wildlife, that characterizes the top of the mesa. There are few other people up there, and although it is accessible to anyone with a two-wheeled drive vehicle (in dry conditions), it’s the kind of place you have to work to get to. The solitude is well beyond some of the formal wilderness areas in Colorado.

    Now, the BLM has released a new draft version of the plan that will govern the Roan Plateau after the settlement. I am happy to report that the proposed alternative in the plan will, as the settlement stipulates, keep the top of the plateau free from industrial drilling and increase protections for the sides and base of the plateau. Right now, the BLM is seeking comment on the plan and hosting a series of open houses on the Western Slope. The meetings will be as follows:

    Speak Up for the Roan Plateau: Silt
    January 12, 2016
    4:00 P.M.–7:00 P.M.
    BLM Colorado River Valley Field Office
    2300 River Frontage Road
    Silt, CO 81652

    Speak Up for the Roan Plateau: Battlement Mesa
    January 13, 2016
    4:00 P.M.–7:00 P.M.
    Grand Valley Recreation Center
    398 Arroyo Drive
    Battlement Mesa, CO 81636

    Speak Up for the Roan Plateau: Rifle
    January 14, 2016
    4:00 P.M.-7:00 P.M.
    Rifle Branch Library
    207 East Avenue
    Rifle, CO 81650

    YOU can help weigh in to protect the Roan. Make a comment today to tell the BLM to adopt their proposed alternative, and keep the Roan wild and free for the next generation!

    Whiting Oil & Gas Corp sells saltwater disposal and fresh water transportation and storage system in Weld County for $75 million

    Deep injection well
    Deep injection well

    From the Denver Business Journal (Ben Miller):

    Whiting Oil & Gas Corp., a unit of Denver-based Whiting Petroleum Corp., has sold its Redtail saltwater disposal and fresh water transportation and storage system in Weld County for $75 million.

    Whiting sold the system to BNN Water Solutions, a unit of Tallgrass Energy Partners of Leawood, Kansas.

    The water system consists of 148,000-acre system consists of 62 miles of pipeline along with associated fresh water ponds and disposal wells.

    BLM issues proposed plan for drilling, recreation around Roan Plateau — Denver Business Journal

    From the Denver Business Journal (Cathy Protor):

    Nearly a year after settling long-running legal battles over oil and gas drilling on the Roan Plateau in western Colorado, the federal government on Tuesday issued a draft plan for how to manage recreation and drilling in the area.

    The federal Bureau of Land Management issued a new plan to implement the agreement and announced it would be published in the Federal Register on Nov. 20, which will kick off a 90-day public comment period.

    The document is called the “Draft Supplemental Environmental Impact Statement (SEIS) for the Roan Plateau Resource Management Plan Amendment.”

    “For many years the Roan Plateau was a symbol of conflict in the American West,” said BLM Director Neil Kornze, in the BLM’s announcement.

    Kornze credited local groups, state and industry representatives, as well and environmental and wildlife advocates for working to create a new future for the plateau.

    “This draft document moves that vision forward and protects some of the state’s most important fish and wildlife habitat while also allowing for oil and gas development in places where it makes sense,” Kornze said.

    Last year’s agreement canceled 17 of the 19 existing oil and gas leases that allowed drilling on top of the plateau, and refunded about $47.6 million that Denver’s Bill Barrett Corp. (NYSE: BBG) had paid for those leases.

    The remaining two leases on the top of the plateau, as well as 12 leases around the base of the plateau, would remain in place.

    Following the outline of last year’s agreement, the new plan bars drilling on top of the plateau, while retaining the others, the BLM said Tuesday.

    The new draft plan also included two elements — “more robust” air quality analyses and an analysis of the request by nearby communities to require natural gas buried under the plateau to be accessed via wells started on private land or areas below the plateau. The second element was part of a 2012 order from federal district court…

    Sportsmen’s groups said they were reviewing the draft EIS, but they hailed the BLM’s designation of last year’s settlement as its “preferred option” to manage the plateau’s resources.

    “This keeps us moving toward a balanced, fair solution to protecting the Roan Plateau,” said David Nickum, executive director of Colorado Trout Unlimited, in a statement.

    “We’re hopeful that the final management plan will preserve last year’s settlement, which protects the Roan’s best hunting and fishing habitat while allowing careful, responsible development of its energy reserves. Done right, we can meet both goals,” Nickum said.

    This plan can protect the roan for all Coloradans,”

    Pete Maysmith, the executive director of Conservation Colorado, said in a statement that the plan could protect the plateau “for all Coloradans.”

    “We were very happy to reach a settlement last fall and seeing this plan move forward is a highly anticipated and encouraging next step to protect this amazing area,” Maysmith said.

    The BLM said it plans to hold two public meetings in January 2016 to answer questions and accept written comments…

    Public comments on the Draft SEIS need to be received by February 18, 2016.