Push for tougher oil and gas laws comes down to wire in legislative session

By David O. Williams
Real AspenMay 3, 2013
With just a few days left until the end of the 2013 legislative session, Colorado lawmakers are under pressure from environmental groups to pass several bills they say will strengthen regulation of the state’s oil and gas industry.

The rush to pass a handful drilling bills by the end of the session on Wednesday, May 8, comes against a backdrop of increased public scrutiny of the current boom along the state’s northern Front Range as well as questions over Gov. John Hickenlooper’s willingness to sign off on tougher standards.

Earlier this week the Senate State, Veterans & Military Affairs Committee amended and approved House Bill 1269, which modifies the mission of the Colorado Oil and Gas Conservation Commission (COGCC) – the state’s primary regulatory agency for oil and gas drilling.

The Senate committee restored a provision to prevent board members currently on industry payrolls from serving on the Commission. In passing the bill last month, the House had stripped that provision out of the bill.
A gas rig near Battlement Mesa (David O. Williams photo).

“Coloradans expect their government to properly oversee heavy industrial drilling and fracking in their communities and neighborhoods,” Conservation Colorado officials said in a prepared statement. “HB 1269 will help to ensure that the COGCC protects the environment, preserves wildlife, and safeguards public health while regulating drilling and fracking in Colorado.”

HB 1269 (pdf) was blasted by the Colorado Oil and Gas Association (COGA) industry trade group last month.

“This ‘Wizard-of-Oz’ bill portends to be a bill which only changes the composition of the [COGCC], yet its greatest threat is a change to mineral rights in this state,” COGA spokesman Doug Flanders said. “The bill redefines ‘waste’ to exclude reduced oil and gas production that results from compliance with government regulation.”

Flanders argued the bill will allow local governments to enact regulations that curtail production, thus preempting state authority over drilling – something Hickenlooper has steadfastly opposed. The state has sued local jurisdictions that have imposed fracking and drilling bans.

The bill must now pass a full vote of the Senate on second reading.

On Friday, a bill to increase maximum fines for violations of COGCC regulations against spills or air-quality issues passed the Senate on third reading and now moves back to the House for final approval. House Bill 1267 (pdf) increases the maximum daily fine to $15,000 and repeals the cap on maximum total fines. But environmentalists were dismayed that minimum fine amounts were stripped out of the bill.

“We appreciate the Colorado Senate moving forward on increasing fines for drilling and fracking violations,” Conservation Colorado Executive Director Pete Maysmith said in a press release. “Oil and gas development is a heavy industrial activity and should be held accountable for its impacts to our neighborhoods and communities.

“We were disappointed the Senate did not restore minimum fines for violations. Coloradans expect transparency and to hold those who cause damage to our environment and public health be held accountable for their actions. Without minimum fines this legislation falls short of Coloradans expectations.”

Although not originally consulted on the bill, COGA did work with lawmakers on the final product.

“Oil and gas regulations must work to both protect the environment and the business climate by encouraging best practices without being punitive,” COGA’s Flanders said. “There are over 107,000 Colorado men and women whose jobs are supported by the industry. Our families are passionate about protecting the communities in which our families live, work, and play.”

Also on Friday, the Senate State, Veterans & Military Affairs Committee passed House Bill 1316 (pdf), a bill that would create uniform statewide groundwater testing standards and close what environmentalists call the "Anadarko-Noble Loophole" for two companies that drill heavily along the northern Front Range.

“Closing the Loophole will ensure those living in the most drilled and fracked oil and gas field in the nation - the Greater Wattenberg area - will have the same protections and knowledge of the impacts to their water," Maysmith said in a release. The bill, which has already passed the House, now heads to the full Senate floor for debate.

Environmental groups are also now calling for greater setbacks for drilling operations in proximity to groundwater sources, particularly in the wake of a recent spill of cancer-causing benzene into Parachute Creek near the town of Parachute on the state’s Western Slope.

Pending final approval, any new oil and gas regulations must be signed into law by Hickenlooper, a former industry geologist who has been criticized for his close ties to COGA and took serious heat nationally for testifying before the U.S. Senate that he’s tasted fracking fluid.

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