Oil and gas regulatory war heating up in Colorado
Counties across Colorado are gearing up for the next major oil and gas boom, scrambling to draft local regulations for everything from visual impacts to physical setbacks of drilling equipment. But state officials are increasingly flexing their regulatory muscles, and industry representatives fear more local regs will slow the next boom before it’s in full swing.
Meanwhile, citizen activist groups worried about environmental health impacts and property values are putting more pressure on county officials to beef up local regulations because they say state rules are inadequate to address local concerns. And federal officials argue it will take oversight from all three levels of government.
Speaking in Denver last week, U.S. Environmental Protection Agency (EPA) administrator Lisa Jackson said the federal government has a role in regulating oil and gas drilling activity – establishing ozone levels for hydraulic fracturing emissions, providing guidance on water issues – but that state and local governments must take the lead.
Jackson last week said “it may come as a surprise to people in Washington,” but she doesn’t believe the EPA can adequately regulate hydraulic fracturing, or fracking. “[Fracking] is a complex and diverse activity. All these wells all around the country have to be regulated. The exhaust from the equipment is intense.”
“[The EPA] can set a floor on emissions, the drilling activity pollution; we can set the ozone standards” Jackson said, adding, “Rules [the EPA has promulgated] are out there now available for public comment.”
But the EPA last week announced a third postponement of emissions rules for fracking, a process that involves injecting water, sand and undisclosed chemicals under high pressure into oil and gas wells to fracture geological formations and free up more hydrocarbons.
Participating in a panel discussion on Colorado’s “New Energy Economy” and its signature “Clean Air, Clean Jobs Act (HB 1365),” Jackson praised former Gov. Bill Ritter and his vision in championing legislation that will eventually convert aging coal-fired power plants to cleaner-burning natural gas and renewable sources.
“Natural gas is key to moving to a 'Clean Air, Clean Jobs' agenda, but we want it to be extracted in an environmentally sound way,” Jackson said, adding water is also a major concern in fracking, which occurs in about 90 percent of gas wells in Colorado. “With fracking, it's a water issue, too. How we store the water that comes up carrying heavy metals, how the [fracking solutions] shot into the ground may be affecting groundwater.”
Colorado-based conservation groups for years have been battling with state officials for more stringent regulations, urging county governments to assume a bigger role.
“Overall, administrator Jackson is right, if natural gas is going to be a worthwhile domestic energy source, then development must be done right,” said Frank Smith of the public policy group Western Colorado Congress. “She publicly recognized that gas wells emit pollutants, that fracking can lead to water problems, and that regulators have a role to play.”
New EPA emissions rules for coal-fired power plants led to Ritter’s Clean Air, Clean Jobs Act, with some Republicans joining Democrats and the natural gas industry joining with conservation groups to get out ahead of looming federal regulations that would mandate expensive new emissions technology for old coal plants.
“The jury is still out on natural gas and Gov Ritter's HB 1365,” Smith added. “Health experts are just starting to consider impacts of oil and gas development, split estate landowner and community rights have yet to be addressed, and implementation of widespread coal-to-gas power plant conversion may be premature.
“We've gotta look before we leap, and it appears that the federal government may open the floodgates of natural gas before meaningful protections are put in place.”
Communities on Colorado’s Western Slope have been battling for years to get county officials to stand up to the state and require more stringent oil and gas drilling regulations, even suggesting counties invoke 1041 powers typically reserved for major infrastructure such as utility lines and water storage and diversion projects. Some counties have had local drilling regulations in place for decades; others are just getting started.
Residents of Huerfano County in southern Colorado are engaged in a legal battle with the Colorado Oil and Gas Conservation Commission (COGCC) – the primary state regulator of oil and gas drilling -- over a permit issued to Shell to drill and frack a 14,500-foot-deep exploratory natural gas well two miles from the tourist town and artist enclave of La Veta.
Keli Kringel, president of Citizens for Huerfano County (CHC), said the EPA should take a much more aggressive regulatory role.
“Fracking presents too great a risk to the public health and environment,” Kringel said. “EPA needs to mandate the use of green fracking alternatives, ban the use of all chemicals known to cause health problems or that have not been sufficiently studied, and strictly monitor ‘naturally occurring’ radioactive and toxic substances.”
CHC’s Sandy Borthick adds that full public disclosure of fracking chemicals and regulation under the Safe Drinking Water Act (the so-called Halliburton Loophole) are mandatory.
“EPA standards for air and water protection must be strengthened and enforced, and the Halliburton Loophole closed,” Borthick said. “The COGCC, as the state oil and gas regulator, has failed to protect the public, leaving communities to fend for themselves.”
But COGCC Director David Neslin disagrees that counties need to become more involved. “We believe oil and gas development is most effectively and efficiently regulated at the state level,” Neslin recently told the Denver Post. In the same article, Colorado Oil and Gas Association President Tisha Schuller said more county regs could have a chilling effect on the industry.
“Colorado already has the most comprehensive rules in the nation,” Schuller said. “County rules could completely stifle the industry.” But concern is mounting along Colorado’s densely populated Front Range, where oil reserves in the Niobrara Formation are leading to a new land rush and possible drilling boom in the heart of suburban Colorado.
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