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Colorado oil and gas commissioners face pressure to draft rules

On Behalf of | May 26, 2019 | Firm News

Colorado’s new law rewrites the regulatory guidelines for the state’s oil and gas resources. Senate Bill 181 grants local communities more power over neighboring developments and mandates the formation of a full-time regulatory council. Fans have argued the law will lead to some of the most impactful reform in decades.

Making such a sweeping series of changes almost always takes time, but some environmentalists have already pressured the Colorado Oil and Gas Conservation Commission (COGCC) to act more swiftly. According to The Denver Post, these environmentalists want all drilling permits put on hold until the COGCC rewrites new rules to follow the new law.

Response from the COGCC

The stakes surrounding Senate Bill 181 are high on both sides. Colorado’s communities are growing rapidly, and community members have expressed their concerns for a safe and a healthy environment. Meanwhile, there’s money in the oil and gas industry. The U.S. Energy Information Administration ranks Colorado as the nation’s fifth largest producer of crude oil and the sixth largest producer of natural gas.

Addressing both sides at a recent meeting, members of the COGCC said they wouldn’t stop awarding permits. Instead, they would pay more attention to permit requests that fell within an objective set of criteria. Those criteria are now available on the COGCC website, as are the Director’s Objective Criteria for all new regulations. These criteria should set expectations for the new rules:

  • The focus changes from “fostering” oil and gas to “regulating” it in a way that better “protects and minimizes adverse impacts” to people, their communities and the environment.
  • The rules will put new guidelines in place for alternative location analysis.
  • The COGCC must look at the “cumulative impacts” of industry developments.
  • New rules will also address the compliance of inactive, abandoned and shut-in wells.

The Director’s Objective Criteria also point out that the director can delay specific permits until the Commission is satisfied they meet the intentions of the state’s new oil and gas law.

Change is coming

The COGCC’s decision to keep issuing permits may frustrate environmentalists who want immediate action. It may also lead some oil and gas companies to act as though nothing has changed. But there are big changes coming.

The COGCC’s new regulatory rules will eventually redefine the boundaries and the intersections between the state’s communities and its oil and gas industry. Both sides will likely look for lawyers who can process the changes quickly and argue their case, and the new gas and oil regulations may take their final shape within the courtroom as much as within the COGCC.