Steve Lindsey, the senior director of government and communication affairs with Quicksilver Resources, listens to a question in the data van located at an oil well on Wolf Mountain in 2011.

Photo by John F. Russell

Steve Lindsey, the senior director of government and communication affairs with Quicksilver Resources, listens to a question in the data van located at an oil well on Wolf Mountain in 2011.

Local governments seek stronger voice in oil and gas exploration

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Colorado Oil and Gas Conservation Commission GIS program

The gray dots on this map of Colorado show all of the pending oil and gas permits in the state.

— Sweet crude oil and natural gas are never harvested in isolation in Colorado.

Their careful and often complicated withdrawal from the earth is regulated by 175 pages of state rules, a team of 15 inspectors and the local governments that preside over the land where the precious resources are sucked from the ground.

“It’s a highly regulated, highly technical, highly professional, science-driven industry, and our oversight is robust,” Colorado Department of Natural Resources spokesman Todd Hartman said. “These are serious operators who are very serious about the work they do, and they often live in the communities where they operate.”

But with the quality of air, water and the public health all potentially at stake, the relationship between the Colorado Oil and Gas Conservation Commission, which regulates the state’s energy industry, and local governments in Colorado is being tested, and sometimes fractured, as oil and gas exploration increases and stretches into communities like Routt County and Steamboat Springs.

Two powers

The Colorado Oil and Gas Conservation Commission, or COGCC, is not alone in overseeing energy exploration in Routt County.

Local governments regulate the industry during the permitting process for oil and gas wells, but their power seems to end at the impact energy exploration has on roads and public services. In Hayden, for example, a recent request by Shell Oil to drive heavy equipment trucks on a town road was denied because of safety concerns.

But the well sites the trucks travel to ultimately are regulated by the COGCC. The agency, which also is tasked with ensuring that operators follow state and federal water and air quality rules, polices the drilling operation from its impact on the environment to the types of fluids it injects into the ground.

The regulatory environment is complex, and foreign to many.

“There is a lot of misinformation about the industry and about the impacts, and we’re dealing with that along with addressing legitimate concerns,” Hartman said. “As drilling occurs in greater proximity to more people, then it can raise concerns, particularly in communities that don’t have a lot of history in oil and gas” exploration.

A vast field

The COGCC polices the technical aspects of the drilling operation, including setbacks mandated for hydraulic fracturing operations. The commission’s team of 15 field inspectors, who each cover multiple counties, creates extensive digital histories of all of the wells in their jurisdictions.

But the field of wells the inspectors must cover is vast, and the numbers grow each month.

Some engaged Routt County residents question whether COGCC’s inspection team is large enough to monitor the compliance of the active wells that numbered 46,958 at the start of February and continue to grow each month. COGCC performed 12,239 field inspections across the state in 2011, down from 17,075 in 2010, according to the agency’s January staff report.

“It’s like your police force,” said Rodger Steen, co-chairman of the Community Alliance of the Yampa Valley’s Oil and Gas Committee. “The more people you have, the better your compliance is going to be.”

Kris Neidel, the COGCC field inspector assigned to Routt County, is based in Steamboat Springs but also inspects wells in Moffat, Summit, Grand, Eagle and Jackson counties.

Steen said because of the complexity of well sites, he doesn’t think there are enough boots on the ground to ensure all of the oil and gas operators are monitored sufficiently for spills and other hazards.

He said Routt County could use more specialized staff of its own to visit the wells more often.

“We believe there are inspection deficiencies here,” Steen said, noting the size of the inspection team relative to the number of wells in Colorado. “The deficiencies can be minimized more and more with the addition of more specialized inspectors.”

Finding a balance

The two bodies primarily responsible for regulating the industry have a complex relationship that today is being strained in some parts of the state as more drilling permits are issued along the Front Range and above the Niobrara Shale formation thousands of feet below the surface of Northwest Colorado.

Steen said that because what happens at a well site doesn’t always stay contained at the well site, local governments should assert more control in regulating such things such as air pollution and water quality, items the COGCC maintains are the state’s responsibility to monitor.

“The noise the wells make and the things they emit affect the entire county,” Steen said.

But state regulators and some oil and gas operators fear the addition of several sets of local regulations that differ from county to county could prove to be exhaustive and unnecessary, and ultimately would be pre-empted by existing state rules.

Still, Stephen Lindsey, Quicksilver Resources’ senior director of government and community relations, said it always is in the best interest of an operator to meet or exceed regulations.

“It’s a balance between an economic engine, jobs and tax revenue for the state and local government, and the concerns that local populations have about the activity,” Lindsey said about the regulatory environment.

His Fort Worth, Texas-based company will find out March 12 whether Routt County will approve a permit for a second exploratory oil well on Wolf Mountain about six miles northeast of Hayden. The county’s Planning Commission gave its approval last week.

Routt County hosts 43 active wells, and only one was drilled last year. The COGCC approved 10 well permits here last year. One permit currently is pending.

While Routt County’s Planning Department has a local governmental designee who works closely with the COGCC and operators like Quicksilver during the permitting process, the relationship between the COGCC, operators and leaders of other counties has not been as amicable.

Shades of gray

Robbie Guinn, vice president of SG Interests, a Houston-based oil and gas operator, said the line between the COGCC’s regulatory authority and that of local governments in Colorado has proven elusive to his company.

“That line is gray, and the courts have not defined it very well,” he said, noting it is costly litigation that so far has helped to clarify some of the cloudiness surrounding regulating authority in Colorado. “There needs to be more clarity.”

SG Interests operates in five states and maintains close to 30 active wells in northwest Gunnison County, Guinn said. His company has taken exception to Gunnison’s oil and gas regulations that require wells to operate at least 500 feet from water sources. COGCC rules put the setback from certain water bodies at 300 feet.

“One of the problems with local jurisdictions is if they have multiple sets of rules in addition to state regulations, the permitting process becomes so cumbersome that it is difficult to get a permit in a timely fashion,” Guinn said.

SG Interests last year sued Gunnison County’s commissioners, claiming the additional regulations they imposed, including the stricter setback from water sources and a longer permitting process, were preempted by state law.

However, Gunnison County celebrated a legal victory in January when a district court judge handed down a summary judgment that reaffirmed a county’s oil and gas regulations are not assumed to be pre-empted by COGCC regulations, and that an operator must provide evidence that the rules hindered its ability to operate.

Guinn said Friday that the lawsuit is on hold while SG Interests and the county work to find other ways to “settle the matter.”

Barbara Green, a land use attorney who has represented Gunnison County, said the summary judgment and other court cases before it show there is plenty of room for counties to have a louder voice in the regulation of oil and gas exploration. Because they are so unique and feel impacts from oil and gas exploration differently, counties should have unique regulations to mitigate any negative impacts of drilling, she said.

“It’s not like the oil and gas commission is over counties with their regulations,” she said. “They are coequal when carrying out the will of the state, and in some cases (counties) are superior to the state body.”

She said what is clear is that no county has the authority to ban oil and gas operations completely, and their power to regulate the industry is derived from their land use codes. What is not yet clear is whether counties can ban oil and gas operations from certain zoning classifications or whether some county rules on the actual drilling process would be pre-empted by state law. She added that preemption of state law is never assumed and can be confirmed only if the operator can prove a county-imposed regulation creates an “operational conflict,” a difficult feat that requires an evidentiary hearing.

State steps in

Gov. John Hickenlooper, who recently said the state’s 64 counties shouldn’t each have their own set of oil and gas regulations, on Wednesday signed an executive order to form a task force that will attempt to clarify the regulatory environment in Colorado.

According to the order, the 11-member task force will be represented by two members of the COGCC, as well as by leaders of the state Legislature and directors of such groups as the Colorado Conservation Voters and the Colorado Municipal League.

The group will work to harmonize regulatory authority over such items as noise abatement, air quality and setbacks, according to the executive order.

Steen said only time will tell if the new group will do anything to help protect the land, water and people of Routt County.

“The concept is good, but at this point, we really don’t know what the commission will do,” he said. “There’s no guarantee this will help. If they’re willing to bring (regulations) up to current technology and make the industry meet stricter standards, then I feel most counties will accept it. If they come up with no changes to the rules, then there will be no solutions generated to this problem.”

Operators like Guinn were quick to welcome the formation of the task force.

“I think it’s a positive step,” he said. “The state needs to define (the regulatory) line. If it doesn’t, there’s going to be more and more litigation, which doesn’t answer the question.”

Not wasting time

Counties aren’t waiting for the state to harmonize the muddled regulatory environment for them.

Routt County’s Board of Commissioners met with COGCC interim director Thom Kerr on Feb. 21 to discuss the county’s own desire for baseline water testing and quick responses to noise complaints, especially in rural Routt County, where piercing silence usually pervades.

“There’s an expectation from the public we can leap buildings in a single bound,” Commissioner Doug Monger said two weeks before that meeting. “There’s a misrepresentation that we have all this power, when the frustrating part is we have the power given to us by the state Legislature, and only that power.”

Commissioner Diane Mitsch Bush said that as the county rolls out a new template for approval of oil and gas permits, it is trying to avoid the costly and lengthy lawsuits that can arise when oil and gas operators think municipalities have overstepped their authority with local regulations. She said it continues to be a difficult task to find a balance between state and local control of the energy industry.

“If we regulate to our satisfaction, our regulations could be pre-empted (by state law) and lead to a court case,” she said. “But if you err on the side of being overly concerned about pre-emption, then you can end up with polluted air and watersheds.”

Still, she said she would rather support regulations to protect water and air quality rather than under-regulate.

Buying time

As wells and horizontal drilling operations creep closer to their population centers, some Colorado counties and municipalities are buying more time to examine their regulations to ensure they are prepared to mitigate any impacts from the energy industry.

Boulder County and the city of Colorado Springs recently imposed moratoriums on accepting new permits for oil and gas drilling.

New oil and gas exploration is suspended in Colorado Springs until May, and in Boulder County until August. The city of Longmont is staying new oil and gas permits.

With the exception of Mitsch Bush, Routt County’s commissioners opposed a similar moratorium on new permits and instead expressed confidence in the regulations they already have in place.

However, an online petition that asked the commissioners to reconsider their opposition to a stay on new permits was signed by 3,431 Colorado residents, including 861 from Routt County, said Kyle Elston, the Stagecoach resident who started the petition.

“I think we have all the tools in our toolbox necessary to deal with the issues of oil and gas permits,” Commissioner Monger said in January in response to the petition. “We probably have the strongest set of regulations in the state.”

Educating the public

Tisha Schuller, president of the Colorado Oil & Gas Association, said the renewed interest in energy exploration continues to pack town hall meetings across the state, especially along the Front Range.

She said counties without a recent history of energy exploration are concerned about the impacts of oil and gas production and often are moving to adopt new sets of regulations to address the concerns of their constituents.

“The No. 1 piece of misinformation about oil and gas regulations is that the oil and gas industry is unregulated,” she said. “That is a pervading sentiment. It’s really scaring people. They bring their babies (to the meetings), and they are worried about their health. I want them to know the industry is regulated, and there are a number of controls.”

She said initial meetings in municipalities about oil and gas exploration tend to start out heated, but as the conversations continue, they become more fact driven and ultimately more meaningful.

“In the beginning, the meeting is dominated by misinformation,” she said. “But after about three meetings, the emotionally charged conversations turn to ones more about practical day-to-day engagement between the oil and gas industry and our community.”

She said the COGCC and COGA are adding more personnel to work with local governments.

“What I found is that a year ago, local government wasn’t even in COGA’s job description,” Schuller said. “This is quite a transformation for us as we recognize that this is where community members want to engage.”

Schuller acknowledged that no matter the strength of the regulations or the amount of outreach and education her organization conducts, there always will be opposition to the energy industry.

“Not everyone is going to want the development as their neighbor, and there are going to be disagreements,” she said. “But that doesn’t stop us from wanting to engage.”

To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com

Comments

Steve Lewis 2 years, 5 months ago

Scott, Thanks for this article. Please do more on Oil and Gas.

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Steve Lewis 2 years, 5 months ago

Tisha Schuller, With all due respect, I disagree. The worst misinformation came from you. The Sierra Club recently sent you this letter:

http://water.clean.home.comcast.net/%...

February 27, 2012 Ms. Tisha Schuller Colorado Oil and Gas Association 1660 Lincoln Street, Suite 2710 Denver, CO 80264 Dear Ms. Schuller, It has recently come to our attention that your Association has paid for and is airing a radio advertisement about drilling and fracking in Colorado. The ad is here: http://www.coga.org/audio/Gov_Hickenl... This ad contains this sentence: “Since then [2008] we have not had one instance of groundwater contamination associated with drilling and hydraulic fracturing.”

This sentence is not correct.

Specifically, our organizations have analyzed the 615 “Spill/Release Reports” (footnote1) (Form 19, 6/99) for oil and gas drilling and fracking reported to the Colorado Oil and Gas Conservation Commission (COGCC) in just one Colorado County (Weld) from 1/3/2008 – 1/5/2012. These publicly searchable reports (Table 1 below)available on COGCC’s website reveal that: 1. 44% of spills have impacted/contaminated (footnote2) groundwater. 2. 2.8% of spills have impacted/contaminated surface water. 3. 40% of spills have resulted in or been caused by berm failures.

Further, we have also reviewed the 1,000 Spill/Release Reports available on COGCC’s website for Weld County, dated 8/28/2003 – 1/05/2012 (the COGCC website only lists the 1,000 most recent reports). Those reports (table 2 below) reveal that: 1. 43% of spills have impacted/contaminated groundwater. 2. 3.1% of spills have impacted/contaminated surface water. 3. 43% of spills have resulted in or been caused by berm failures.

In addition, these reports are available for each the 40 oil and gas companies operating in Weld County, revealing that the bulk of the spills and contamination are due to a handful of companies.

1 Spill/Release Reports are available on COGCC’s website: http://cogcc.state.co.us/ 2 Form 19, 6/99, “Spil/Release Reports” interchange the words “impacted” and “contaminated.”

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Steve Lewis 2 years, 5 months ago

Further yet, we randomly sampled 60 of the 1,000 Spill/Release Reports (6%) and generalized those results to create an estimate of total fluid contamination. Those results (Table 3 below) reveal that from these 1,000 Spill/Release Reports: 1. Up to 824,600 gallons of oil have been spilled/released and “unrecovered” in Weld County. 2. Up to 383,600 gallons of produced water has been spilled/released and “unrecovered” in Weld County. 3. Up to 547,400 gallons of “Other” fluid has been spilled/released and “unrecovered” in Weld County. (“Other” may include fracking fluids.) 4. Up to 2.44 billion square feet of ground have been contaminated by spills and releases in Weld County.

The results above are just for one County, Weld, and are for only 1,000 Spill/Release Reports, and do not reflect spills and groundwater contamination prior to 8/28/2003 in Weld County, and do not reflect spills and contamination in the 41 other Colorado counties in which oil and gas drilling and fracking occur.

Because the statement in your radio ad is not correct, we request that you remove it from the airwaves.

Respectfully, Shane Davis, Chair, Poudre Canyon Group of the Sierra Club, Gary Wockner, PhD, Colorado Program Director, Clean Water Action,

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Steve Lewis 2 years, 5 months ago

Doing the math for Weld County, 2008 to date:

615 spill/release reports show: 270 impacted/contaminated groundwater 17 impacted surface water 246 spills resulted in or caused by berm failures

Contemplation of Routt repeating a slight fraction of Weld County's experience is sufficient argument for a moratorium on new Routt Oil and Gas permits.

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jerry carlton 2 years, 5 months ago

Need to get rid of Doug Monger at the next election then because his actions do not indicate he is worried about any of this. Bring back term limits!

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Fred Duckels 2 years, 5 months ago

Our governor wants one set of rules for everyone. Think of all the fun to be had by the politically ambitous and others clamoring for recognition, if each county makes it's own rules. This will be a circus for the technically ignorant and an opportunity for much mischief. We have a certain group displaying righteous indignation as coincidentally they do in most matters. Gravel pits, affordable housing, SB700, courthouse location to name some. This need for a cause wreaks havoc on working folks, spends money far beyond our means but lets the mostly imported get recognition with a possible entry into politics. I'm sure that the channels that we have used for generations will handle fracking safety, but may not accomodate those with ideological agendas. Stahoviak and Monger are relying on common sense that built the valley but it may not please the ideologues or the occasional spectator.

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Steve Lewis 2 years, 5 months ago

Or, we could have the same County control of oil and gas as we have over coal. That would be fair. If coal can deal with it, oil and gas can deal with it.

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Steve Lewis 2 years, 5 months ago

Pilot, On second thought, if you intend to cover this issue accurately, you will not be satisfied balancing a moderate Rodger Steen against Steve Lyndsey, Tisha Schuller, Robbie Guinn and Governor Hickenlooper.

Seriously. Take a look around at the voices of opposition others report:

"Environmentalists blast Colorado’s new drilling task force as Trojan horse."

http://coloradoindependent.com/114529/environmentalists-blast-colorados-new-drilling-task-force-as-trojan-horse

"The move follows heated debate at the capitol, where a Republican senator proposed empowering the state with sole regulatory authority over drilling. The proposal, HB 12-088, died in the Democrat-controlled Senate. A competing bill, introduced by a Democrat, would have assigned oil and gas regulatory power to local governments. It was killed in the GOP-controlled House."

“County land use regulations, ordinances and charter amendments empowered by the Colorado Constitution and upheld by the courts here and in New York, are the only means left for people to protect their communities from the excesses of an abusively powerful industry,” said Ceal Smith of the newly launched Coalition for a Clean Colorado."

“Two weeks ago, thousands of citizens spoke firmly against HB 12-088 and in favor of local regulatory authority over oil and gas activities. The governor’s executive order on fracking is a blatant attempt to circumvent the will of the people,” Smith said. “The communities most impacted have no voice or representation whatsoever on the governor’s hand-picked task force. We are frankly shocked by this autocratic assault on our democracy and community rights.”

“(The task force has) two slots for industry trade associations, but there is no place on the task force for a single conservation organization with on-the-ground expertise in the effect of drilling on local communities, air and water quality, fish, wildlife, noise and dust levels,” said Kate Zimmerman, the National Wildlife Federation’s senior policy adviser on public lands.

"The governor caused consternation among Colorado’s conservation community recently when in a radio advertisement for the Colorado Oil and Gas Association he said, “We have not had one instance of groundwater contamination associated with drilling and hydraulic fracturing.” More than a dozen environmental groups wrote him a letter to say his statement was misleading."

"Concerned about the effects hydraulic fracturing might have on residents, Boulder County, Longmont and Colorado Springs have temporarily halted drilling activity. Commerce City, Erie and Aurora, Arapahoe County, Douglas County, Elbert County and El Paso County have all either considered or are considering enacting their own drilling laws."

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Steve Lewis 2 years, 5 months ago

The Glenwood Springs newspaper supporting local control, opposite of Hickenlooper:

"Committee right to uphold local government authority" Post Independent Opinion, Glenwood Springs, Colorado CO

http://www.postindependent.com/article/20120217/VALLEYNEWS/120219908/1020&ParentProfile=1077

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Fred Duckels 2 years, 5 months ago

Steve, What expertise do you have in the oil patch? If you walked on a drill site would your body language identify you? I don't see how your ability to scan a computer qualifies you to indoctrinate the valley. Are you representating special interests here? As I previously predicted "we aint seen nothin yet".

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Steve Lewis 2 years, 5 months ago

Fred, Bradenhead. In that other thread, and my response to you:

"As a result, COGCC requested all oil & gas operators with wells within a half mile of the impacted water well to perform bradenhead tests. The bradenhead test performed at the Dupper #2 on October 1, 2009, indicated a hole in the production casing."

I have asked a career veteran of oil and gas environmental and testimony work for his recommendation on best steps. For one, he said since the biggest groundwater threat was well casing failures, every well should be regularly bradenhead tested.

Obviously its cheaper for oil and gas for you and Tisha Schuller to complain the problem is just one of "misinformation". Tisha is sooo fond of that attack. I guess actually searching for the Routt contaminations sources would eat into profits.

The link to the Sierra Club/Clean Water Action letter above has gone dead. Here is a link that works.

http://water.clean.home.comcast.net/~water.clean/SC-CWA-to-COGA-2-27-2012.pdf

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Fred Duckels 2 years, 5 months ago

Steve, My concern here is that I see a reinactment of the SB700 program to kill the project. So far it parallels, considering the flood of negative "we have to be careful" warnings to muster public support, WIll we see an effort to dictate, even over the decisions made by our elected representatives? Your efforts to date seem an attempt to scare the public, all the while camoflaged as a caring soul. Will time show us your real intentions to kill drilling at all costs? Steve, you fail to answer my questions as to your special interest connections. Are you a hired gun? Most folks I talk to haven't a clue as to what is transpiring behind the scenes, I am gaining ground, although many are fearful to be identified. In the future will we see county commissioners who basically serve at the pleasure of the Community Alliance? Will the elitist transplants eventually relegate the natives to the reservation?.

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Steve Lewis 2 years, 5 months ago

Repeating from the 2nd post to this thread:

  1. 44% of spills have impacted/contaminated (footnote2) groundwater.
  2. 2.8% of spills have impacted/contaminated surface water.
  3. 40% of spills have resulted in or been caused by berm failures.

The list above is:

An illusion, meant to scare. Fred Duckels is right. We should ignore the list and focus on the real problem - a cloaked conspiracy against big oil.

or,

The list comes from Colorado Oil and Gas C.Commission records, i.e. - Colorado State records for Weld County. Steve Lewis is right. We should expect similar problems in Routt County.

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