Colorado Drilling Rules Would See Seismic Shift Under State Bill

(Bloomberg) -- Legislation being drafted in Colorado would prioritize health and safety over fostering oil and gas development, Governor Jared Polis and top state lawmakers said Thursday.

The bill, yet to be introduced, would represent a major shift in how the state regulates drilling.

It would propose amending the Colorado Oil and Gas Conservation Act to clarify that the mission of the state's Oil and Gas Conservation Commission is to regulate drilling and production activities, not foster development of fossil fuel resources.

“Right now, oil and gas laws in Colorado tilt heavily toward the industry,” said House Speaker KC Becker, a Democrat, who will be one of the co-sponsors of the bill. “We are going to correct that tilt so that health, safety, and environment are no longer ignored by state agencies.”

The bill will also give local communities a chance to provide meaningful input when permitting decisions are made about large oil and gas projects, Polis said.

“While we know this doesn't solve all of the problems our communities face, it is a practical approach to finding a solution for many of our issues and providing more stability by updating our laws to reflect today's realities,” he said.

The American Petroleum Institute said the decision by the state's lawmakers to draft a bill without input from the oil and gas industry is “unprecedented,” adding the group will study the legislation once it's available.

Health, Safety First

The bill would put health and safety first and take steps to fix what some see as a broken oil and gas regulatory system, Polis said at a news conference with Becker and other legislative leaders.

Lawmakers have told Bloomberg Environment the oil and gas proposal is one of the highest priority bills of the 2019 session of the Colorado General Assembly.

The legislation, which Becker said she hopes to introduce by March 4, would add a public health expert to the oil and gas commission.

It also proposes changing the state's “forced pooling” law, in which small tracts of land are combined -- often against the will of those owning the mineral rights -- to get a permit for drilling. Fifty percent of mineral owners would have to consent to the development. Current law forces all mineral owners to lease a parcel if just one in the area consents.

The bill would also give local governments more authority to regulate oil and gas operations including land use, siting, and surface impacts, and to establish setbacks between drilling operations and homes.

“This has the potential to be a major shift in the way the COGCC does business, but it all comes down to enforcement and execution,” according to Anne Lee Foster, spokeswoman for Colorado Rising, which pushed a failed November 2018 ballot measure that would have restricted fracking in Colorado.

To contact the reporter on this story: Catherine Traywick in Denver at ctraywick@bloomberg.net

To contact the editors responsible for this story: Anna Yukhananov at ayukhananov2@bloomberg.net, ;David Marino at dmarino4@bloomberg.net, Jeffrey Taylor