Showdown looms over drilling
The Colorado Oil and Gas Conservation Commission on July 30 filed suit against the city of Longmont, claiming an ordinance recently passed by the city would "undermine" the state's role in regulating the oil and gas industry. The complaint was filed in Boulder County District Court by the state Attorney General's office, which is acting on behalf of the commission.
The ordinance cites the dramatic increase in the number of wells in Colorado, concerns about the safety of chemicals used in hydraulic fracturing, or fracking, and possible health impacts.
The state finds several provisions of the ordinance objectionable, including provisions that would exclude drilling from residential areas and require companies to use directional drilling and consolidate drilling operations.
"The city council has very publicly stated time and time again it's acting in the best interests of the community," Longmont public information officer Rigo Leal said.
Whatever the motives, the state does not believe Longmont has the authority to act. Its underlying argument is its belief that the General Assembly has given the nine-member commission exclusive authority to regulate drilling operations.
The commission has a mandate to protect Colorado residents while promoting "efficient and orderly development of a resource all citizens depend upon," Colorado Department of Natural Resources executive director Mike King said in a statement explaining the suit.
Ordinances such as Longmont's would undermine and complicate the regulatory process, create "a tangled patchwork of rules" and hamper job growth, King wrote.
The legal dispute between Longmont and the state highlights how different communities approach regulations.
Longmont, like Boulder County, Broomfield and the town of Erie, sit near the edge of the Greater Wattenberg Area, an oil and natural gas field that is the most productive in the state. Natural-gas drillers have become increasingly interested in the area, and that is leading some communities to take a look at drilling and land-use regulations.
Boulder County is updating its land-use codes and regulations with natural-gas policies in mind, said Pete Fogg, planning division manager in the county land-use department.
The county has placed a moratorium on issuing new permits that runs through Feb. 4, giving the staff some time to come to grips with the issue, Fogg said.
The county is operating under the belief that it lacks the jurisdiction to regulate how wells operate, including whether or not drillers can use hydraulic fracturing.
"What goes down underground is, to my knowledge, definitely out of our jurisdiction," Fogg said.
The county has formed that opinion based on court cases and consultations with the state oil and gas commission, he said.
"We have clear authority to regulate land-use-related issues, such as visual impact, fencing and access routes," Fogg said. "The state has pretty much sole authority over operations, which is pretty much everything from the wellhead down."
The distinction gives local governments some ability to enact noise limits and truck access, but the state can review and overrule the regulations if it finds they were established to limit how the well operated below ground, Fogg said.
Fogg noted that policy guides created by the state have specifically addressed the home-rule issue and made clear that home-rule communities lack the standing to prohibit drilling. Local governments and Colorado residents can petition state lawmakers and regulators for law and policy changes, Fogg said.
Fogg said there are about 345 "active permits" in Boulder County, which he defined as wells that have been permitted and are in some stage of construction or operation.
"We know that there are some operators who are waiting" for permits, Fogg said, "but we honestly don't know how many."
Fogg does not believe the impact will be as profound in Boulder County as it has been elsewhere because the county is close to the fringe of the gas-producing formation.
Erie is taking a different approach, one that town officials believe will not cross legal boundaries but will lead to satisfactory results for residents and well operators.
The town has seen a controversy emerge in recent months over drilling in the Canyon Creek area, which is near three schools. Protesters have held rallies trying to stop drilling, including a small one at the Denver offices of Encana Corp., which operates the wells.
Erie is trying to work out memorandums of understanding with natural-gas companies such as Encana to commit them to regulations more stringent than state policies, town spokesman Fred Diehl said.
The town is not attempting to regulate how wells operate below the surface. "We recognize it's a matter of state concern," Diehl said. "That's where the authority rests."
One front on which Erie has made progress is limiting the amount of truck traffic, especially around schools, Diehl said. The town also wants companies to commit to using technology that will prevent volatile air compounds from escaping into the atmosphere. That will improve air quality, Diehl said.
Town officials are optimistic they can reach agreements with Encana and Anadarko Petroleum Corp., the major well operators in Erie, Diehl said. The town board is likely to receive an update on the talks in early August.
Encana favors that approach when it comes to matters within a local government's jurisdiction, Encana community relations adviser Wendy Wiedenbeck said.
"It would always be our preference to work directly with a municipality to work out an agreement," Wiedenbeck said.
In some cases, such as setback from property lines and operating scheduling, Encana exceeds state requirements, she said.
Wiedenbeck would not address whether Encana would negotiate with a local government about whether or not it would use fracking within its borders. Instead, she reiterated Encana's view that research and history has shown that when done properly, hydraulic fracturing is safe.
"It is a safe and proven process that allows effective development of the resources while protecting water sources," Wiedenbeck said. "Colorado has some of the strictest regulations in the nation."
While the controversy over drilling and fracking is roiling in Boulder County, it has largely bypassed Broomfield, where 92 wells are operating, according to the state.
Tami Yellico, deputy attorney for the city and county of Broomfield, declined to speculate why that was so, but the county is watching what is going on in neighboring Boulder and Weld counties.
"We're watching what other communities are doing," Yellico said, "but we haven't had any specific discussions with our city council."
In Broomfield, site plans for each well operation have to be approved in public hearings by the planning and zoning commission and city council. The city last made significant changes to the regulations in 1995 and added a minor revision in 2011, she said.
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