Colo. drilling advances prompt escalating fight

Oil, gas companies creep closer to neighborhoods

In the past, Colorado has seen most of its oil and gas drilling occur in rural areas. These days, it’s getting closer to urban areas, threatening water resources and neighborhoods. Politicians, though, are backing the oil companies in their attempt to drill closer to towns, citing employment and profitability. Enlarge photo

ED ANDRIESKI/Associated Press

In the past, Colorado has seen most of its oil and gas drilling occur in rural areas. These days, it’s getting closer to urban areas, threatening water resources and neighborhoods. Politicians, though, are backing the oil companies in their attempt to drill closer to towns, citing employment and profitability.

DENVER – New technology is putting oil and gas drills closer to populated areas than ever before – creating tension in Colorado over who regulates where drilling can and can’t be done.

The escalating dilemma has state lawmakers considering whether to step into a standoff between energy companies and Colorado communities as the oil and gas industry creeps ever closer to neighborhoods, schools and streams.

Local governments concerned with what they see as encroachment in the forms of horizontal drilling and fracking have responded by imposing new regulations on drilling rigs.

The industry cried foul, prompting Attorney General John Suthers, a Republican, to warn Arapahoe and El Paso counties along Colorado’s densely populated Front Range to back off.

Suthers, writing on behalf of the Colorado Oil & Gas Conservation Commission, which oversees state rules, told Arapahoe County that “responsible government requires uniform regulation” – in other words, that the state had jurisdiction and local officials couldn’t go their own way.

Arapahoe officials changed course. And El Paso’s county commission is expected to make a decision this month.

Politicians from both parties have suggested that they’ll rally to the side of the energy companies, which employ about 190,000 people in Colorado and contribute more than $18 billion a year to the state economy, according to industry estimates.

Democratic Gov. John Hickenlooper, a geologist, said in his State of the State address that his administration would work with various counties to soothe tensions.

“The state can’t have 64 or even more different sets of rules” for drilling, Hickenlooper said.

Republican House Speaker Frank McNulty hinted at the same in his opening remarks to his chamber.

“While we do respect local control, we understand that there are areas that have historically been the responsibility of the state, including the development of traditional energy,” McNulty said. “This session, we will fight to preserve the historic relationship between the state of Colorado and energy development.”

The head of the oil and gas commission, Dave Neslin, said local regulations “impede the responsible and balanced development of our oil and gas industry.”

State primacy in drilling regulation won’t be an easy sell, though.

Already, some Democratic lawmakers are talking about legislation to give local governments more say over drilling in their jurisdictions.

Democratic Rep. Matt Jones of Louisville is one of them. Jones said drilling has been proposed within 350 feet of schools in his district and that existing regulations need an update because of new technology.

“It’s good to have jobs. It’s good to have energy from natural gas. We just need to do it responsibly, and the local governments need to be involved,” Jones said.

Another Democrat, Aurora Rep. Su Ryden, has proposed a bill increasing the statewide drilling setback from 350 feet to 1,000 feet.

One powerful lobby at the state Capitol, the group Colorado Counties Inc., is watching closely.

“Whenever the state starts talking about pre-empting local control, it always gets us concerned,” said CCI’s legislative coordinator, Andy Karsian. He predicted “strong push-back” if McNulty or other lawmakers introduce a bill to strengthen state authority over drilling rules.

“We have specific authority ... to regulate the land within our jurisdictions,” Karsian said.

Tisha Schuller, president and CEO of the Colorado Oil and Gas Association, a trade association, argues that local governments can’t dictate drilling rules. She said her group would reach out to local governments to soothe tensions and hold monthly meetings “so they understand the limits of what their authority is.”

Some governments are too quick to try to regulate drilling before energy companies have decided to drill commercially, Schuller said.

“Some of this rush could close down exploration activity pre-emptively,” she added.

Neslin, of the oil and gas commission, said the agency is seeking state funding for two additional positions called “local government liaisons.” He said he hopes that increased communication with the industry will placate local governments and convince lawmakers that new laws aren’t needed.

“There are multiple opportunities for local governments to participate” without a new law, he said.