Commissioner to energy company: 'We’re scared of you'

DEBBIE KELLEY Updated: October 24, 2011 at 12:00 am • Published: October 24, 2011

Changes that El Paso County leaders approved last week to allow a large-scale energy development company to start wildcatting, or exploratory drilling for oil and gas, caught some people off guard.

“I was very surprised at the decision,” said Mary Talbott, who has spoken on the topic at several county meetings and describes herself as a “concerned citizen.”

County commissioners decided to make an exception to a temporary ban on exploratory drilling — and the way in which it was handled rankled Judy Von Ahlefeldt, an outspoken critic of the energy industry’s drilling plans and who has attended every meeting on the topic, except Thursday’s.

“It smells pretty rotten to me. They waited until the last minute to put it on the agenda. Now we’re going to have fracking with administrative approval with no public notice and public hearing,” she said Monday. “That really sucks.”

County commissioners in late September stopped accepting new permits for exploratory drilling for four months, to give the county more time to write local land use regulations.

On Thursday, they approved changes that will enable Ultra Resources, part of Houston-based Ultra Petroleum, to drill as early as December.

Ultra, which recently bought 18,000 acres of the Banning Lewis Ranch for oil and gas exploration, plans to drill three vertical wells on Colorado State Land Board property in the south-central part of the county, south of Peyton and southeast of the Banning Lewis Ranch.

But the way the seeming reversal of the moratorium came about has angered some who have called for strict local control over the industry.  

Instead of being listed as a separate entry, the proposal was on the consent calendar on Thursday’s agenda. Consent items are grouped together for approval and not discussed individually unless a commissioner requests discussion. That was a mistake, according to county officials.  

“I don’t think it was ever intended to be a consent calendar item,” said County Attorney Bill Louis.

The item also was added as an “addendum,” after the agenda had been issued days before. It was included in time for the mandatory 24-hour public posting, County Administrator Jeff Greene said.

The addendum was posted next to the regular agenda in a glass case in front of the county administration building at 27 E. Vermijo Ave., but not on the county web site, like the regular agenda.

“The oil and gas amended resolution should never have been treated as an addendum,” Greene said.

What Greene called “a miscommunication” occurred between the county attorney’s office and the development services department, which he said resulted in the confusion.

“There was no intention to do anything not to keep this public,” Greene said. “The commissioners wanted to act expeditiously to restore an activity that was allowable prior to the suspension.”

The proposed changes to the moratorium to allow Ultra to drill remained on the consent calendar and were approved at the onset of Thursday’s meeting.

Then, some six hours later, after finishing with the regular agenda, commissioners reopened the issue, talked with representatives from Ultra, and changed the proposal again to allow for hydraulic fracturing.

The controversial process involves injecting large volumes of water and chemicals into a bore to release trapped gas or oil. Full-scale production is still banned in the county until late January, when new regulations are expected to be in place and the moratorium is expected to be lifted.

“It wasn’t meant to fool anyone,” Louis said of the snafus. “We created a very narrow exception (in the moratorium) for one particular company.”

Louis said the item would have been pulled from the consent calendar for discussion in the morning, but Ultra officials hadn’t yet arrived at the meeting.

The Colorado Oil and Gas Conservation Commission, which licenses and regulates the industry and criticized the moratorium, didn’t pressure the county to reconsider the suspension, said George Monsson, a senior assistant county attorney who specializes in energy exploration.

But Ultra did.

Ultra contacted the county immediately after it issued the moratorium “to express concern that the initial moratorium was overbroad and worked too great of a hardship on them,” Louis said.

Earlier this year, Ultra acquired a permit from the state to drill here by buying all the interests of another company in El Paso County, including mineral leases on state Land Board property. That permit expires in November.

Ultra officials told the county they would have to restart the process if they were unable to apply with the county for permitting.

“Given that Ultra was the only company put in peril of having to start the permitting process over as a result of the moratorium, the request to bring a narrow exception to the board seemed reasonable,” Louis said.

Monsson said each exploratory well will cost Ultra $4 million to $6 million. More than 100 wells have been drilled for exploration in the county over the years, but there hasn’t been any commercial production of oil or gas.

“Clearly they’ve got enough confidence to drill and test,” Monsson said.

Talbott said, despite the lack of local regulations, she hopes the county monitors environmental and safety concerns.

“I hope they’re going to require baseline water sampling, air quality monitoring, a list of chemicals used in the process, the water source and waste disposal, while the rules are being finalized,” she said.

Monsson said county planners have the leeway to address impacts to roads and other natural resources, such as water, under current policy.

Von Ahlefeldt, though, is afraid the commissioners have “opened a Pandora’s box.”

“I’m very aghast at what they’ve done,” she said. “There obviously was pressure to move forward despite the fact that the county is not ready.”

At Thursday’s meeting, Commissioner Dennis Hisey sought assurances from Ultra officials that they would address concerns people have expressed in numerous public meetings on the topic.  

“Quite frankly, we’re scared of you,” he said, urging the company to be forthcoming about its drilling practices.

Oil and gas work session

County commissioners will hold a public work session with Dave Neslin, executive director of the Colorado Oil and Gas Conservation Commission at 2 p.m. Thursday at Pikes Peak Regional Development Center, 2880 International Circle. Neslin will provide an overview of state oil and gas regulations.

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