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Attorney General warns El Paso County on proposed oil and gas regs

January 17, 2012

The Attorney General’s Office last week sent a letter warning El Paso County that its proposed oil and gas drilling regulations conflicted with state regulations.

The letter, dated Jan. 10, cited proposed rules on setbacks, excavations, water quality, wildlife, visual and noise impacts and permitting that it argued are in the purview of the Colorado Oil and Gas Conservation Commission.

“The county should reject the proposed rules discussed above as being in operational conflict with the (oil and gas commission’s) regulatory regime,” the letter concluded. “The county should reject the proposed rules discussed above for the additional reason that exhaustive local regulations are unnecessary.”

The proposed rules were unanimously adopted by the El Paso County Planning Commission Jan. 3 and are scheduled to be considered by the Board of County  Commissioners Jan. 31. It’s a hot topic for the county, since last year Houston-based Ultra Resources applied for several permits to drill in unincorporated El Paso County and Banning Lewis Ranch inside Colorado Springs.

Dave Neslin, director of the state oil and gas commission, said that forcing drillers to navigate a thicket of rules from local governments is not in the state’s best interest.

“Oil and gas activity occurs in approximately half of the state’s 64 counties and in dozens of cities and towns across the state,” Neslin said. “If each local jurisdiction adopts its own regulatory regime, the state will be left with a patchwork quilt of regulation that is inconsistent with the public interest and will unnecessarily impede the development of our energy resources.”

Amy Lathen, chairwoman of the El Paso County Commission, said the commissioners already have concerns over the proposed regulations and have discussed potential conflicts with county staff.

“We’re definitely going to look into the draft more,” she said. “We need to get it right.”

Lathen said one area that is clearly the county’s responsibility is dealing with the impact drilling would have on local roads and infrastructure.

“All of those roads are owned by the county taxpayers,” she said. “If you take 1,000 truck trips to put up one well, how are you going to mitigate that impact?”

Potential conflicts between local and state regulations were an important consideration in forming the proposed regulations, said Craig Dossey, project manager for El Paso County. It’s not always clear if a rule falls under land use, which would be the county’s responsibility, or covers the technical aspects of drilling, which would be under the state’s authority, he said.

“It’s not cut and dried,” Dossey said. “It’s not as clear as the industry, certainly, would like to portray it as being.”

Dossey said that the county plans to move ahead with the draft regulations as written, since any change would require going back through the planning commission process.

“At this point, we’re going to move forward with what we have,” he said. “If the board decides at that point they want to change it, then that’s what we’ll do.”

El Paso County spokesman Dave Rose said that if the county commissioners do not adopt the proposed regulations that the existing temporary land use permit process for oil and gas drilling will probably govern future exploration.

“If the board does not approve regulations at this time, the existing temporary land use permit for exploration will likely remain in effect and new applications for exploratory drilling would be reviewed through that process,” he said in an e-mail.

Tisha Conoly Schuller, president and CEO of the Colorado Oil and Gas Association, an industry trade group, said there are opportunities for local governments to address their concerns through the state’s regulatory process.

“There’s a lot of misinformation that if these things aren’t regulated at the county level, they aren’t regulated at all,” Schuller said.

Schuller said that if the regulatory climate becomes too burdensome, oil and gas companies will redirect their money and resources elsewhere, to the detriment of the local governments and schools that benefit from the taxes the industry pays.

Arapahoe County faced the same decision just two weeks ago. On Jan. 3, the county’s commissioners voted 3-2 to reject proposed regulations similar to El Paso County’s. Arapahoe County also received a letter from the Attorney General’s Office laying out similar areas of potential conflict that it saw in El Paso County’s draft regulations.

“This is not unique to any one locale. It’s something that’s happening across the state,” said Mike Saccone, communications director for the Attorney General’s Office.

Nancy Sharpe, chair of Arapahoe County’s Board of County Commissioners, said those areas of conflict were a concern for the commissioners and they decided the county’s goals with the regulation could be better addressed by working with the oil and gas commission. She said Arapahoe County will develop regulations on preferred road routes and historic preservation and will oversee drilling through access, building and soils permits.

“I think we came up with a good plan and that was No. 1 to be able to work with in the framework of the state oil and gas conservation commission,” Sharpe said. “It’s important for each county to look at their unique circumstances.”

Neslin said the oil and gas commission has worked with local governments in Gunnison County and elsewhere to address specific local concerns on issues such as inspections and hearings.

He said there is a place for county oversight in matters such as roads and transportation, but the state takes the lead in regulating the operational aspects of drilling.

“I think at the end of the day we all share the same objective, which is to ensure that these resources which we all utilize are developed in a responsible manner that protects public health and safety and the environment,” Neslin said.

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