The oil and gas regulation debate is heating up at the state Capitol.

Fracking opponents want to let Colorado voters decide whether cities and counties can ban businesses that conflict with the health, safety or welfare of a community.

The ballot initiative is an attempt to get out in front of a legal challenge to hydraulic fracturing regulations in the City of Longmont.

Both the state and an oil and gas industry group sued Longmont saying the extraction of natural resources is a state-level issue not one a local jurisdiction could regulate.

The Community Rights Amendment - submitted Tuesday by a group that worked to ban fracking in Lafayette, Colo. - would add to the Colorado Constitution that as a right of self-government, municipalities could ban certain for-profit businesses.

Hydraulic fracturing is a process used to extract natural gas from bedrock by injecting water and chemicals at high-pressure into the ground.

Commonly called fracking, the practice has raised concerns among environmentalists about air quality, ground water contamination and earthquakes. The industry along with the Environmental Protection Agency, have said fracking is as safe as other drilling techniques.

On Wednesday lawmakers heard from the Air Quality Control Commission about proposed regulation for detecting leaks and maintaining storage takes by the oil and gas industry in an effort to decrease the emissions of methane and volatile organic compounds into the atmosphere.

Will Allison, director of the Division of Air Pollution Control, said the proposed regulations represent an important compromise between the industry and environmentalists that will particularly help reduce the emission of VOCs which can create harmful ground level ozone.

But Stan Dempsey, president of the Colorado Petroleum Association, told lawmakers negotiations turned private and some industry members weren't given a seat at the table.

One supporter of the regulations, named Lotus, who has no legal last name, said the amendment his group is proposing is not just about fracking but is a local rights issue that should transcend party lines.

"It's not just your basic rights but it's your health, it's your kids' health," said Lotus, chairman of Colorado Springs Citizens for Community Rights. "It's terribly important that local communities rather than a minority board of directors of a corporation determine what goes on in your local community."

Attorney General John Suthers who is representing the state in the lawsuit against Longmont said he doesn't believe in a patchwork quilt of regulations and there should be a statewide agreement when it comes to oil and gas regulation.

It's likely a debate that will be played out in the General Assembly this year, as Rep. Dickey Lee Hullinghorst, D-Denver, told reporters she is working on a bill to address the local control issue.

In addition to Lafayette and Longmont, three other communities have either banned or restricted fracking. Fort Collins, Broomfield and Boulder all approved regulations in November, although the Broomfield election results are being contested in court.

Rep. Jerry Sonnenberg, R-Sterling, had his approach to the issue shot down by Democrats in committee Wednesday.

He proposed a bill that would strip counties with fracking bans of their ability to receive revenue proceeds that are generated through severance taxes on the oil and gas industry.

Sonnenberg said half of the state's severance tax revenue is dolled out to counties based on a calculation of their oil and gas production and permits and county population. If a community bans fracking, Sonneberg's law would freeze their severance tax levels to the last calculation and not give the county any increase.

"The increase would actually go to the counties that utilize oil and gas production," Sonneberg said. "It's about doing the right thing with those severance tax dollars and sending them to those communities that need the help."

Rep. Jonathan Singer, D-Longmont, said the bill sounded punitive to communities like his that have banned fracking.

"My city has two lawsuits right now over local land use policy whether the state has control over it or whether the city does," Singer said.

He asked Sonnenberg if the bill would however strengthen the city's position in a lawsuit that it in-fact had the right to determine oil and gas issues because the state acknowledged that right in legislation.

House Bill 1064 died in a 7-6 vote with no Democrats supporting it.

Sonnenberg said he is thinking about bringing a ballot initiative with the same question to voters in 2014.

Meanwhile, the Community Rights Amendment still has a long way to go.

The proposed amendment was turned into the Colorado Legislative Council where it will be reviewed. A title must be set for the proposed amendment and then it must go to the secretary of state.

Lotus said they need to collect about 87,000 valid signatures from registered voters to get the issue on the ballot but hope to surpass 120,000 to be safe.

Contact Megan Schrader


Twitter: @CapitolSchrader