Gov. Jared Polis signed one of the legislative session’s biggest and most controversial bills Tuesday, remaking state regulation of oil and gas by giving local governments more control.
Polis said the measure will “end the oil and gas wars in Colorado.”
Supporters say it will improve Coloradans’ health and safety. Opponents say it will harm an industry that employs tens of thousands in the state and pumps billions into the economy.
Senate Bill 181, which took effect immediately, changes the Colorado Oil and Gas Conservation Commission, replacing two industry experts with one environmental specialist and an expert on public health. It also changes the panel’s mission, from being an industry cheerleader to putting public health and safety first.
Local governments now can weigh in on new oil and gas activity in their communities. Opponents say that will dramatically cut such development and its tax revenues, which support rural schools.
The Colorado Oil & Gas Association, a trade group, last month said the industry and its workers pay almost $1 billion in annual state taxes. The industry says it contributes $32 billion annually to the Colorado economy, including 89,000 direct and indirect jobs.
Polis told a packed room that the bill signing should end the back-and-forth ballot measures as well as “great uncertainty and political risk” for the industry. There will be “skirmishes,” he said, but those will be around specific projects in particular areas, and local decision makers such as city councils, mayors and county commissioners will be “deeply involved” as they would for any land use issue. Residents will be heard, and clearly health and safety will come first, including worker safety on the sites.
Front and center for the signing: Erin Martinez, formerly of Firestone, her two children and other family members. Martinez’s husband and brother died in 2017 when their home exploded because methane leaked into its basement from a cut gas line. Martinez had never spoken about the tragedy until SB 181’s first committee hearing.
The Colorado Petroleum Council later issued a statement criticizing a “threat to one of the foundations of Colorado’s economy.” The state’s energy future “is too important to be wielded as a partisan weapon, and all Coloradans deserve to know the consequences of this bill, both intended and unintended. While Senate Bill 181 remains deeply flawed, Governor Polis and state officials have pledged to work with industry to create a reasonable regulatory framework that works for all Coloradans, and we are committed to that process.”
The bill traveled through six committees, garnering more than 40 hours of hearings and public testimony and 33 amendments.
Sen. Mike Foote, D-Lafayette, was one of the bill’s sponsors. He noted that local government regulatory changes are optional, not mandatory.
Foote’s district includes Boulder County, which has sued the COGCC and several oil and gas companies to keep them from launching drilling operations in east Boulder County. Broomfield County residents also have sued to block oil and gas activity in their neighborhoods.
Supporters testified for dozens of hours that the industry needed tighter reins, as the Firestone explosion showed.
Now local governments can inspect oil and gas operations and impose fines for leaks, spills and emissions.
The law also changes “forced pooling” requirements. If owners of land and its mineral rights refused to sign leases to allow drilling for oil or gas, the previous law could force those owners to accept the leases.
SB 181, however, requires the consent of landowners who hold most mineral rights in a pooled area. Previously, only one mineral rights owner had to agree for the pooling to start.
The bill was amended dozens of times during its trip through the General Assembly. But it wasn’t enough to win over the industry, which “remains firmly opposed to this bill because it threatens one of the pillars of Colorado’s economy,” said a statement by the Colorado Oil and Gas Association and the Colorado Petroleum Council.
Colorado Rising, which backed last year’s failed Proposition 112 to push oil and gas drilling farther from buildings, said while the law “does not address all of the concerns and threats associated with industrial fracking activity, it is a desperately needed tipping back of enormously unbalanced scales … SB-181 is the most substantial shift we have seen in decades and puts communities on much better footing … ”
The bill passed on a party-line vote in the Senate and picked up four Democratic votes against it in the House, from Reps. Bri Buentello and Daneya Esgar, both of Pueblo; and Reps. Brianna Titone of Arvada and Don Valdez of La Jara.
Opponents are threatening recalls of lawmakers who voted for the bill, including Senate President Leroy Garcia of Pueblo and Rep. Rochelle Galindo, D-Greeley, and already are working on a ballot measure for 2020 to try to repeal the law.