oil and gas

An oil pump jack near a home in Frederick in Weld County.

The oil and gas industry as well as its perennial antagonists in the environmental movement are waxing hopeful — at least their press statements — about sweeping rule changes for energy exploration adopted this week by the reinvented Colorado Oil and Gas Conservation Commission.

If each side is masking its true feelings, it is of course for opposite reasons. For the environmentalists — for whom the only good well is a capped well — almost any regulatory regime that falls short of shutting down the second-largest sector of the state’s economy is inadequate. Nothing new there.

As for the industry, however, it knows as never before that it’s staring down the barrel of a loaded shotgun. On the butt end is a political establishment fundamentally tilted against it, maybe forevermore. Consider the key players: Gov. Jared Polis; his fellow Democrats controlling both chambers of the Legislature; their legislative handiwork in reconfiguring the lineup and the mission of the oil and gas commission, and now the edicts of the born-again commission. All have conspired to create what lawyers might call a “hostile work environment” for oil and gas.

Thus, Colorado Oil and Gas Association President Dan Haley’s public statement issued after the rule rewrite:

“Colorado now undoubtedly has the toughest oil and natural gas development regulations in the country, which further protect the environment and ensure that the molecules of energy produced here locally are cleaner than most anywhere in the world. ... We have full confidence that operators will show how future development will be protective of public health and safety, and we’re hopeful the commissioners’ judgment will be based on what is necessary and reasonable, rather than the precautionary principle alone.”

Our translation (with apologies to Haley): Fossil fuel extraction in Colorado couldn’t get cleaner or safer at this point if you sucked it out the ground with a medical-grade syringe and dispensed it with an eyedropper. The industry has been run through a wringer. You’ve squeezed out plenty of high-paying jobs and high-dollar exploration investment. You’ve crippled us, but those of us who remain will carry on. Please just don’t make things even worse.

Then again, the commission is leaving itself lots of wiggle room to do just that. It’s one thing to pass rules and another to implement them, subjectively applying them as a commission to each new drilling application it reviews. And as reported by the Denver Gazette, the rules will apply to existing and pending permits, which is estimated at 5,000. All will have to be refiled. Never mind the extra red tape; the leeway for commission mischief is more troubling.

The new rules are being touted by supporters to offer “environmental justice” to communities that, according to the authors, lacked input into commission decisions in the past. The rules also purport to create more transparency.

More significantly, they establish some exceptions to a strict new 2,000-foot setback rule adopted in September — a measure that has the potential to render a significant amount of Colorado’s abundant oil and gas off limits.

The exceptions allow drillers a way out of the unrealistic and unworkable setbacks if: a well is within an approved comprehensive drilling plan or area plan; drilling equipment emitting the greatest noise and emissions is placed more than 2,000 feet away from the nearest development; the commission finds after a public hearing that the operator has taken “substantially equivalent” protections for health and safety; or affected property owners or tenants have signed a waiver.

If those exceptions are considered in earnest by commissioners as they reassess drilling permits — at this point, a big if — it does seem to offer something of a reprieve to an industry that had been facing the executioner.

Commission Chair Jeff Robbins affirmed to the press and public, “The commission didn’t create those off-ramps for operators not to use them.”

Perhaps that is the ray of hope buoying the industry at the moment.

On the other hand, this is the same commission whose staff circulated an email just last week mocking the industry it regulates — and inadvertently sent the snide missive to some employees of the industry. Could that same disdain conceivably influence every decision where the commissioners — and the staff input to them — enjoy latitude in assessing a permit?

We’ll be watching closely how the new rules are applied. Pending that, Colorado’s oil and gas industry, which contributes about $19 billion to the state economy and $1 billion in local taxes, remains very much on the bubble.

The Gazette Editorial Board

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