An oil rig is reflected in a puddle of water near the Yampa Valley Golf Course.

File photo

An oil rig is reflected in a puddle of water near the Yampa Valley Golf Course.

Oil and water

State seeks economic impact data, local officials call it bad process

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— The Colorado Oil and Gas Conservation Commission is listening to stakeholder comments on its proposed oil and gas lease rules, said Deb Frazier, Department of Natural Resources communication director.

To address one concern, Natural Resources mailed out cost/benefit information requests to all stakeholders - energy companies, governments officials, landowners and others - asking them to define the expected amount of money lost or gained under 14 different provisions, including proposed wildlife restrictions.

"We're ready and looking forward to listening and reading what they write," Frazier said. "All the people in those groups know those impacts well."

The Oil and Gas Commission debuted its proposed rules in March, which, if approved, will govern new and existing drilling applications.

The proposed rules add wildlife and public health restrictions on drilling. Moffat County officials said at the time, they disapprove of the rules because they felt the county had created its own guidelines that compromised between industry and the environment.

The new state rules would trump county and federal regulations, as well as existing contracts on private property.

Jeff Comstock, Moffat County Natural Resources Department director, presented the economic impact request to the county Land Use Board at its Monday night meeting. He received the request that day.

The Land Use Board - made up of residents and government officials - reacted with reservations.

"My first reaction when I read this was," Comstock said, "'Oh good, the (Oil and Gas) Commission listened to us and wants to get this in there.

"The more I got into it, I got wondering. When groups ask for the socioeconomic impacts, usually the one that proposed the new rules has to do the impact study. We certainly want to be part of this discussion, but I struggle to find numbers for some of this stuff."

Comstock referred to certain provisions in the state information request such as storm water management, chemical inventory lining of waste pits.

Marianna Raftopoulos - who is a consultant for Colorado Oil and Gas Association, an energy industry trade association - also attended the meeting as a guest.

If the state wants to ask local county governments about economic impacts, it should ask specifically for changes in different tax revenues, she said. The form sent to stakeholders is targeted to energy companies, and is not a good one-size-fits-all.

Raftopoulos added the Oil and Gas Commission should allow stakeholders more time to add up all the numbers. Comstock received the form Monday and responses are due to the Oil and Gas Commission on April 25.

"In 10 days," Raftopoulos said, "I don't know if we can get to the real numbers in such a short time. There's a lot of data to be gathered on this. Then, to put it into the correct format they want you to put it in, that's tough."

Land Use Board members recommended the county contact energy companies for some of the data.

"Somebody at EnCana (Oil and Gas USA) or some other place probably has tried to figure some of this out," said Steve Hinkemeyer, Land Use Board secretary. "I would think it's in their best interest to try and share this stuff. It's affecting their business."

Energy companies aren't talking about leaving the state because they're speculating about losses, Hinkemeyer said. He referred to an EnCana statement that it would not invest any money in Colorado in 2008, instead putting $500 million into Wyoming and Texas developments.

Bob Grub, who represents environmental interests on the Land Use Board, said the rules themselves aren't the problem. Colorado needs to protect its resources.

"The county's and the state's responsibility is to preserve the land and get as much as they can for it," Grub said. "It's not to sell it to the lowest bidder."

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