Legal services committee sends HB 1292 to House

Committee reviews new Oil and Gas Conservation Commission rules

— Anyone hoping to use the state legislature's annual rule review bill as a vehicle to modify new rules on oil and gas development in Colorado were stymied Friday by the chairwoman of the legislature's joint Committee on Legal Services.

Sen. Jennifer Veiga, D-Denver, held a tight rein on proceedings when the 10-member committee, made up of five members each from the House and Senate, met for more than eight hours to look at new rules from the Colorado Oil and Gas Conservation Commission that are scheduled to take effect next month on non-federal land.

In the end, after rejecting several Republican amendments, the committee approved 98 of the 100 new rules, sending two back to the commission for a re-write.

Acting COGCC Director David Neslin said a new rulemaking process would begin March 30 on the two that were rejected. One deals with who initiates the consultation process for wildlife protection, while the other involves a technical administrative procedure.

The committee then sent House Bill 1292 to the full House for debate, which could occur as early as this week. It is not yet known how much leeway lawmakers will have to amend the bill during floor debate.

Veiga repeatedly cautioned witnesses that her committee's work was about process, not policy.

Before the hearing started, Veiga distributed a bright orange card that stated in part: "Please keep in mind that the committee is charged with considering whether the rules are consistent with the statute authorizing their promulgation. Your testimony should focus on that issue and not on whether the rules are good or bad public policy."

Two bills passed by the General Assembly in 2007 authorized the COGCC to write new rules that balance oil and gas production with the protection of public health, environment and wildlife.

Even Natural Resources Department Director Harris Sherman was interrupted when he attempted to defend the 18-month rulemaking process and the resulting rules.

"We are not here to talk about whether this is good or bad policy," Veiga said.

Sherman and Neslin then concluded the rules are constitutional, do not conflict with any other state laws or regulations and "clearly were within the commission's broad authority to promulgate."

Veiga also cut off several Western Slope residents who attempted to testify about the adverse impact of natural gas drilling on their health and environment.

Industry representatives and the Republican members of the lawyer-heavy committee (seven of 10 members are attorneys) argued the commission exceeded its statutory authority in several areas, especially with regards to landowner consent, the appeals process and consultation powers given to the Colorado Division of Wildlife.

Rep. Bob Gardner, R-Colorado Springs, made several motions to reject rules that caused the most consternation to the industry, including a lengthy appeals process that gives greater voice to surface owners and other state agencies. All were rejected on a mostly party-line vote.

Gardner also tried to remove the May 1 effective date of the rules as they apply to federal lands. The rules are scheduled to go into effect April 1 for state and privately owned lands.

Neslin and Sherman said the state is working on a memorandum of understanding with the U.S. Bureau of Reclamation to meld the new rules with federal law.

"The application to federal lands is a matter of a great deal of controversy, especially with regards to the application of wildlife rules on federal lands," Gardner said. "Having a separate date for federal lands says we're applying the rules to federal lands but still taking time to ask the BLM which ones apply to them."

Veiga led the opposition to removing the effective date for federal land.

"I don't like the idea of leaving it up for grabs," she said. "We're better off having an understanding that the rules will apply to federal land and have some finality rather than deal with issues on a case-by-case basis."

Veiga said any policy changes to the rules would have to be made in individual bills.

However, the last of four bills attempting to tweak the new rules, especially as they applied to wildlife habitat protection, met its demise last week when Sen. Jim Isgar, D-Hesperus, asked the Senate Local Government and Energy Committee to kill his bill.

Senate Bill 229 would have required landowner consent before any conditions for wildlife protection could be imposed.

Related bills previously killed this session would have imposed a one-year moratorium on the implementation of the new rules (SB 4); weakened the habitat provisions with stronger protection for private property rights (HB 1255); and prevented the imposition of still newer rules on existing oil and gas operations (HB 1167).

Isgar pulled his bill before it ever got a hearing.

"Sometimes whenever everyone disagrees it's because you're getting a good compromise," Isgar said. "But in this case, the sides are so far apart, not only were they in disagreement, but they were all going to oppose it."

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