State approves new energy industry regulations |

State approves new energy industry regulations

Collin Smith

Moffat County Commissioner Tom Gray is hesitantly encouraged by information about new energy industry regulations passed by state officials Wednesday.

It seems the rules are not as burdensome as they could have been, he said, but it will take more research to see if there are any “devils in the details.”

The Colorado Oil and Gas Conservation Commission – which approves or denies drilling permits – approved final regulations to increase protections for wildlife and public health at a meeting in Denver this week.

The decision ended a process first started in 2007, when the state Legislature passed a bill directing Gov. Bill Ritter to create the regulations, which he deferred to the Oil and Gas Commission.

The rules have changed “starkly” since a draft was first released in March, said David Neslin, Oil and Gas Commission acting director, particularly those concerning wildlife.

Although the rules encompass other areas, wildlife protections have been Moffat County’s chief concern.

One particularly contentious proposal was to have mandatory drilling restrictions during certain times of the year, such as when mule deer enter their winter range habitat or during sage-grouse mating season early each year.

That regulation is gone, Neslin said.

Under previous drafts, energy companies would have been prohibited from drilling when those species entered seasonal habitats. Industry sources said such a regulation would be detrimental to Colorado business, while others – including the Division of Wildlife – said it was necessary to protect native species.

Those areas now are classified as sensitive wildlife habitats, and companies are required to consult with the DOW to work out an agreement that mitigates development impacts on animals.

In the case that companies and the DOW cannot reach an agreement, the Oil and Gas Commission will make a decision on how to proceed with drilling after hearing arguments from both sides.

With specific regard to sage-grouse mating grounds, also knows as leks, companies are prohibited from drilling within six-tenths of a mile from a lek, with one exception.

Companies can drill closer to mating grounds if it is technologically or economically infeasible to drill elsewhere, Neslin said.

Gray considered that significant.

“When you look at those known lek sites, a lot of them overlap each other (because of the six-tenths of a mile extension), and there are great swaths of land that would be unavailable” for drilling, he said.

However, he was bothered that the Oil and Gas Commission did not present an arrangement like the local Bureau of Land Management plan, which gives companies incentives to lessen their impact on the land and wildlife.

“If companies know the incentives going in, they get pretty innovative in finding ways to limit surface disturbance,” Gray said. “I think what we’ve had too much in the past – and what we need to get away from – is the head-butting between industry and government.”

Members of the state Legislature may agree with Gray’s last point, as they plan to review the now-approved regulations and make changes, if necessary.

Although Moffat County’s state legislators – Senator-elect Al White, R-Hayden, and Representative-elect Randy Baumgardner, R-Hot Sulphur Springs – said they have not had time to vet the rules, other Republicans are prepared to challenge what the Oil and Gas Commission released.

State Sen. Josh Penry, R-Grand Junction, said that while the rules may seem like more of a compromise for industry on the surface, they are materially the same as the “onerous” draft released in March. Such strict regulations could negatively impact a state economy already reeling from national problems.

He mentioned timing restrictions for wildlife habitat as an example.

While the original draft overtly stated that companies would be prohibited from drilling during certain times of the year, the final rules leave it up to a case-by-case review, Penry said.

The Oil and Gas Commission plans to defer implementation of the rules until April or May, which Neslin said was meant to give energy companies and his staff time to learn the procedures.

It also will give the Legislature time to review and make changes. When the original bill passed, it included an addendum that legislators would be allowed to review what the agency produced.

“In the spirit of Ronald Reagan, it’s trust, but verify,” Penry said. “So that is what we will do.”

Collin Smith can be reached at 875-1794 or