Summary of The Colorado Oil and Gas Task Force Final Report

The Colorado Oil and Gas Task Force submitted its Final Report on February 27, 2015 making nine recommendations to the Governor that received two-thirds of the vote of the Task Force members as required by Executive Order 2014-005 to constitute recommendations of the Task Force.

1. Collaboration of local governments, the COGCC and Operators relative to oil and gas locations and urban planning.

    The Task force recommended that the COGCC should initiate rule-making to define and adopt a process of enhancing local government participation during the COGCC application for Permit to Drill process concerning locations of “Large Scale” oil and gas facilities in “Urban Mitigation Areas.” The recommendation contemplates giving local governments an opportunity to address location of right-of-way for pipelines, facility consolidation, access routes and mitigation measures within an Urban Mitigation Area and would require operators to consult with the local government. Operators would be required to indicate whether such consultation has taken place when submitting Form 2A, Oil and Gas Location Assessment, and to state whether there has been local government approval. A local government’s request concerning location should be based on an established set of reasonable standards or criteria. COGCC staff and local government liaison would be charged with convening meetings to consider alternative locations and encourage locations that consider distances between building units and/or high occupancy units. If a compromise cannot be reached, the Operator may offer to engage in mediation with the local government which process shall conclude within 45 days. If no agreement is reached, the COGCC will conduct a hearing and hear evidence from the local government, the Operator and the staff before the Oil and Gas Location Assessment may be approved.

2. Including future oil and gas drilling and production facilities in existing local comprehensive planning processes.

   The Task Force recommended that operators register with Local Government Designees (LGD), and upon the request of the LGD, submit operational information for purpose of incorporating potential oil and gas development into local comprehensive plans. The Operator would be required to provide the LGD a good faith estimate of the number of wells that the operator intends to drill in the next five years in the municipal jurisdiction, corresponding to the operator’s internal analysis of reserves classified as “proved undeveloped” for SEC reporting purposes, along with a map showing the location of the operator’s existing well sites and related production facilities, sites for which operator has made application for COGCC permits, and sites identified for development on the operator’s current drilling schedule for which it has not yet made application for COGCC permits. The plan may be changed at the operator’s sole discretion and shall be updated by the operator if materially altered. The Local Government Planning Department will prepare a comprehensive map of potential future drilling and production sites within its jurisdiction, and identify sites that it considers compatible with the current and planned future uses of the area, sites where minor issues may need to be resolved by negotiation, and sites where it anticipates significant conflicts with current and planned future uses as indicated in the Comprehensive Plan.

3. Enhancing Local Government Liaison and Local Government Designee Roles and Functions.

    The Task Force recommends the COGCC should undertake a review that would include outreach to local governments to better understand barriers to greater utilization of the LGD/LGL functions, enhancing education to local governments on how to engage the LGD/LGL process, expanding on LGD comment period on APDS and appropriate Conditions of Approval to 60 days, offering financial and other support to train LGDs, and apply for Energy and Mineral Impact Assistance Funds to assist local governments with the creation of LCD positions.

4. Increase COGCC full time staff, including inspectors, field operations, enforcement and permitting staff.

    The Task Force recommend the General Assembly should authorize COGCC to hire 12 additional full time employees to inspect wells, conduct environmental investigations and response actions, conduct intake of and track citizen complains, process permit applications, and perform data analysis to respond to data and information requests from the legislature, media, public, industry, and other stakeholders.

5. CDPHE staffing, a health complaint line, a human health risk assessment and a mobile air quality monitoring program.

    The Task Force supports the Colorado Department of Public Health and Environment’s (CDPHE) request to the General Assembly to convert five temporary employees to permanent status to continue its air monitoring and leak detection activities and to establish a health complaint and information line. The Task Force also encourages CDPE to seek funding for mobile air quality monitoring unit and funding to conduct a human health risk assessment in compliance with current scientific standards.

6. Creation of an Oil and Gas Information Clearinghouse

    The Task Force recommends the establishment of a clearinghouse on a user-friendly interactive website to communicate information regarding Colorado’s oil and gas industry that would be available to local governments, the general public, oil and gas operators and other interested persons, including information on permit review and consultation, drilling and completion practices, testing and monitoring practices, regulatory enforcement, repository of memorandums of understanding, and impact studies and analysis.

7. Recommendation to reduce truck traffic for oil and gas activities.

    The Task Force recommends that COGCC and CDOT take the lead to convene a working group to investigate any and all steps that can and should be taken by government and industry to reduce the use of large trucks and trailers in oil and gas activities.

8. Recommendation regarding air quality rules.

    The Task Force recommends the General Assembly continue the new state air quality regulations for oil and gas methane.

9. Compliance Assistance Program

    The Task Force recommends the COGCC should implement and emphasize a compliance assistance program to help operators comply with operating rules and policies, and to assure that inspectors are enforcing those rules and policies in a consistent manner.

The Minority Report. Other proposals considered but not receiving the two-thirds approval necessary to become recommendations of the Task Force are encompassed in the minority report, and include recommendations (1) to require residential drilling plans; (2) to coordinate Local government land use processes with issuance of state oil and gas permits; (3) to create a statutory oil and gas dispute resolution panel ; (4) to acknowledge local government siting authority; (5) to change standing and notice requirements (6) to allow local governments to assess fees to fund inspections and monitoring of the oil and gas industry; (7) to facilitate planning for oil and gas development and provide flexibility in locating wells; (8) to amend COGCC Rules and the Oil and Gas Conservation Act to acknowledge local government regulatory authority; (9) to enact legislation to improve the operational conflict preemption standard; (10) to clarify the balanced responsibilities of the Commission and acknowledge the important role of local government land use regulation; (11) to encourage the use of memoranda of understandings; (12) to amend comprehensive drilling plan rules to harmonize state and local authority; (13) to expand the statutory procedure for notification and consultation with mineral owners/lessees when significant surface development projects are being prepared for local land use approval; (14) to conduct a review of the negative health impacts from fracking and drilling, (15) to provide adequate compensation to affected surface owners; (16) to provide public disclosures of chemicals used in oil and gas operations and removing trade secret protections; (17) to require disclosure of hydraulic fracturing process; (18) to allow counties to regulate noise associated with oil and gas operations and to amend existing rules regulating noise; (19) to require down-gradient groundwater water quality and soil monitoring for oil and gas processing facilities; and (20) to delay further rulemaking in subject areas recently studied or which new rules have already been adopted.