June 24, 2008

Public Chimes in on Drilling Rules Decision on New Oil, Gas Policies Due in August

By Gargi Chakrabarty

Nearly 2,000 people crammed into the ornate Paramount Theater downtown Monday for a final opportunity to comment on Gov. Bill Ritter's efforts to overhaul oil and gas drilling rules.

More than 100 people spoke before Colorado Oil and Gas Conservation commissioners, whose staff is rewriting the rules. A final decision by the commission is scheduled Aug. 12. If commissioners approve the rules, most of them will take effect by Nov. 1.

State Sen. Chris Romer, D-Denver, urged the commission to narrow its focus to wildlife- and public health-related issues, given the short timeline.

"I really hope you focus on those two issues," Romer said.

He said later that proposed rules regarding fees, fines, bonds, local stakeholders and surface water were going beyond what the legislature had approved last year when it directed the commission to rewrite the rules.

"If you reach too far, everybody gets upset and you can't find a quality decision in the middle," Romer added.

For the past 10 months, the commission has been drafting rules aimed at mitigating the impact of drilling on communities and the environment. The commission this month held the first public hearing in Grand Junction, which drew an even larger crowd.

Harris Sherman, director of the Colorado Department of Natural Resources, which oversees the commission, promised Monday that public input would be considered in the final decision.

"It's not a popularity contest," Sherman told the audience. "There's no need to clap, there's no need to applaud and certainly no need to interrupt a speaker."

"No, Director Sherman, this is not a popularity contest," said Rep. Frank McNulty, R-Highlands Ranch. "These people are concerned about their jobs, about putting food on the table, about health care benefits."

Colorado's $23 billion oil and gas industry is fighting the proposed rules, warning that the uncertainty is driving companies to bypass Colorado and pour new investment - worth about $1 billion - into other states.

Two influential industry groups - the Colorado Oil and Gas Association and the Colorado Petroleum Association - launched a weeklong advertising campaign June 16 to denounce the proposed rules, claiming they would displace 10,714 jobs.

Ernest Moltrer and his brothers own Las Animas-based Purgatoire Valley Construction Inc., which employs a few hundred workers. The company hauls water for oil and gas operators, and builds pipelines and gravel roads.

In past months, Moltrer said he has received invitations from operators in Texas and North Dakota to relocate the business in those states because of the uncertainty in Colorado. A fourth- generation resident of the county, Moltrer said he doesn't want to leave - unless he's forced to make money somewhere else.

"I want my kids to graduate from Primero High School, the same high school as I did," he said. "The rules are going to force us to make a decision that I don't want to make."

The commission watered down the rules last Wednesday, saying it was "taking a more surgical, a more nuanced approach."

For instance, it clarified that companies that consult with the Colorado Division of Wildlife or develop a comprehensive drilling plan would not be subject to timing restrictions until January 2010.

Also, only operators on the Western Slope's Piceance Basin would have to install odor control devices on condensate tanks emitting a certain amount of pollution and in certain areas.

Josh Joswick, a former La Plata County commissioner who works with the San Juan Citizens Alliance, said his community has endured the social and environmental impacts of oil and gas development over the past 20 years.

"Water wells have been contaminated, houses have exploded and coal-seam fires have raged," Joswick said. "Every time there has been any county or state rule- making, we hear the same thing from the industry: 'This is going to drive us out of the county and the state.'

"And it hasn't. The industry only has prospered under new rules that have gone into effect."

Originally published by Gargi Chakrabarty, Rocky Mountain News.

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