Colorado’s new oil, gas law ushered in new era — kind of - The Denver Post

A new state oil and gas law that was heralded as bringing the most sweeping changes ever to better protect public health has ushered in a new era. In some cases and some places.

Colorado, a major oil and gas producer, has what is considered the country’s strongest setback rule: a well site must be at least 2,000 feet back from homes and schools.

Tougher protections for air quality and wildlife, more stringent requirements for well construction and other changes in operations do apply apply to sites approved under the old rules. But permits approved before Jan.15 fall under the looser setback limits. And there are thousands of them.

“We’ve spent a year a half working on mission-change rules and now we’re still watching neighborhoods just get fracked over and over again. It’s really frustrating. People are disillusioned,” said Andrew Forkes-Gudmundson, deputy director of the League of Oil and Gas Impacted Coloradans.

Deciding where a well can be drilled and all the associated equipment can go is important, he added.

“There’s a new noise limit, which is great. But it doesn’t really help the people who feel like these wells are being drilled right in their backyard,” Forkes-Gudmundson said.

Helen H. Richardson, The Denver Post

A wall erected along Weld County Road 10 to protect some residents in the Colliers Hill subdivision in Erie from excess traffic around a drilling area is seen on May 17, 2021. Some residents in the neighborhood are upset about the recent and new drilling, pads and walls going up across the street.

However, applying the new rules on well locations retroactively to permits already approved would raise property rights issues, he added.

The 2019 law changed the mission of the Colorado Oil and Gas Conservation Commission. The COGCC went from balancing oil and gas development with protecting the public and environment to regulating the industry in a way that protects the public and the environment.

The COGCC and the state Air Quality Control Commission spent more than a year writing new rules and holding public hearings.

But the new rules don’t apply to the large well pads across the road from the Colliers Hill neighborhood in Erie. The sites, with a total of 28 wells, compressors, tanks and other equipment, were approved in 2017 and 2019, before the new rules took effect.

“I do think there’s an opportunity to at least learn from this experience,” Forkes-Gudmundson said

Perhaps the COGCC could consider allowing changes to a permit when conditions on the ground change before wells are drilled, he added.

When Sandra Duggan and Kelsey Barnholt bought their homes in Colliers Hill and moved in last year, the field, now an industrial site, looked like open space with a great view of the mountains.

“I’m from Chicago. I was showing my friends a tour out my back door and they were going, ‘Oh my god, look at that view,'” Barnholt said. “Now I’d be embarrassed to show them.”

Barnholt didn’t see her new home until she walked through it an hour before the closing. Duggan and her husband, Eric, drove from Seattle to see their house.

“The way the Colorado housing market is now, we had 24 hours to place an offer on the house,” Duggan said.

Occidental Petroleum is drilling the wells. Occidental spokeswoman Jennifer Brice said in an email that the company had hoped to complete the drilling, fracking and other work to get the wells flowing in early 2020, but hit pause when the pandemic hit. A number of companies put work on hold when oil prices plummeted and demand tanked after business and travel slowed because of COVID-19 restrictions.

In the meantime, Duggan and Barnholt moved in and more homes were built near the dormant well pads. Fracking and other work resumed in February.

“The you-didn’t-do-the-research crowd will say ‘You weren’t informed,’ ” Duggan said. “Unless you’re digging extremely thoroughly and know about the COGCC website and how to look up where oil pads are going to pop up next to your house, there’s no way to find out.”

Helen H. Richardson, The Denver Post

Sandra Duggan, left, and Kelsey Barnholt, right, are pictured across the street from a new drilling site along Weld County Road 10 across from their neighborhood in the Colliers Hill housing development in Erie on May 17, 2021.

“Boatload of permits”

Before Senate Bill 181 was introduced in  2019, the number of proposed and approved permits for well sites and individual wells were piling up. The backlog grew into the thousands leading up to a 2018 vote on a ballot measure that would have required setting wells back at least 2,500 feet from occupied buildings. Some local governments considered temporary freezes on new permits in the face of an anticipated rush to beat the potential new law.

The ballot measure failed. And there were more than 6,000 permit applications on the books by the end of 2018. Lawmakers who wanted stronger oil and gas regulations quickly made it clear that they would pursue legislation.

“The industry in 2018 started to feel the threat of real action being taken at the COGCC and either by ballot box, legislation or rulemaking. They applied for an absolute boatload of permits,” said Forkes-Gudmundson.

The previous minimum setback was 500 feet from homes As with the new regulations, companies could request exceptions to the setbacks under certain conditions. Separate permits are required for the location of the well site, or pad, and individual wells drilled on the site.

The industry fretted whether permits would be delayed while the new rules were drafted, but proponents of tougher rules called for a hold on all permits until SB 181 was fully implemented. The COGCC paused approvals to draft interim guidelines intended to carry out the spirit of the new law while permanent regulations were developed.

Legislators said SB 181 was never intended as a moratorium on new drilling and defended the COGCC’s decision to approve permits before the new rules were finalized.

RJ Sangosti, The Denver Post

Jeff Robbins, Director of The Colorado Oil and Gas Conservation Commission, in 2020.

Jeff Robbins, chairman of the state commission, said there might be a perception that permits approved  before the new rules kicked in “got through the process.”

“My perspective on that is that’s not the case,” Robbins said. “It just gets back to what was the legislative mandate from (SB)181.”

Legislators didn’t want to see a moratorium on new oil and gas locations, Robbins added. “Nor did they want to see them get a free pass and get approved.”

The state approved 336 permits for well-pad locations and 2,713 permits for individual wells between May 19, 2019, and Jan. 14, 2021. Certain locations didn’t get the go-ahead and were put on hold, Robbins said.

Wells on a northwest Adams County site were among those approved after the new rules were written but before they took effect in January. Area residents said it’s unfair that the wells will be closer to their homes than what’s allowed under the updated regulations. The well pad’s location was approved in 2018.

“But the drilling, they put it off and put it off. Now there’s a new subdivision going in here called East Creek Farms that Thornton annexed,” Christine Nyholm said. She and other members of the group Adams County Communities for Drilling Accountability Now are concerned the new homes will be closer than 2,000 to the well pad.

The permits for the individual wells weren’t approved until November 2020. The operator, Great Western Petroleum, has said its plans include air-quality monitoring and measures to reduce noise, odors and threats to nearby Big Dry Creek.

Nyholm believes that under the expanded powers granted by SB 181 to local governments to regulate oil and gas, Adams County could make a good case to the state that the new, stronger protections should prevail. The community group is suing the COGCC, Great Western and Adams County to see that they do.

Helen H. Richardson, The Denver Post

Work continues at the playground in North Creek Farms Park in Thornton on May 19, 2021. Great Western Petroleum is in the process of plugging an abandoned well site that was underneath the park.

Unearthing a well

For a neighborhood in north Thornton, it’s not a new well site that’s creating consternation. Great Western is reclaiming a well that was shut down and plugged by another company in 2005.

Area homeowners were surprised when they learned that the well, which is underneath a neighborhood park and playground that is ringed by houses, would be unearthed.

“This is heavily utilized, especially during COVID. This is the place to go where it’s safe,” said Stacy Lambright, standing with neighbors in North Creek Farms Park a few weeks before the digging began.

Now, the park is fenced off. Big trucks and other equipment have been on site. Walls were put up to block noise and a basketball court was dug up.

State regulations, including ones approved under SB 181, require that older wells be brought up to the latest standards when new wells are being drilled within a certain radius. A Great Western well pad, the one being contested by Adams County Communities for Drilling Accountability Now, is about 1.35 miles away.

“With the new rules, operators like Great Western are going in and reclaiming older wells to put cement into a greater depth,” said company spokeswoman Susan Fakharzadeh. .

The concrete casing is meant to protect groundwater. Fakharzadeh said there were no problems with the well. The goal is to reclaim the area and rebuild the basketball court no later than June 14.

Helen H. Richardson, The Denver Post

A closed sign keeps people out of North Creek Farms Park in Thornton on May 19, 2021.

The neighborhood is an example of where homes were built ever closer to existing oil and gas wells. People complained of nosebleeds and other health problems when an underground line at another old well in the subdivision started leaking.

Forkes-Gudmundson said some cities and counties are exploring reverse setbacks, which are restrictions on how close new homes and other buildings can be from an existing well site. He said one idea is to eventually allow the setback to shrink because the biggest impacts from oil and gas occur during initial preparations and production

The new oil and gas regulations allow for more input from neighboring governments when a city or county is considering oil and gas development. In the case of Colliers Hill, the subdivision is in Erie but the well pads on the other side of the road are in Weld County. Homeowners said it’s not clear who they can appeal to when work at the site creates noise, odors and, in the case of recent work, disturbance to the point that pictures on the walls rattled and shook.

Weld County and the COGCC officials said Occidental is complying with the regulations. Jason Maxey, director of the Weld County oil and gas energy department, said inspectors visit the site. He said the county has worked with Erie, which reviewed one of the permits the company needed to access the site.

“It’s only the COGCC and Weld County that can enforce any of the regulations that were in place in 2019 when that permit was issued,” said Christiaan van Woudenberg, on the Erie Board of Trustees.

The board recently voted to contract with independent contractors to collect and analyze data on emissions coming from the well pads. Two hundred residents signed a petition asking for the monitoring after people complained of headaches, dizziness and respiratory problems.

Van Woudenberg expressed frustration that communities often hear there is no recourse when residents complain about drilling in their neighborhood and have to pay for any additional testing and monitoring.

“The fact of the matter is that the path by which we got here was legal at every step of the way, but that doesn’t make it right,” he said.

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