Regulators Could Delay Dozens of Fracking Projects as Rule-Making Begins

Dozens of proposed fracking projects in north metro Denver and beyond could be put on hold for a year or more while regulators implement the state’s new oil and gas law.

The Colorado Oil and Gas Conservation Commission announced today, May 16, that it has finalized its “Objective Criteria” identifying which drilling permits will be subject to additional review by agency director Jeff Robbins during what is expected to be a lengthy rule-making process.

The final list gives Robbins and his staff broad authority to delay the approval of permits that meet any one of sixteen criteria, including applications to drill within any municipality, within 1,500 feet of an occupied building, and within floodplains and protected wildlife areas.

While many proposed drilling sites across the state, particularly those in rural Weld County, won't run afoul of the criteria, the agency's decision could further delay or block the approval of controversial projects in dense residential areas along the Front Range, including in Aurora, Broomfield, Commerce City and elsewhere.

It’s the first major — albeit temporary — policy shift in the new era of Colorado oil and gas law that has dawned following the passage of Senate Bill 181, the sweeping package of reforms signed into law by Governor Jared Polis last month.

“The finalization of the criteria is an important first step in implementing the new law and incorporating its public health, safety, welfare, environmental, and wildlife considerations,” Robbins said in a statement.

SB 181 gives Robbins the authority to delay the consideration of certain permit applications that "require additional analysis" to protect health and safety until a new, permanent set of protections required by the bill are put in place by COGCC regulators.

That rule-making process formally began this week, with a stakeholder meeting at the COGCC's Denver headquarters on Wednesday, May 15 — and if there were any doubts about how protracted and contentious the SB 181 implementation process will be, they were quickly dispelled.

Wednesday's meeting was the first step in a preliminary rule-making to address hearing procedures and other administrative minutiae before the commission undertakes a more comprehensive overhaul of drilling regulations — essentially, a meeting to discuss changing the rules for how to change the rules. It still drew a standing-room-only crowd, with industry groups and environmental activists trading barbs during and after the meeting. Activists hinted at coming litigation; industry reps accused them of "intimidation tactics."

The commission won't finalize this initial, narrow set of new rules until June 17, after which it can begin the real work of establishing new health and safety protections, a process that's expected to take at least a year to complete, and possibly longer. When the state legislature passed a more limited set of oil and gas reforms in 2007, it took more than two years before the ensuing set of COGCC rules went into effect.

Until new rules governing environmental impacts, flowline locations, abandoned wells and more are enacted, Robbins's criteria will be the primary tool by which the commission can implement SB 181's new focus on health and safety in oil and gas permitting. During the bill's required ten-day public comment period on the criteria, the commission received hundreds of comments from both environmental activists and industry supporters, but the final list issued Thursday is almost entirely unchanged from the draft version released last month.

"The Director and staff determined that in general the draft criteria appropriately captured the intent of SB 19-181," read a COGCC guidance document that was released along with the criteria.

It's unclear exactly how many permits will be put on hold, and the agency's guidance seeks to reassure operators by stressing that SB 181 "does not require" it to delay all permits that meet the criteria. Applications for nearly 400 new drilling locations and 150 changes to existing sites, encompassing a total of over 6,300 new wells, are currently pending before the commission — a backlog that even under normal circumstances could take years to process.

While implementation of SB 181 is likely to slow the approval process — the commission already postponed its April meeting following the bill's passage — it's clear that many of those pending permits, representing thousands of new wells, will continue to be green-lit by the commission concurrently with the upcoming rule-making process.

For many activists, that's not good enough. Anti-fracking group Colorado Rising and other environmental organizations urged the commission on Wednesday to stop issuing permits entirely until the new rules required by SB 181 are in place.

“Due to the passage of SB 181, state regulators are obligated to protect public health and safety in the permitting process," Anne Lee Foster, communications director for Colorado Rising, said in a statement. "That obligation extends to rule-making, and regulators need to pump the brakes on permitting before irreparable damage is done."

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