Spurning New Local Control Law, Aurora Approves Another Big Fracking Project

Colorado’s new oil and gas law was supposed to resolve the long-simmering conflicts between residents and drillers by finally granting local governments the authority to regulate industry operations. But so far, officials in at least one impacted community don’t seem very interested in exercising their new powers.

A plan to drill up to eighty new wells at four sites in east Aurora became the latest project to move forward in the early hours of Tuesday, July 16, after the Aurora City Council voted 6-4 to approve an operator agreement with Axis Exploration, a subsidiary of Denver-based Extraction Oil & Gas.

“There’s been a lot of effort, there’s been a lot of care, to protect Aurora, to protect the property rights of the people involved, to protect the jobs involved, and do as good a job as we can,” said council member Dave Gruber, who voted in favor of the agreement.

The Extraction proposal is the second major fracking project green-lit by the Aurora City Council in as many months, following the approval in June of an agreement with ConocoPhillips that could see over 300 new wells drilled at dozens of sites along the eastern edge of the Denver metro area. Council members also voted on Tuesday to approve an agreement for a separate “central gathering facility” to be operated by another Extraction subsidiary, Elevation Midstream.

“Our goal in Aurora will be to safely operate and responsibly produce natural resources in a manner that minimizes our impact and is beneficial to the community of Aurora,” David Schnabel, project manager for Extraction, told council members Monday night.

The operator agreements — binding legal contracts in which drillers commit to certain health, safety and environmental protections, or “best management practices” in industry parlance — had been in the works since last year. They’re a carryover from a previous era in local oil and gas policy, when cities like Aurora had little clearly-defined authority to regulate drilling, and instead turned to quasi-regulatory frameworks like operator agreements and comprehensive drilling plans to achieve a small degree of oversight.

But under Senate Bill 181, the long-awaited overhaul to state law passed by Democrats earlier this year, Colorado cities now have the authority to enact much stronger regulations of their own — and anti-fracking activists in Aurora are frustrated that their city council isn’t using it.

“They’re not using the full extent of their powers to protect residents,” says Sonia Skakich-Scrima, an activist with the group What the Frack?! Arapahoe, which she founded in 2011. “We’re very concerned because they’re proceeding pell-mell, full speed ahead, with really inadequate operator agreements that suggest that the operator use best management practices, but don’t demand it, as the law now allows.”

Supporters of the Extraction proposal defended the operator agreements as fulfilling the spirit of SB 181’s emphasis on local control, even if they don’t take full advantage of the new law's provisions.

“The documents themselves aren’t written by us, they’re written by experts, and are modeled from some of the best previous agreements throughout the country,” Gruber said.

Activists, however, called the council's timeline rushed — draft agreements were released just over two weeks prior to Monday's hearing — and criticized the lack of a public engagement process. Some council members echoed their concerns.

“I support operator agreements, I support best management practices,” said council member Nicole Johnston. “But I also, more importantly, support a community process as part of that. To not even have any feedback or neighborhood meetings, when we have that on every single policy that we do — we do that on re-zoning, on our animal services code, on the census. We have this robust community engagement, but we’re not doing that on this.”

Supporters of the Extraction agreement on Monday night also rebuffed activists' calls for a temporary moratorium on oil and gas development, a step that at least eight city and county governments across Colorado have taken since the passage of SB 181. Aurora is in the process of creating a new city department to oversee drilling, officials said earlier this month, and Johnston and other council members want to update the city's code to better regulate future development.

Three of the four Extraction sites in the agreement passed Tuesday have already been approved by state regulators at the Colorado Oil and Gas Conservation Commission, while the fourth, known as the Hammer Pad, is one of hundreds of locations in the agency's mounting backlog of applications, and could face further delays.

Extraction's plans for a fifth site in Aurora are the subject of an ongoing dispute between the company and the developers of the Aurora Highlands, a planned 23,000-home project south of Denver International Airport and an anchor of the "aerotropolis" vision endorsed by Denver Mayor Michael Hancock and other civic leaders. Those plans, located on a tract of land in Aurora known as Section 18, are a sign that land-use conflicts between the oil and gas industry and fast-growing residential communities along the Front Range aren't going away any time soon.

"We do not intend to drill on [Section] 18," Eric Jacobsen, Extraction's senior vice president of operations, told council members Monday night. "We are actively looking for an alternative location. We are a bit away from getting that done, but we fully intend to land that."

Along with other Extraction proposals in Commerce City, the fracking projects approved by Aurora this summer are some of the closest ever proposed to dense urban and suburban neighborhoods in central Denver, and two of the Extraction projects approved Tuesday will drill underneath Denver city limits, according to directional wellbore data filed with the COGCC.

Extraction is one of a handful of Colorado oil and gas operators that have led the industry's push to expand south from its traditional base in rural Weld County into communities in and around metro Denver. In addition to proposals in Commerce City and Aurora, it's also the operator behind a controversial 84-well project in Broomfield. In December 2017, an Extraction facility near Windsor was the site of a large explosion that injured one worker and shook nearby homes.

"We understand that we go into sensitive areas and operate," said Schnabel. "We never want anyone to think that we are not taking these operations very seriously, for the safety of the employees and contractors we have on location, but also, importantly, the safety of the people that live in the areas we operate."

As part of the operator agreement approved Tuesday, before starting to drill at any of the four planned sites, Extraction will hold community meetings with residents within a mile of the location. Much of the area surrounding the locations is undeveloped and sparsely populated, but that could soon change as Aurora's population continues to swell — something that Extraction representatives acknowledged in their presentation to council members Monday night.

Said Schnabel: "By developing these areas now, in an area where we recognize development is coming to the city of Aurora, we are able to enter the area, operate safely, and exit the area before residents and other development moves in."