Bill overhauling Colorado‘s oil, gas industry passes state Senate committee, moves to next vote

After a 12-hour public hearing, a legislative committee early Wednesday morning approved a bill that would dramatically overhaul how Colorado regulates the oil and gas industry.

Nearly 400 people signed up to speak on the bill by Senate Majority Leader Steve Fenberg and fellow Democrat House Speaker KC Becker. Starting at 2 p.m. Tuesday, the Senate Transportation and Energy Committee heard from alternating panels of opponents and proponents, including people testifying via video from Grand Junction, Durango, Montrose and other sites.

After the testimony wrapped up slightly before 2 a.m. Wednesday, the committee passed the bill 4-3, with the Democrats voting for it and the Republicans voting against it.which the oil and gas industry sees as a threat and proponents see as a lifeline, now goes to the Senate Finance Committee, possibly later this week.

Several hundred oil and gas employees and supporters rallied on the capitol steps before the hearing to voice their opposition to the proposal. A small group of the bill‘s proponents gathered for a news conference inside.

During the hearing, opponents of the bill urged the committee to at least slow down and give people more time to review the 27-page bill, which was introduced late last week. Fenberg said there will be five more hearings on the legislation as well as debate in the full House and Senate, providing opportunities for changes and for people to weigh in.

“Is the bill perfect right now? No, it is not. Does it solve every problem? No. Is it crystal clear in every way? We have been told it is not. So we will work on this bill,” said Fenberg who offered tweaks and clarifying language before the committee voted.

But Fenberg said for him, it‘s non-negotiable to dilute the bill‘s main thrust – prioritizing protection of public health and safety and the environment when considering oil and gas development.

A fundamental change proposed by the legislation is the rewriting of the role of the Colorado Oil and Gas Conservation Commission, the main regulatory body. It would make health and safety the priority when considering development.

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Currently, the commission has a dual role of regulating the industry while also fostering development.

Another significant change would give cities and counties the authority to apply their planning and land-use powers to regulate oil and gas development in their borders. The extent of local governments‘ say has been at the heart of conflicts, lawsuits and ballot proposals as oil and gas companies have moved into residential areas along Colorado‘s Front Range.

“I think the bill lays out the framework that industry can absolutely live within and be successful, but still know what the rules of the road are,” Fenberg said.

He defended the legislation against charges that he and Becker shut out interest groups leading up to introduction of the bill March 1. Fenberg said several organizations, companies, state staffers and others were asked for input, but that no interest groups saw the bill‘s language before it was released.

Fenberg also disputed complaints that the legislation will hobble the industry or empower local governments to ban drilling. He said local regulations would have to be reasonable or they could be challenged.

“The reality is this, if we wanted to shut down the industry we wouldn‘t have wasted the ink to draft the 27 pages that are in this bill,” Fenberg said. “We wouldn‘t have created a new regulatory framework that creates clarity and consistency for the future. We would‘ve just said this is a moratorium.”

But industry representatives and oil and gas workers said provisions in the bill, including giving local governments control over siting wells, inspections and other activities, will threaten the industry‘s existence if cities and counties approve stringent rules or try to keep out drilling altogether. They said the legislation poses the same kind of threat – or worse – as an initiative on the Nov. 6 ballot that would have required new oil and gas wells be at least 2,500 feet away from schools, homes and water sources.

The industry said the setbacks would have shut down most drilling along the Front Range and spent tens of millions of dollars fighting the measure. Voters rejected the proposition.

“Today we are here because there‘s a group of people in this building behind us that have quickly forgotten the voice of the people, who spoke so loudly last November against Proposition 112,” Tracee Bentley, executive director of the Colorado Petroleum Council, said during the rally before the hearing. “They have forgotten about the hundreds and thousands of us working in the oil and gas industry. These folks have decided that we don‘t matter.”

Bentley‘s organization and the Colorado Oil and Gas Association have asked legislators to slow down consideration of SB19-181 to give people more time to review and discuss the issues.

Hundreds of oil and gas workers attended the rally on the west steps of the capitol. Hannah Golike and Johanna Winsor, who both graduated from Colorado School of Mines in May 2018, said they fear the fall-out if the bill becomes law.

“We won‘t be in Colorado. We will be gone. We‘d all be relocated to Texas or North Dakota,” Golike said.

The rare accidents that occur are often “blown out of proportion,” Winsor said.

“I don‘t think people realize how important oil and gas is to Colorado, to the economy,” Winsor added.

A survivor of one of the more horrific accidents in Colorado said during the hearing that she believes the explosion that killed her husband and brother, injured her and her son and destroyed her home could have been prevented if some of the bill‘s regulations had been in place. Erin Martinez, whose husband, Mark Martinez, and brother, Joey Irwin, , spoke in support of the bill.

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Investigators have said was caused by a flow line that was cut off but not capped when the well it was connected to was turned off. When the well was turned back on, the flow line leaked gas, saturating the ground and flowing into the Martinez home, building up in the basement.

“I don‘t want someone else to be sitting here a month from now or a year from now and telling you the same story,” Martinez said.

The work isn‘t over even if the bill makes it through the Democratic-controlled legislature and is signed into law by Gov. Jared Polis, who supports it. The oil and gas commission and other state agencies will have to write rules implementing the law, a process that could take several months.

The bill includes several changes, including better mapping of the location of oil and gas lines and reducing pollution from oil and gas operations and regulation of emissions from wells, tanks and other equipment. It authorizes cities and counties to regulate oil and gas operations as they do other development. Local governments would have the option of choosing not to regulate drilling, deferring to state officials.

Other provisions would:

  • Provide financial assurance to take care of orphaned wells.
  • Enhance worker safety by directing the oil and gas commission to create a certification process for oil and gas field workers.
  • Reduce the number of commission members who must have substantial experience in the oil and gas industry from three to one and would add a member with public health expertise.