With eye on recent drilling scare, Superior leaders weigh proposed oil and gas legislation‘s local impact

Superior leaders are hopeful the comprehensive oil and gas bill announced last week by lawmakers will go a long way toward solving the small town‘s future drilling issues.

Though the United Kingdom-based Highlands Natural Resources in November dropped its plans to drill within the town‘s 4-square-mile border — a bid that would have ushered oil and gas to the area for perhaps the first time in its short history — the parcel remains open for future applications, officials say. Without better regulations, the fear is that another firm can come in tomorrow to tap those minerals. Trustees on Monday convened a work session to gauge just how far the legislation, Senate Bill 19-181, could go toward shoring up the town‘s slim rules ahead of another drilling proposal.

It comes ahead of what‘s likely to be a handful of marathon hearings on the bill‘s merits.

Democratic lawmakers say the legislation essentially modernizes state regulations that have fallen behind technology, which has continually expanded the industry‘s reach in recent years and given companies greater access to oil and gas in more places with horizontal drilling techniques.

Further, the bill would make strides toward handing over greater local control, authorizing cities and counties to regulate oil and gas operations as they do other development. With the bill, local governments could regulate the siting of wells, inspect facilities, impose fines for leaks, spills and emissions, and charge fees to cover the costs of monitoring, among other activities.

“I think this bill really does a lot,” Matt Sura, an oil and gas attorney and Superior‘s special legal counsel, told trustees Monday. “It would really move the ball forward for local governments like the town of Superior.”

Where the Colorado Oil and Gas Conservation Commission often falls short in its current regulatory efforts is at the local level, Sura said.

Despite the commission‘s understanding of the industry at large, its “ability to regulate doesn‘t go down to the area your constituents are most concerned about, which is the location of these facilities,” Sura told trustees.

“Local governments do that much better because you know what you want your community to look like, and that‘s not something the (COGCC) does at all.”

The bill also would overhaul the practice of forced pooling, which allows oil and gas operators to make mineral rights owners, against their will, join extraction operations as part of a drilling pool. The bill would require a majority of owners to agree before a company could drill.

Such a stipulation could snarl future applications such as the one proposed in October by Highlands Natural Resources — a spacing permit for wells on a 2,560-acre site with plans to horizontally drill underneath the Rocky Flats National Wildlife Refuge — that would have utilized practices that fall under the forced pooling method, officials say.

One of those applications would have allowed for drilling up to 31 wells on a small undeveloped portion of Superior situated at the intersection of McCaslin Boulevard and Colo. 128 before it was dropped in the face of harsh local backlash.

The Highlands Natural Resources application was derided at the time for being rushed and underfunded, and residents have been wary that a more organized company could get a similar proposal through without the regulations proposed in the bill.

“In reality, right now we don‘t have anything to stop our families from fighting fracking under Rocky Flats if a permit goes in tomorrow,” Superior resident Tim Howard said Monday. “Next time it won‘t be a Highlands. It will be an Extraction or Crestone who has the wherewithal to drive things through.”

Superior has efforted several agenda items aimed at fighting future fracking in the months since the Highlands wells were proposed and then withdrawn, among them enacting a moratorium on new oil and gas applications and hiring Sura as legal counsel to draft new drilling regulations. Leaders also have discussed potentially purchasing local properties vulnerable to new applications and perhaps even transforming Superior‘s governmental structure to a home-rule municipality.

A long-term solution for the issue — in Superior and the Front Range at large — has largely been elusive, with local governments often preempted from making any meaningful rules in the face of state regulations. And conflicts have only increased as technology has brought drilling ever closer to homes and communities.

“No other issue in my four years have I seen such a profound response from residents who were legitimately scared about their health and safety and property values and family and what was going to happen to their community if 30 wells were drilled in their backyard basically in a 4-square-mile town,” Superior Mayor Clint Folsom said Monday of the defunct Highlands proposal.

“We were felling like we were handcuffed. This bill offers a chance to change that dynamic.”

 

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