Colorado's state Senate on Wednesday approved several amendments made to an oil and gas regulatory overhaul bill by the House last week as formal passage of the new law now only awaits the governor's signature.
Democratic Governor Jared Polis is expected to sign the measure, as he was on hand to support the bill when it was revealed February 28. The bill gives counties and municipalities greater control over the siting and permitting of future oil and gas wells and other infrastructure.
Currently, the Colorado Oil and Gas Conservation Commission holds primary authority over permitting. In addition, Senate Bill 181 changes the mission of the COGCC from fostering energy production to protecting health and the environment.
Although some concessions to the oil and gas industry were made because of several amendments during the legislative process, SB 181 still generates considerable concern.
"SB 181 is the most comprehensive oil and natural gas legislation Colorado has seen in decades," said Dan Haley, CEO of the Colorado Oil and Gas Association. "While a few critical amendments were added that begin to address some of industry's concerns and provide a degree of certainty to our member companies, our industry remains firmly opposed to this bill because it threatens one of the pillars of Colorado's economy."
One of the changes made during the process includes wording of the bill regarding local authority. Any new local regulations must be "necessary and reasonable" as opposed to the prior definition of simply "reasonable." Industry hopes this will make it more difficult for local governments to declare outright bans on drilling or fracking.
Adams County, located in the Denver-Julesburg Basin just south of Weld County, implemented a six-month moratorium on oil and gas drilling last week while the bill was still being debated in House committee hearings.
Another important amendment makes the COGCC a full-time board in an attempt to "professionalize" it and give commissioners more experience when it comes to permitting.
In response, industry advocates have taken a page from the opposition's playbook and are pursuing a ballot initiative that would effectively void the bill if passed. It comprises four ballot questions, dubbed the Oil and Gas Independent Regulatory Act, and would repeal SB 181. The backers of the initiative are currently going through the proposal process.
If the proposal moves forward, supporters of the initiative must acquire the signatures of 124,632 registered voters by August 5 to get the initiative on the ballot.
Colorado is the fifth most prolific producer of crude oil in the US, trailing only Texas, North Dakota, New Mexico and Oklahoma, according to the US Energy Information Administration. It ranks sixth in natural gas production.
"Our state's energy future is too important to shut out voices from all impacted stakeholder communities," Haley said. "State officials have committed to working with industry experts during the highly complex regulatory rulemakings following the bill's enactment. That will be critical to minimizing the bill's negative impacts on our state, and we hope that process can begin immediately."
