A Big Oil and Gas Drilling Battle Brews in Colorado

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Connecting state and local government leaders

Ballot initiatives could shift some big regulatory powers from the state to localities.

Editor's note: An update on a deal between Colorado Gov. John Hickenlooper and U.S. Rep. Jared Polis announced Monday night appears at the bottom of this article. 

A pair of controversial ballot initiatives in Colorado have divided state and local officials and pitted the oil and gas industry against community activists over the nationally explosive issue of hydraulic fracturing in and around homes and public buildings.

A group called Coloradans for Safe and Clean Energy, funded in part by millionaire Democratic U.S. Rep. Jared Polis of Boulder, has been busily gathering signatures this summer for Initiatives 88 and 89, which could significantly shift control over oil and gas drilling away from the state and into the hands of city and county officials.

Gov. John Hickenlooper, a Democrat and former Denver mayor, has vowed to do “whatever it takes to defeat” the measures after unsuccessfully trying to build consensus for a bill to allow more local control over drilling. The governor’s bill would have required a special session of the state legislature, but Hickenlooper hoped it would derail the divisive ballot initiatives.

Past Colorado court rulings have maintained state primacy when it comes to regulating oil and gas drilling, but an oil boom along the state’s northern Front Range — spurred mostly by advances in fracking — has put the subsurface mineral rights of oil and gas companies squarely in conflict with some of the state’s fastest growing population centers.

Voters in four Colorado cities passed fracking bans last fall, joining an earlier ban approved by Longmont voters. A district court judge in Boulder County recently struck down that 2012 ban, siding with industry, but a separate state lawsuit over Longmont’s tighter regulations is still pending.

Colorado is among at least 12 states from New Jersey to California where legal battles are raging over attempts by municipalities to ban or at least limit fracking, which involves the high-pressure injection of millions of gallons of water, sand and chemicals deep underground to fracture tight geological formations and free up more oil and gas. Opponents fear fumes and water pollution.

“Localities seem to have no problem regulating every other industry,” said Coloradans for Safe and Clean Energy spokeswoman Mara Sheldon. “Initiative 89 will now give local government the ability to regulate oil and gas too.”

Initiative 89 would amend the Colorado Constitution to guarantee residents the right to “clean air, pure water, and natural and scenic values,” and it would also declare “that if state or local laws conflict, the more restrictive law or regulation governs.”

But industry officials prefer overarching state control to a patchwork of local regulations.

“With regard to further local control and rule-making at a local level, we believe this is unworkable as municipalities lack the expertise and resources to properly promulgate and enforce such rules,” said Encana spokesman Doug Hock, whose company prefers negotiating memorandums of understanding (MOUs) such as a deal struck in the Front Range community of Erie near Boulder.

The state largely backs the same sort of deal-making with local governments.

“We continue to believe collaboration between state and local governments yields the best results, and we continue to work closely and successfully with communities across Colorado to ensure our energy resources can be developed carefully and thoughtfully, in a way that protects people, communities and our environment,” Colorado Department of Natural Resources Executive Director Mike King said in a statement.

Most cities and counties, through local zoning laws, already can and do control transportation and infrastructure surrounding the actual well pad, which is overseen by state regulators.

“We’ve been regulating oil and gas since the ’40s in Colorado, so we have all kinds of expertise,” said Geoff Wilson, general counsel for the Colorado Municipal League.

And Sheldon insists that one-size-fits-all state regulations for drilling don’t make sense in a huge, geographically diverse state such as Colorado.

“One of Colorado’s greatest assets is its various different landscapes across the state -- Denver versus Battlement Mesa or Breckenridge versus Greeley,” she said. “What may be good for one community may not work for another. That is why local control is so important; it isn’t blanket regulation.”

Initiative 88 would amend the state constitution to increase setbacks for oil and gas drilling from 500 feet away from homes and public buildings to 2,000 feet. The state last year increased setbacks from 350 feet to 500 feet to address public health concerns, but the issue remains highly contentious in Front Range cities such as Greeley.

“How can the industry say that fracking next to a home or school is a good idea, safe for communities and children, and more economically feasible?” Sheldon asked. “We are looking to pass common-sense protections for our children and communities while balancing responsible energy development.”

But Hock said more than 75 percent of Encana’s inventory of 49,000 acres in the mineral-rich Denver Julesburg Basin would be eliminated by a 2,000-foot setback requirement because of the density of buildings.

“We oppose the 2,000-foot setback as they are an effective ban on further drilling in Colorado,” Hock said.

As of July 24, Coloradans for Safe and Clean Energy had obtained 98,227 signatures for Initiative 88 and 96,791 for Initiative 89. For each measure, the group must submit at least 86,105 valid signatures of registered Colorado voters by Monday, Aug. 4.

Two pro-industry ballot initiatives have reportedly obtained more than 100,000 signatures each. Initiative 121 would block communities that ban oil and gas development from collecting state oil and gas tax revenues, and Initiative 137 would require all future ballot measures to include a fiscal-impact statement.

UPDATE, Monday, 9:30 p.m. ET:

Hickenlooper and Polis on Monday announced a deal in which the state drops its litigation against Longmont and forms an 18-member task force to make recommendations to the state legislature for laws to increase local control over oil and gas drilling.

In exchange, Polis pulled his financial backing for a pair of ballot initiatives that would have increased setbacks for drilling near schools and homes and prioritized environmental protection in the state constitution. Some conservation groups support the deal, but others—particularly grassroots community activists—oppose the compromise.

David O. Williams is managing editor of the Rocky Mountain Post and is based in Eagle, Colorado.

(Image via Darin Echelberger/Shutterstock.com)