COLORADO’S OIL AND GAS INDUSTRY SURVIVES A MAJOR SETBACK

On August 29, 2016, the Colorado Oil & Gas Association (COGA) announced that Ballot Initiative 78 failed to gather enough signatures to make it on the voting ballot this November.  Download the press release here.  Initiative 78 proposed that all new oil and gas development be at least 2,500 feet away from any (1) occupied structure, defined as “any building or structure that requires a certificate of occupancy, or building or structure intended for human occupancy, including homes, schools and hospitals”, or any (2) area of special concern, defined as “public and community drinking water sources, lakes, rivers, perennial or intermittent streams, creeks, irrigation canals, riparian areas, playgrounds, permanent sports fields, amphitheaters, public parks and public open space”.  Download the full proposed Initiative here.  The current required setbacks, as established by the Colorado Oil & Gas Conservation Commission (COGCC) in 2013, are 500 feet from a building unit (e.g. home) and 1,000 feet from a high occupancy building (e.g. school).

W. Grant Boies
Of Counsel Attorney
Colorado
gboies@bmkpllc.com
(720) 372-1492

The COGCC conducted an assessment of how the 2,500-foot setback would impact the oil and gas industry in Colorado and found that over 90% of surface acreage in the state would be unavailable for future oil and gas development. The University of Colorado determined that, if the new setback were to pass, more than 54,000 jobs and around $7.1 Billion in economic activity would be lost in the next five years, and those numbers would double in fifteen years, reducing the state’s GDP by 3.4%.

While there are many reasons why some citizens, and out-of-state groups, pushed for this extreme setback, the most common complaint is noise.  Drilling, completion activities, pumps, compressors, and even truck traffic are all tied to noise complaints.  COGCC Regulation 802 controls noise abatement during the drilling, completion and operation of oil and gas wells and production facilities.  Rule 802(b) sets the maximum permissible noise levels based on land zoning (residential, agricultural, commercial etc.) and time of day (7am to 7pm and slightly quieter from 7pm to 7am).  Current maximum permissible noise level for residential areas range from 55 db(A) to 50 db(A).  The COGCC’s goal with noise abatement is to identify noise sources related to oil and gas operations, implement cost-effective and technically-feasible mitigation measures, and work with the surrounding landowners to find common ground.

Governor John Hickenlooper created an Oil and Gas Task Force in 2014 to help create stricter rules for oil and gas development within the state, however, many of those rules have come under harsh criticism from concerned citizens and opponents of the industry.  In 2015 the COGCC received a total of 330 complaints from the public; 123 complaints were due to noise.  Earlier this year, the COGCC began “the process of gathering technical data from state health experts, industry officials and third party consultants regarding noise, its health impacts and mitigation measures”, said David Kulmann, COGCC Deputy Director.  After assessing the data, the COGCC will determine whether the noise abatement rules need to be more demanding by the end of the year.

Even though Ballot Initiative 78 failed to make it to the voting booth, the struggle between the industry, concerned citizens, the state and other organizations over future oil and gas development in Colorado is far from over.  To be continued…

In the meantime, check out what two of Colorado’s industry leaders, Liberty Oilfield Services and Extraction Oil & Gas, are doing to reduce noise on all their own.

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