October 7, 2015

A Tale Of Erie And Encana – Local Control In Colorado Gains Ground

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The Kelly Farms production site in Greeley, CO. On the far side of is a housing development and off-camera is a playing field at Northridge High School. Sites close to communities like this one have prompted outrage from local citizens.

Matt Richmond

The Kelly Farms production site in Greeley, CO. On the far side of is a housing development and off-camera is a playing field at Northridge High School. Sites close to communities like this one have prompted outrage from local citizens.

Oil and gas regulators in Colorado are proposing a new set of rules that would give local governments more say over drilling operations. The draft rules released Tuesday require engagement with local officials before applying for a large-site drilling permit from the state.

But some towns in Colorado are already way ahead of the state on this. In the early 2000s, the town of Erie had just about 12,000 residents. But the open fields and farmlands of this front range community have been converted to housing developments fast. The population is now 22,000 and is expected to triple by 2050. Scattered across that urbanizing landscape are oil production sites and places where more drilling is planned.

Town trustee Jennifer Carroll says, up until recently, there wasn’t much they could do to control new oil and gas drilling.

“The only thing we would regulate is fence color, what material the fence was and then the road going from their site to our main roads has to be paved for a certain amount and gravel,” said Carroll.

But Erie officials found a way to change that, on their own. First, a couple years ago, they created a memorandum of understanding increasing setbacks with the main driller working there, Encana Oil and Gas. And after problems with noise and vibrations at one site in town, the town and operator negotiated another agreement that was approved this August.

“When we’d get into the details of here’s how we want you to solve the problem, that would kind of stir things up and make them more standoffish but when we stepped back and said, ‘here’s the problem our residents see and here’s what we want to fix, what do you suggest?’” said Carrol, one of the town’s negotiators.

They got a five-year drilling plan, mapping out Encana’s eight future drilling sites, along with a requirement that the company give 90 days notice to the town and public before an application is submitted to the state. They got decreased noise limits, more routine leak monitoring and 1000-foot setbacks from buildings, all of which go beyond current state regulations.

“So I think we in some shape or form got everything we were looking for,” says Carroll.

Matt Lepore, director of the Colorado Oil and Gas Conservation Commission said his group supports those kinds of contractural agreements between operators and local governments.” The commission’s new draft rules don’t go into the same level of specifics that Erie negotiated with Encana. But they do say local officials will have input into the location of large well sites and the best practices used at those sites – if they want it.

“Local governments feel that operators tend to come to COGCC, get a permit and then go to local governments and say, ‘see we have a permit so you don’t have as much say-so as you might want to have,’” says Lepore. “We’re trying to change that calculus a little bit.”

The new rules come out of an oil and gas task force set up by Gov. John Hickenlooper last year. The task force came up with nine recommendations. The others deal with regulatory staffing, transparency and emissions monitoring.

“These rules are going to be like any of our rules – a process of a public, open process and in my experience nobody gets everything they want,” says Lepore.

Carl Erickson is one person who won’t get what he wants from the new rules. He’s with a local non-profit, Weld Air and Water, that is critical of the state’s fracking regulations. He points to a production site on the edge of a playing field at Northridge High School in Greeley.

“It doesn’t belong here,” says Erickson. “It’s not conducive with why we have communities to begin with.”

He wants mandated 1000-foot setbacks from all structures and no drilling at all in heavily populated areas.

The state’s new rules on local involvement, as written, will only apply to large operations within urban areas. The COGCC will take comments on the proposed rules during a series of stakeholder meetings this month. And then the final rules are expected in November.

Editor’s Note: On October 8, Encana announced an agreement to sell its Denver Julesburg (DJ) Basin assets in Colorado to a new entity 95 percent owned by Canada Pension Plan Investment Board and 5 percent by The Broe Group. Encana has informed Inside Energy that “The buyer intends to honor the Operator Agreement we signed with the Town of Erie. We’re pleased they intend to do so, as we believe the agreement is beneficial to all stakeholders.”

  • Lauren Swain

    The Denver Post and US News & World Report have reported that fracking operations emit dangerous air toxins and spill toxic chemicals on the ground routinely. Until local communities have the right to say no to well sites in neighborhoods, the human rights of residents will be violated with hazardous pollutants. The oil and gas industry has obtained exemptions to key provisions of the federal laws we depend on for our health and safety, including the Clean Air Act and Clean Water Act. Other mainstream news outlets have reported that the Colorado Oil and Gas Conservation Commssion’s proposed rules 17 & 20 have been roundly criticized by elected officials in impacted communities for their failure to provide Coloradans with any meaningful protection from toxic emissions, spills, explosions, and other negative impacts from fracking in neighborhoods. It is appalling that Rocky Mountain PBS would promote biased, pro-industry articles like this on their webpage without complete coverage of the crisis in public health and democracy embodied by the failure of the COGCC to address the legitimate needs of Coloradan’s for clean air, clean water, safe, livable neighborhoods and the right to protect themselves from residential drilling. http://www.usnews.com/news/articles/2014/10/30/toxic-chemicals-and-carcinogens-skyrocket-near-fracking-sites-study-says

    • Dan Boyce

      Hi Lauren,

      I’m one of Inside Energy’s reporters covering Colorado. Thank you for your passionate feedback. An engaged readership/listenership is exactly what journalists hope for, so I’m glad to see you taking part.

      Further reading of Matt’s article would show that we didn’t say that everyone is behind the proposed rules from the task force, such as Weld Air and Water’s Carl Erickson.

      We’ve done quite a bit of work on this topic at Inside Energy, and I trust if you examine our other articles, you will find we have spoken to many diverse voices on the subject. Here is a sample:





      Anyhow, the Erie MOU story is an important one as this all moves forward and we stand by Matt Richmond’s work.

      Again, thanks for reaching out, and if you would like to help us determine what topics we should cover in the future, you can become part of our “Insider Network” at insideenergy.org/insiders.

      • Lauren Swain

        If this were serious unbiased news coverage it would includes quotes from frustrated members of the task force itself and other stakeholders as other mainstream news outlets did, including the Denver Business Journal. Suggested topics: Toxic air emissions from drilling/fracking sites, toxic spills contaminating ground water at drilling/fracking sites, denial of local rights to restrict OG operations, federal legislation like the FRAC and BREATHE act to close the OG loopholes in the environmental laws we depend on for our health and safety, explosions, fires, birth defects & leukemia from benzene emissions, worker deaths, labor issues, boom and bust economics, road damage, noise, etc.

        • Swiftright Right

          I just found the site and they seem pretty “fair” to me.

  • austintch

    Due to the Cheney Loophole, oil and gas fracking operations do not have to meet standards of the Clean Air or the Clean Water Act. Therefore, regulation of pollution of those operations falls to the states. While Colorado has passed some strict regulations, there are few regulators and companies know they can get away with violations. New rules 17 and 20 allow drilling companies to encroach on residential neighborhoods, with resulting emission of volatile organic chemicals and the potential for spills, not to mention noise and dust pollution. The governor’s so-called Blue Ribbon Panel has failed to protect the interest of Coloradans, unless we are talking about the privileged few with deep pockets. I retired to the western slope to ride bikes, hike, take in the gorgeous views, and breathe the clean air. Surprise, surprise.

    • Lauren Swain

      Thank you, austintch. We still have inadequate levels of state inspectors and the fines are far to small to act as a deterrent to violators. Just to set the record straight the Halliburton Loophole exempted the OG industry from key provisions of the Clean Water Act, Safe Drinking Water Act, and NEPA. The Clean Air Act exemption and RCRA exemptions and others were granted by the EPA decades earlier.

    • Dan Boyce

      Thank you too, austintch for your feedback. As I mentioned for Lauren up above, we would love if you signed up for our “Insider Network” at insideenergy.org/insiders.

  • Laurent Meillon

    There are a myriad problems with fracking in CO, the impacts on local residents is clearly one, and the State of CO is basically doing so little about it, it amounts to lip service at best. The article forgets to mention that the State filed law suits against local jurisdictions which voted a fracking memorandum on their ballot. Yet the largest problem is the leaks of methane and other toxic gases – a global problem, not just a local one. On methane alone, all serious research from NOAA, NASA etc points to leak rates that make fracked gas worst than coal when it comes to heat-trapping effects. Fracking, as all fossil fuels, has external costs. These external costs are currently socialized at random on the local and general population, not to mention our children. This is basically a socialist loophole in the otherwise successful capitalist model that has made our country grow. We need to fix our accounting, with a revenue-neutral carbon/pollution tax, or other mechanism that makes fossils pay for the costs they currently push under the table. Until this is done, oil & gas’s complaints about red tape (or incentives for clean energy) makes no sense. In fact, the refusal to pay for the true costs of oil & gas causes the need for the very regulations and clean energy incentives that industry criticizes. In the light of all this, I find this article is majorly flawed.. As for our Governor, I very much appreciate his seeking middle grounds on most issues, but on the topic of energy, what is needed is true forward change based on the fact that fossil fuels are turning out to be far more harmful than tobacco.