Editor’s note: On March 13, the Senate passed the oil and gas bill 19-15 along party lines. Democrats backed several amendments considered favorable to the industry. They include allowing companies to request a technical review of a local government’s decision on an application and a requirement that local government regulations be “necessary and reasonable.” Some supporters worry these amendments strip away power from local governments and conflict with the intent of the bill. Earlier this month, hundreds of people who work in the oil and gas industry came to the state Capitol — some on private buses paid for by their employers — to protest a bill overhauling state regulations on drilling. The industry still opposes the bill. Republicans, who have raised concerns that the bill is moving too fast, effectively filibustered it for a day when they asked for a 2,000-word bill to be read in full. This story was originally published on March 5, 2019.
On April 17, 2017, Erin Martinez’s home exploded. She remembers feeling the house lift from the ground. She remembers being trapped by debris.
Martinez escaped with injuries from the blast, which was caused by a leak in a nearby natural gas line. Her husband and brother, who were working on a hot water heater in the basement of the Firestone home, were killed.
Martinez, who has since recovered and moved into a new home, came to the state Capitol on Thursday to support legislation that would dramatically change how Colorado regulates oil and gas development across the state.
“I have no desires to destroy the industry. Lots of good people depend on this industry for their livelihoods. I respect that,” Martinez, flanked by Democratic lawmakers, county commissioners, and Gov. Jared Polis, told a crowd of mostly staffers and reporters.
“However, with great tragedy should also come great change. Human life should come first,” she said.
Her speech capped off an announcement that Democrats will soon introduce a bill overhauling the Colorado Oil and Gas Conservation Commission’s oversight of the $31-billion industry, among other reforms.
Under the proposed legislation, which will be introduced as soon as Friday, lawmakers say the COGCC will no longer be allowed to promote the industry, a statutory mandate dating back to 1951 that drilling opponents say conflicts with the commission’s other regulatory obligations. When issuing drilling permits, the commission must make protecting public health, safety and the environment a top priority, lawmakers say. If enacted, it would mark a subtle but significant shift in the agency’s decision-making that for years has been contested in the state courts.
Another key provision would allow local communities to regulate drilling themselves, which could effectively prohibit drilling in certain communities. Oil and gas companies have long feared such a patchwork of regulations across the state, especially as Boulder, Erie, Lafayette, Superior and other Front Range cities pursue moratoriums on drilling.
Supporters of the legislation say it’s about updating antiquated regulations that have not kept pace with growth in the industry.
“We need to modernize our laws to reflect the circumstances of today,” said House Speaker KC Becker of Boulder, who helped craft the legislation. She added: “Our state, including where my constituents live, work and play, has some of the worst air quality in the country. … It’s past time for action.”
In 2018, the industry produced a record 15.8 million barrels of oil and 1,800 billion cubic feet of natural gas. It also fended off anti-fracking challenges on the November ballot and in the state courts, preserving the status quo amid growing pushback to drilling along the populated Front Range. In recent years, the region has seen new oil and gas drilling creep closer to Denver suburbs and housing developments inch outward into the oil and gas patch, prompting concerns about public safety.
In the last five years, Democratic lawmakers’ repeated attempts to regulate the industry have been shot down in the GOP-controlled Senate. Republicans view the industry as a key economic driver. But now, with Democrats in control of the state legislature and the governor’s office for the first time since 2014, the industry may be unable to stop historic changes to its operations.
There were no Republicans at the press conference. A spokesman for the Senate Republicans said they will comment after the bill is introduced.
The oil and gas industry raised concerns about process in an early reaction to the proposed legislation.
“In my over 15 years of working with the Colorado state government, not having a thorough stakeholder process is unprecedented, especially for a bill that targets one industry but impacts every Coloradan,” Tracee Bentley, executive director for the Colorado Petroleum Council, an industry trade group, said in a statement.
The industry also pushed back on statements by lawmakers that regulations are lagging behind.
“Their notion that oil and natural gas regulations haven’t been modernized and strengthened in 60 years is revisionist history,” said Dan Haley, president and CEO of the Colorado Oil & Gas Association, in a statement. “We have the strictest regulations in the country.”
State regulators have virtually never denied a drilling permit application, in part because the Colorado Oil and Gas Conservation Commission has the legislative mandate to promote the industry. However, hundreds of drilling permits have been withdrawn or rejected, in part due to concerns or questions raised by state regulators.
The bill does not include any provisions to increase setbacks — the distance between drilling rigs and homes and structures — though some local communities could implement their own setbacks under the proposed changes in law, lawmakers said. A ballot measure this November that would have quintupled setbacks from the current 500 feet to 2,500 feet was rejected by voters.
Research shows living within 500 feet of oil and gas facilities increases the risk of cancer due to exposure to pollutants such as benzene and alkanes. Other research concludes that living 500 feet or further away from a well site reduces the exposure risk to levels considered safe by federal and state health standards. Still, there have been 867 drilling permits granted since 2009 that fall within 500 feet of a building, according to the state.
After the November election, proponents of the increased setbacks, including Colorado Rising, said they are already working to get a similar setback measure on the ballot in 2020.
Another lawsuit before the U.S. District Court of Colorado is challenging a state law that allows oil and gas companies to drill underneath someone’s property without their consent as long as a company makes a “reasonable” offer of compensation.
Democratic lawmakers have long sought to regulate so-called forced pooling. Sen. Mike Foote, a Democrat from Lafayette, is among them. As part of the legislative package announced Thursday, he said the bill will require at least 51 percent of mineral rights owners in a neighborhood to consent before a pooling permit application can be filed. Currently, just one person is needed. It would also increase the royalties to mineral rights owners if they decide to sign a lease agreement.
The expected legislation comes after Gov. Jared Polis requested $1.8 million from lawmakers to beef up staff at the Colorado Oil and Gas Conservation Commission to inspect more wells and to chip away at a permitting backlog of over 6,000 applications. There are about 53,300 active wells in Colorado, according to the COGCC, with only 30 full-time employees dedicated to inspecting them for environmental and public health violations. In recent years, the number of public complaints about odor, noise and water contamination has been on the rise, with a spike in 2017, according to state data. Meanwhile, the number of inspections has declined, in part due to the length of time it takes to respond to public complaints.
Another provision in the expected legislation will make the location of underground natural gas flow lines more easily accessible for public inspection, lawmakers said. Such information, supporters say, may have prevented the fatal Firestone home explosion.
Martinez said before she moved into her new home, she was told there were no oil and gas wells nearby. She moved in and told her son they were safe. Months later, she said, oil and gas crews arrived. They began digging, moving closer and closer to her home. Then they found an abandoned well along a fenceline she shares with her neighbor.
She told a crowd at the state Capitol people have a right to know what they are living on top of.
“We are in the process of moving again,” Martinez said. “And I am trying to get my son to trust that this time it will be OK.”