Monday, September 5, 2011

Colorado’s Oil and Gas Rules - Colorado Environmental Coalition

Fact sheet updated 1/25/2011

The results are in: the oil and gas rules approved in 2009 have been a resounding success. They have streamlined permitting, cut red tape, and created regulatory consistency. It’s no surprise that the industry’s recovery has been faster in Colorado than in any other Rocky Mountain state. The lesson is clear -- we can protect communities and treasured landscapes while we create a healthier energy industry.

The rules have addressed very real problems. During two decades of rapid development, drilling rigs and gas wells popped up near schools, businesses, and homes. Toxic chemicals contaminated air and drinking water. Poorly planned and unrestrained drilling led to severe fragmentation of wildlife habitat.

In the coming years, as we manage the impacts of oil and gas development, the rules will continue to protect Colorado communities and encourage constructive cooperation between citizens and industry.

How the rules protect us
Drinking water. The new rules protect drinking water supplies by creating a 300 foot buffer around streams that feed our reservoirs. They protect groundwater by requiring waste pits to be lined and disposed of at appropriate facilities.

Clean air. The new rules protect air quality near homes, schools, and other occupied buildings in northwest Colorado by requiring emission control devices on equipment.

Chemical information during an emergency. The new rules, though not requiring public disclosure of chemicals used in drilling operations, do give officials and medical professionals a right to information needed to respond to emergencies at well sites.

Groundwater testing. The rules help keep polluters accountable by requiring testing in southeastern Colorado at coalbed methane well sites.

Jobs and the economy: the facts
The 2009 slowdown in oil and gas development was caused by economic factors, not by the rules. The recession, an oversupply of gas, and the steep decline in natural gas prices led to the 2009 slowdown. (2008 gas price: $8-10 per thousand cubic ft. 2009 gas price: $2-3 per thousand cubic ft.)1

Colorado is rebounding faster than other states in the West. Since the rules took effect in April 2009, Colorado has outpaced neighboring states in oil and gas activity. 2010 saw the third highest number of permits issued in state history. Colorado is the regional leader in permits issued and new well starts – ahead of Wyoming, New Mexico, Utah and Montana.2

The rules have cut red tape for industry. Processing time for drilling permits has declined since the rules took effect. (63 days in 2008 vs. 35 days by late 2010)3

1 COGCC report presented to Joint Budget Committee, Jan. 7, 2010, aka "Natural Resources Hearing," p. 4

"Colorado on Pace in 2010 for Third Most Drilling Permits … Denver Post, Dec. 21, 2010. For 2009 performance, see "Natural Resources Hearing. For first half of 2010, see Neslin memo to COGCC, June 23, 2010.

3 Neslin memo to COGCC, June 23, 2010. Neslin, "Northwest Colorado Oil and Gas Forum," Nov. 2010.

For more information contact: Charlie Montgomery, CEC, 303.405-6707,

What oil and gas interests are saying about the rules ...

"We are not looking for any wholesale changes and we are not asking for any legislation this year…What a lot of producers and the whole business community wants is business certainty. We can mostly live with what we've got," he said. 2011 Legislative Fact Sheet | Colorado Environmental Coalition

Doug Flanders, Colorado Oil and Gas Association, Denver Post, Dec. 31, 2010

"Washington policymakers considering stronger regulations sometimes look to the states for ideas. Colorado’s new oil and gas regulations may be providing exactly that."
Nick Snow, "OGJ Washington Pulse Blog," Oil&Gas Journal, Aug. 19, 2010

"I’d say we’ve been pleased with the communication channels we’ve had with all the state agencies as all of us have implemented the new rules."
Jim Branch, Piceance Project executive for ExxonMobil Production Co., Grand Junction Daily Sentinel, Dec. 12, 2009.

"We really think that …Colorado has been a leader, and we think the state rules and regs have been sufficient … "[W]e went through the process on the rules and regs in Colorado and in Wyoming and we support the states’ efforts …"
Lisa Hough, BP Senior Director of Government and Public Affairs, Colorado Independent, July 30, 2010

"The new rules, we didn’t know how that was going to manifest itself, but we’ve seen some good progress. Now, things are pretty consistent."
Al Harrison, Vice President of exploration and production for the Denver region and the Piceance Basin, Williams Corporation, Grand Junction Daily Sentinel, Aug. 3, 2010

For more information contact: Charlie Montgomery, CEC, 303.405-6707,

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