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Shale & Fracking Tracker

Colorado

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Colorado has a long history of oil and gas development and is home to several major oil and gas basins, including the Denver & Julesburg, Raton, San Juan and Piceance Basins, and the Niobrara, Pierre and Hillard-Baxter-Mancos shale plays.1 Recently, the United States Geological Survey revised its estimate of undiscovered, technically recoverable shale gas in the Mancos shale play within the Piceance Basin upward to 66.3 trillion cubic feet.2 Some industry representatives maintain that even this estimate understates the resource’s potential.3

Statutory and Regulatory Framework

Oil and gas development is governed primarily by the Colorado Oil and Gas Conservation Act4 and rules promulgated by the Colorado Oil and Gas Conservation Commission (“COGCC”).5 The COGCC is a division of the Colorado Department of Natural Resources (“DNR”), and has broad statutory authority with respect to impacts on any air, water, soil, or biological resources resulting from oil and gas operations.6

The COGCC evaluated hydraulic fracturing risks when it comprehensively updated its regulations in 2008,7 adopted a chemical disclosure rule in 2012,8 and adopted statewide water sampling and monitoring rules in 2013.9 Colorado’s rules also include well casing and cementing requirements,10 “buffer zones” near surface waters and tributaries that are sources of public drinking water,11 and other setback requirements.12

The DNR Division of Water Resources (“DWR”) oversees the administration of surface and groundwater, including water produced by and used in oil and gas activities.13 However, a Memorandum of Agreement (“MOA”) between the COGCC and the Water Quality Control Division (“WQCD”) of the Colorado Department of Public Health and Environment (“CDPHE”) transfers reporting and initial oversight responsibilities for spills and releases from oil and gas operations to the COGCC, including responding to spills associated with hydraulic fracturing.14

In February 2014, the CDPHE’s Air Quality Control Commission adopted new air regulations implementing the federal Standards of Performance for Crude Oil and Natural Gas Production (40 C.F.R. pt. 60, subpt. OOOO) and regulating methane emissions from oil and gas operations, including fracking wells.15 These rules require an average hydrocarbon control efficiency of 95% at oil and gas production facilities;16 require green completions at all newly constructed, hydraulically fractured, or recompleted wells;17 require emissions reductions from centrifugal compressors;18 require VOC emissions control requirements at storage tanks utilized during production;19 and address fugitive emissions from components at natural gas compressor stations and well production facilities through various leak detection and repair requirements.20 Four statewide anti-fracking initiatives were originally going to be on Colorado’s November 2014 ballot, but Governor John Hickenlooper reached an agreement with supporters of the initiatives to keep the initiatives off the ballot.21 As part of that negotiation, Governor Hickenlooper agreed to establish a Task Force on State and Local Regulation of Oil and Gas Operations (“Task Force”).22

In its Final Report, dated February 27, 2015, the Task Force presented the following nine recommendations:

  • OGCC should establish a process for increased collaboration between local governments, the COGCC, and operators on the locations of oil and gas operations and urban planning;
  • Future oil and gas drilling and production facilities should be included in existing local comprehensive planning processes; 
  • COGCC should work to enhance the role of local government designees as liaisons between industry, residents, and local officials;
  • The General Assembly should authorize an increase in COGCC staffing, including additional inspectors and field operations, enforcement, and permitting staff;
  • The General Assembly should authorize an increase in CDPHE’s staffing and the creation of a health complaint and information line;
  • The Office of the Governor should create an oil and gas information clearinghouse to facilitate the distribution of accurate, unbiased information regarding Colorado’s oil and gas industry;
  • COGCC and Colorado Department of Transportation should convene a working group to reduce truck traffic on public streets, roads and highways for oil and gas activities;
  • The General Assembly should approve the continuation of oil and gas methane rules that the state adopted on a temporary basis in 2014; and
  • COGCC should implement a compliance assistance program to help operators comply with operating rules policies and to ensure that inspectors are enforcing those rules and policies in a consistent manner.23

In January 2016, COGCC approved new rules addressing some of the Task Force’s recommendations.24 Among other things, the rules call for increased involvement of local governments in processes for planning and siting oil and gas operations.25

Recent Developments

Local Initiatives Preempted by State Law

In November of 2012, voters in the city of Longmont approved a ballot measure banning fracking within the city.26 In November of 2013, voters in four more Colorado jurisdictions—Boulder, Fort Collins, Lafayette, and Broomfield—approved similar ballot measures to suspend or ban hydraulic fracturing.27 

The Colorado Oil & Gas Association (“COGA”) challenged the Broomfield, Longmont, Fort Collins, and Lafayette resolutions in State courts.28 Colorado district courts struck down the Lafayette, Fort Collins, and Longmont measures on the grounds that they are preempted by State law; a case challenging the Broomfield measure was held in abeyance pending the resolution to appeals by Longmont and Fort Collins.29 In May 2016, the Colorado Supreme Court upheld the district court decisions, finding that both the Longmont and Fort Collins measures were preempted by state law.30

Potential November 2016 Ballot Initiatives

On August 8, 2016, proponents of two statewide referendums on fracking turned in petitions with the required signatures to place two initiatives on the November ballot.31 Initiative 75 would give local governments the authority to regulate oil and gas development, including restricting the practice of hydraulic fracturing.32 Initiative 78 would force mandatory setbacks for oil and gas development, including requiring any development or fracking to be located more than 2,500 feet away from both an "occupied structure" or "areas of special concern."33 However, on August 29, 2016, the Colorado Secretary of State announced that both measures failed to gather the requisite number of signatures after it screened the submitted signatures to determine their validity.34 Proponents of the initiatives have 30 days to appeal the decision to the Denver District Court.35

Last updated September 2016.



See Geography: Maps: Oil and Gas Related Exploration, Resources, and Production: Shale Gas and Oil Play, Lower 48 States, U.S. ENERGY INFO. ADMIN. [“USEIA”] (June 30, 2016), https://www.eia.gov/maps/images/shale_gas_lower48.pdf.

2 Dennis Webb, An Even Bigger Beast? Industry Thinks Huge USGS Mancos Shale Estimate May Be Low, DAILY SENTINEL (June 25, 2016), http://www.gjsentinel.com/news/articles/an-even-bigger-beast/.

3Id.

4 COLO. REV. STAT. § 34-60-100, et seq.

See http://cogcc.state.co.us/reg.html#/rules [hereinafter “COGCC Rules”].

COLO. REV. STAT. § 34-60-106(2)(d).

7 Bob Randall, Colorado Department of Natural Resources, Colorado Oil and Gas Conservation Commission Rule and Regulations, Presentation at BLM Colorado Resource Advisory Council Meeting (Mar. 7, 2012), http://www.blm.gov/style/medialib/blm/co/resources/resource_advisory/2012_super_rac.Par.83149.File.dat/COGCC.pdf.

8 COGCC Rule 205A, supra note 5. 

Id. Rule 609.

10 Id. Rule 317.

11 Id. Rule 317B.

12 See, e.g., id. Rules 318, 318A, 603, 604, 605.

13 See generally COLO. DIV. OF WATER RES., http://water.state.co.us/Home/Pages/default.aspx (last visited Sept. 23, 2016).

14 Memorandum of Agreement for the Implementation of SB181 Amendments to the Colorado Water Quality Control Act (25-8-101, et seq.) (Aug. 28, 1990), https://www.colorado.gov/pacific/sites/default/files/moaogcc.pdf.

15 5 Colo. Code Regs. § 1001-8 (2015), https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=6435&fileName=5 CCR 1001-8.

16 Id. § 1001-9.XVII.G (2014), https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=5670&fileName=5 CCR 1001-9.

17 Id. § 1001-8.XIX, see supra note 15.

18 Id. § 1001-8.XVII.

19 Id. § 1001-8.XIX.

20 See generally id.; 40 C.F.R. §§ 60.5360–.5499.

21 Maeve Reston, Deal Will Keep Fracking Battle Off Colorado Ballot, L.A. TIMES (Aug. 4, 2014), http://www.latimes.com/nation/politics/politicsnow/la-pn-colorado-deal-fracking-ballot-20140804-story.html.

22 Colorado Department of Natural Resources: Oil and Gas Task Force, http://dnr.state.co.us/ogtaskforce/pages/home.aspx.

23 COLORADO OIL AND GAS TASK FORCE, FINAL REPORT (Feb. 27, 2015), http://dnr.state.co.us/ogtaskforce/Documents/OilGasTaskForceFinalReport.pdf.

24 Cathy Proctor, Colorado Oil and Gas Sites Near Neighborhoods to Get More Local Scrutiny, DENV. BUS. J. (Jan. 25, 2016), http://www.bizjournals.com/denver/blog/earth_to_power/2016/01/colorado-gives-local-officials-a-say-on-big-new.html.

25 See COGCC Rule 305A, supra note 5.

26 Jack Healy, With Ban on Drilling Practice, Town Lands in Thick of Dispute, N.Y. TIMES (Nov. 25, 2012), http://www.nytimes.com/2012/11/26/us/with-ban-on-fracking-colorado-town-lands-in-thick-of-dispute.html?_r=0.

27 Keith Coffman, Colorado an Energy Battleground as Towns Ban Fracking, REUTERS (Nov. 6, 2013), http://www.reuters.com/article/us-usa-fracking-colorado-idUSBRE9A50QT20131106; Megan Quinn, Broomfield Fracking: Recount Finds 5-Year Ban Wins by 20 Votes, BROOMFIELD NEWS (Dec. 3, 2013), http://www.dailycamera.com/broomfield-news/ci_24649390/broomfield-fracking-recount-finds-5-year-ban-wins.

28 Press Release, Colorado Oil & Gas Association, Colorado Oil & Gas Association Seeks Declaratory Judgment Invalidating Broomfield Fracking Ban (Nov. 24, 2014), http://www.coga.org/wp-content/uploads/2015/09/COGA-Seeks-Declaratory-Judgment-Invalidating-Broomfield-Fracking-Ban.pdf.

29 Joshua Lindenstein, Colorado Supreme Court Strikes Down Longmont, Fort Collins Fracking Bans, BIZWEST.COM (May 2, 2016), http://bizwest.com/colorado-supreme-court-denies-longmont-fort-collins-fracking-ban-appeals/.

30 City of Fort Collins v. Colo. Oil & Gas Ass’n, 369 P.3d 586 (Colo. 2016); City of Longmont v. Colo. Oil & Gas Ass’n, 369 P.3d 573 (Colo. 2016).

31 Sarah Green, Two Anti-Fracking Initiatives to Appear on November Ballot, LAW WEEK COLO. (Aug. 26, 2016), http://www.lawweekonline.com/2016/08/two-anti-fracking-initiatives-to-appear-on-november-ballot/.

32 Id.

33 Id.

34 Mark K. Matthews, Colorado Anti-Fracking Measures Fail to Make Ballot; Possible Forgery Alleged, DENV. POST (Aug. 29, 2016), http://www.denverpost.com/2016/08/29/colorado-anti-fracking-measures-fail-to-make-ballot/.

35 Oil and Gas Initiatives Don’t Qualify for Colorado Election Ballot, INSIDE ENERGY (Aug. 29, 2016), http://www.kunc.org/post/oil-and-gas-initiatives-don-t-qualify-colorado-election-ballot.

Last updated September 2016.

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