It was a collective sigh of relief heard ‘round the state.
Two months ago, Colorado Gov. John W. Hickenlooper managed to pull off what many call the compromise of the season – the political season, that is, in a state that has been dragged into a months-long, messy battle between the oil and gas industry and politicians and activists who oppose drilling on various levels.
On Aug. 4, Hickenlooper agreed to a deal that kicked two anti-hydraulic fracturing initiatives off the November ballot in exchange for the creation of a task force that would work to find ways for “responsible energy development,” as stated by Colorado media.
Had both initiatives remained on the ballot, the public would have been responsible for ultimately deciding the future of the energy industry in the state, which in 2012 realized $30 billion in economic activity and $1.6 billion in public revenue as well as the creation of 111,000 jobs, according to the Colorado Petroleum Association. This would have been the first statewide vote in the country on whether or not to tighten rules on energy development.
“To leave this up to the ballot and for citizens to vote on it – that was promising to be the most contentious fall we would have had in Colorado,” said Steve Sonnenberg, past AAPG president, and professor and Charles Boettcher Distinguished Chair in petroleum geology at the Colorado School of Mines.
He explained that the average person should not have to sift through highly technical information to make decisions that affect millions of dollars in investments and the state’s energy security and financial solvency.
“The biggest accomplishment is the governor getting both sides to the table and getting them to be willing to compromise,” he said. “It’s a big deal. I think everyone is feeling pretty good about it. It’s a huge step forward and I think the people who are coming to the table need to be commended for their willingness to assess issues and their undoubted ability to compromise on these issues.”
Two chairs and 19 members of the task force were appointed in September representing local governments and environmentalists, civic and business leaders, and industry representatives are currently being selected.
Two are AAPG members: Peter Dea of Cirque Resources and Dan Kelly of Noble Energy – both based in Denver.
“I am looking forward to working with a diverse group of stakeholders to recommend mutually agreeable ways to move forward which respect the rights of mineral owners, citizens and businesses,” Dea said. “Fortunately there are many good examples currently in place where local citizens and industry have worked out solutions that protect the environment and respect local concerns while providing many local workers well paying jobs as they responsibly produce the products that all Americans depend on for our quality of life - from transportation, electricity, heating/cooling, medical products, outdoor recreational products, clothing and growing and delivering food.”
Looking For Answers
Many are looking to Dea and others on the task force to resolve a host of issues that have been the source of constant contention in the state, said Doug Flanders, director of Policy and External Affairs for Colorado Oil and Gas Association.
Prior to the compromise between Hickenlooper, a former AAPG member, and his major opponent, U.S. Rep. Jared Polis – who backed both ballot initiatives, concerns over setbacks, pollution, traffic, land reclamation, and permitting filled the mountain air and practically every Coloradoan’s television screen on a daily basis.
The pulled initiatives aimed to increase setbacks from 500 feet to 2,000 feet, as well as give local communities the majority of control over drilling for the first time in history.
Ironically, industry and local communities have been addressing such concerns for quite some time. Noble recently worked with the Environmental Defense Fund, Anadarko Petroleum Corp. and EnCana Corp. to develop language for some of the most stringent air rules regulating hydrocarbon emissions in the country.
“We want to keep methane in the pipe and out of the air,” said Ted Brown, senior vice president of Noble. “It is the right thing to do.”
Noble also is systematically developing its acreage in the DJ Basin to reduce impacts through integrated development plans (IDPs) that cover an area of roughly 100 square miles. Each IDP is developed with a comprehensive design for infrastructure to reduce truck traffic by installing a full network of pipelines to move oil, natural gas and water.
“This long-range planning enables us to sit down with local communities and stakeholders to talk to them about our development plans early in the process. The use of our first IDP in the DJ Basin – incorporating horizontal drilling, pipelines and a central processing facility – makes it possible to reduce the need for tanks on location – saving 626,000 tons of carbon dioxide emissions from trucks, which is equivalent to 66,000 SUVs taken off the road for 10 years,” Brown added.
Furthermore, Noble and Anadarko created Coloradoans for Responsible Energy Development (CRED) in 2013 to explain in simple terms all that industry has done to “go the extra mile” to address community concerns, especially regarding the heart of the state’s energy debate: hydraulic fracturing.
“Fracking (sic) has been safely used over 1.2 million times since 1947,” the CRED.org website states. “Today more than 90 percent of oil and gas wells undergo fracking at some point during their lifespan, and neither the Environmental Protection Agency nor the Colorado Oil and Gas Conservation Commission have ever found a connection to chemicals entering our groundwater as a result of the fracking process.”
The task force has its job cut out for itself, Flanders said.
“At the end of the day, we have to identify the problem we are trying to address,” he said. “What’s the question? What’s the issue? What’s the problem?”
“Once this process gets started,” he added, “a lot of people will realize the questions they have already have answers.”
Common Ground
In Colorado, a robust engagement process that includes a “local government designee” has been very successful at bridging gaps between industry operations and concerns at the local level, Flanders said.
He added that many on the task force may soon learn that many avenues to compromise are already in place and simply haven’t been used because people don’t know they exist.
Even after Colorado cities such as Longmont, Fort Collins and Broomfield worked with the industry to successfully develop memorandums of understanding as forms of compromise at the local level, some activists in Longmont and Fort Collins later put bans on the ballot to ban drilling altogether, Flanders said, hinting that concerns about hydraulic fracturing might really be a facade.
“Is this really about regulatory issues that government is able to address,” he asked, “or is this really about banning oil and gas?”
In the last month, two Colorado district courts have found in August that local bans on hydraulic fracturing violate state law. In an act of good faith, Hickenlooper chose to withdraw a 2012 state suit against Longmont for banning hydraulic fracturing as part of the compromise.
It is reported that the task force will be able to make recommendations based on a two-thirds majority vote. Setbacks are one of the issues surely to be discussed.
While some might believe that increasing setbacks to 2,000 feet will ease landowners’ fears about wells drilled too close to their homes, an increase in setbacks can actually stir up additional controversy, Flanders explained.
A landowner who approves a well on his or her property may find that well is within 2,000 feet of a neighbor’s home. If the neighbor doesn’t approve the sitting of that well, he or she could prevent the landowner from approving the well.
“It’s like your neighbor across the street telling you that you can’t park in your own garage,” Flanders said. “The further the setback, the more neighbor-to-neighbor conflict you create. The landowner can say ‘yes’ to the well, the mineral owner can say ‘yes,’ and the third party with no interest in the well or the mineral rights is telling the two private property owners that they can’t access their property.”
Such predicaments will be placed in the hands of the task force. However, rather than worry about the nitty-gritty at this point, most are simply breathing more easily that all sides are willing to work to find a compromise.
“We are happy the initiatives are off the table now,” Flanders said. “We are not having to argue on the edges. When you make a technical issue political by putting it in the constitution, the argument doesn’t go to a compromise. You have to argue in 5-second, 10-second and 20-second sound bites – so now we can have a real conversation.
“We are hoping the members on the task force will approach it in a way of conversation: discussion and understanding rather than fighting and disagreement and angry discourse,” he said. “If it’s the latter, it will be difficult to find common ground.”