Jim Cole and Garin Vorthmann
As we look back at the 2017 legislative session, it is important to consider both the societal and legislative pressures that guided this year’s bill-making season.
The Dakota Access Pipeline Issue, the tragic events in Firestone and Mead, all put focus on the safety and regulation of the oil and gas industry in Colorado. Legislators on both sides of the aisle are looking for answers on how best to manage and foster the development of these resources. Below is a recap of some of the oil and gas related bills considered at the Capitol in 2017:
Safety issues were a big topic early in the session and centered around setback distances. Despite a 2013 rule-making that significantly increased setbacks from occupied buildings and a study released in February by the CDPHE showing the current setback distances were sufficient; House Democrats introduced legislation to further increase the distance by which oil and gas production can occur from a school. HB17-1256 died in the Senate on a bipartisan vote but the issue was raised again following the tragic explosion in Firestone. The investigation into the incident concluded that the distance between the home and the oil and gas well was not a factor in the explosion, but proponents of larger setbacks continue to use this incident as a call for expanding setbacks.
The longstanding Colorado law governing the "statutory pooling" of oil and gas resources was next raised as a potential issue. This discussion is being stimulated by the fact that housing development and oil and gas development have moved closer together along the Front Range. This also has become an opportunity for local and national anti-oil and gas activists to become increasingly more engaged on this issue. So much so that some Boulder County legislators worked together to introduce HB17-1336 which would have changed the standards by which statutory pooling could occur. The bill arbitrarily lengthened the notice process to 90 days, required 51 percent control of the minerals, and made proprietary lists of mineral owners and their lease status public. After House passage, the bill died in the Senate Agriculture and Energy Committee, in part because Republicans saw this effort as a way to stop oil and gas development.
Democrats were not alone when issuing “statement” bills, Republicans had some of their own that affected industry. Two were Postponed Indefinitely in the House State, Veterans and Military Affairs Committee controlled by the opposing party. The first bill, HB17-1124, would have required local governments to compensate mineral owners for the value of their minerals if local regulations were approved that prevented the development of the resource.
The second bill, SB17-035, would have increased criminal penalties on those people who tamper with oil and gas gathering systems. Important as it stood, with protests growing more violent at North Dakota’s DAPL, this bill took on a life of its own – critics saying that it was a symbol against Freedom of Speech. After passing in the Senate, this bill was Postponed Indefinitely in the House.
Eventually there was room found to work together, but cooperation was short lived. A bill, HB17 -1116, that extended the Low Income Energy Assistance Program (LIEAP) was passed, as was HB17 -1285, which increased fees on industrial water users culminating a two-year process to also preserve a general fund commitment to funding the state's water quality program.
Bipartisanship however was short-lived and before the end of session there was a breakdown in cooperation. Late in the cycle came two bills that were contentious. The first was a bill inspired by the Firestone explosion, HB17-1372. It would have required the state to retain a map of all flow lines and all oil and gas infrastructure. The second was SB17-301, “Concerning Energy Related Statues”. This bill, introduced in the waning days of the session, was a target for amendments. Because of its broad title, it had challenges from the beginning. Utilities, oil and gas, and environmentalists could not come to an agreement on future energy portfolios and the bill died on the last day of session, which resulted in the defunding of the Colorado Energy Office (CEO). The Governor threatened special session to remedy this, but eventually decided against it.
Although the legislative session has adjourned, discussions continue on a variety of oil & gas related issues. Representative Lori Saine (R-Firestone) and Senator Vicki Marble (R-Loveland) are holding informational sessions to discuss safety and pooling issues. House Democrat leadership have also indicated an interest in having a dialog regarding statutory pooling.
Societal and political pressures will continue to mount. Elected officials will be looking to provide information to their constituents, while also watching the atmosphere of the 2018 election, when Colorado voters will decide the next governor. It’s more important than ever for the oil and gas industry to remain engaged with stakeholders, elected officials, and citizens to ensure we are providing transparent and factual information about the good work and benefits our industry provides to the state.