Conflict feared in oil-gas rules

Feds and tribe say state is infringing on their territory

Gargi Chakrabarty

Thursday, June 5, 2008

Gov. Bill Ritter's efforts to overhaul oil and gas rules in Colorado are facing resistance from unexpected quarters.

The U.S. Forest Service is concerned that the newly proposed rules could create conflicts with existing regulations for oil and gas drilling on federal lands in the state.

The Southern Ute Indian tribe alleges the proposed rules "unlawfully infringe upon the tribe's sovereignty."

And interstate pipeline companies say they already are regulated by federal agencies and that the state is exceeding its legal authority by proposing certain rules for them.

Those positions, detailed in statements submitted to the Colorado Oil and Gas Conservation Commission, add fuel to the oil and gas industry's ongoing criticism of the proposed rules for being overly restrictive.

"Our biggest concern is duplication of existing rules or additional process that might be imposed upon operators on federal lands," said Randy Karstaedt of the U.S. Forest Service. "We think there is lots of potential for duplication between what we have as federal rules and requirements and what the state is proposing."

State officials will meet with the U.S. Forest Service and the U.S. Bureau of Land Management to iron out the concerns they have, said David Neslin, the commission's acting director.

The oil and gas commission is well within its rights to regulate the gathering systems owned by the pipeline companies, he said.

Neslin also reiterated that "nothing in the draft rules would change the COGCC's current approach to oil and gas development on the Southern Ute Indian tribal lands."

"The state Attorney General's Office has explained to Thomas Shipps (attorney for the Southern Utes) that nothing in the proposed rules is intended to change the way the COGCC rules and program either apply or do not apply to tribal lands," Neslin said.

Colorado is in the midst of an oil and gas boom that's expected to continue for a number of years. In past years, state regulators, local residents and activities groups have raised concerns about the impact of drilling on communities.

"The legislature directed us to consider developing new rules that strike a reasonable balance between providing for future oil and gas production, and protecting our environment, wildlife and quality of life," Neslin said. "We have done that in the draft rules."

The COGCC will meet in Grand Junction on June 10 to hear public comments and will make a final decision by Aug. 12. The current schedule requires the bulk of the proposed rules to take effect Nov. 1.

Shipps said the Attorney General's Office, which handles legal matters for the COGCC, initially indicated it would try to reach an agreement with the Southern Ute tribe, which earns a big chunk of its income from oil and gas production on tribal lands.

"The tribe is very concerned about the potential scope of the proposed rules and have sought assurances from the state," Shipps said. "The tribe desired clarification from the COGCC . . . but the AG's office is not willing to engage in detailed conversations until the rules already are made."

Karstaedt of the U.S. Forest Service said the agency is waiting to hear from state officials.

"If we could sit down with the state, that's what we would do to see how we could work together," Karstaedt added.

chakrabartyg@RockyMountainNews.com or 303-954-2976

Timeline

* May 22: The Colorado Oil and Gas Conservation Commission denies a motion submitted by the industry to limit or delay the proposed rules to allow more time for review.

* June 10: The COGCC will hold a public meeting in Grand Junction to hear public comments.

* June 23 - July 1: The COGCC will hold evidentiary hearings in Denver, including four more days in the middle of July.

* Aug. 12: The COGCC will make a final decision.

* Nov. 1: A majority of the new rules will go into effect.

• June 6, 2008

  6:58 a.m.

  Suggest removal

  jacka writes:

  COGA v COGCC = investors/workers v envros/tax-a-holics

• June 6, 2008

  7:22 a.m.

  Suggest removal

  dukeco1 writes:

  The oil and gas lobby, led by COGA and the Americans for American Energy, are pulling out all the stops to hijack the rulemaking so desperately needed to mitigate some of the incredible negative impacts of gas and oil production. They have the money and the lawyers and they are working overtime to stop any effort at meaningful reform.

  Just remember that the slick TV ads with the pretty lady that say they are from " the people of the oil and gas industry" are being paid for out of your pocket. Everytime you see one of those expensive television ads, remember your last trip to the gas pump and your last utility bill. How many millions could be deducted from the price of oil and gas if the industry wasn't saturating the airwaves with propaganda?

  The price of oil and gas are not affected by production costs, so don't let the oil and gas mouthpieces fool you. They want to hang on to the unregulated free-for-all handed to them by the Bush and Owens administrations. Their profits are skyrocketing. In many areas, the impact of that free-for-all have been devastating. It is time for the State of Colorado to put things back in balance.

• June 6, 2008

  9:52 a.m.

  Suggest removal

  jaymoveonorg writes:

  dukeco1,
  How much damage has been done by your liberal, rich buddies that are building 2nd homes up in the mountains. Oil and gas drill leave a well. When these developments come through they leave a house, roads, sewage, and increased pollution.

  Why isn't Ritter looking to restrict these new mega-mansion developments? I am more concerend about these developments damaging our environment but the important question is why are you not?

• June 6, 2008

  9:54 a.m.

  Suggest removal

  zippy66 writes:

  dukeco1 -

  So a 30% reduction in the production of natural gas won't have an impact on prices?

• June 6, 2008

  12:09 p.m.

  Suggest removal

  Woogford writes:

  We need a strong economy to have a clean environment. Let's not let the tail wag the dog here folks.

• June 6, 2008

  12:59 p.m.

  Suggest removal

  Logical writes:

  dukeco1,

  First, you should be more careful with your username - Duke is a big energy company. Are you one of them, and want Colorado to stop producing energy, so you can raise your prices???

  The price of our gas wouldn't drop a nickle if the ads stopped. The majority of the price of our gas is based on the price of the raw ingredient, which our big, bad oil companies don't control. They may be able to control it, if they were allowed to drill for, and produce more, domestic oil. But, those brainwashed by the enviro ads don't want us to produce our own energy. Yet you complain about the high price for energy.

  Currently, Colorado's main energy product is natural gas, which has no impact on our pump prices for fueling our vehicles. We heat our homes with our gas.

  When harping about ads being paid for by us consumers, don't lose sight of the fact that we will also be paying for the increased cost of production due to additional regs, AND we will pay the increase in severance tax, if that pick-pocketing is enacted. Remember, the consumer pays the cost of producing any good. Companies don't print money to pay additional taxes, we (the consumers) pay it.

  Finally, there has not been a free-for-all in the development of energy - there are lots of regs in place right now. Drillers are drilling to up to 16 bottom locations (16 separate wells) from a 5-acre pad, not because it is cheaper to do it (it's much more expensive to drill like that), but because they are regulated. The industry follows plenty of regulations.

  Learn more about the topic before you go spouting your liberal drivel. Go visit the drill areas, both current drill locations, and reclaimed locations. Huge difference. As mwanecek writes, when the drilling is done, the area gets restored, and there will be a wellhead, a few tanks, and underground pipelines. Total visible impact area of maybe 1000 square feet, plus a dirt road. Mega-mansions may be 3000 square feet on the ground, plus a parking apron, plus paved roads, 2 lanes wide. Much more impact.

  Take off the blinders and look at the real (and whole) picture.

• June 6, 2008

  10:14 p.m.

  Suggest removal

  jacka writes:

  No on new Sererance Tax. Don't tax my high priced gas.

  Why can't these politicians get it right?