Gas industry criticizes rulemaking process

GLENWOOD SPRINGS - Drafting new rules for oil and gas development can be stale, bureaucratic mumbo-jumbo for some.

But for oil and gas companies in Colorado, the ongoing process to update the state's current rules is anything but that. In fact, some energy officials say it is the most pressing issue facing the industry in Colorado.

"This is the No. 1 issue for the industry in the state," said Meg Collins, president of the Colorado Oil & Gas Association.

Some in the industry have criticized the Colorado Oil and Gas Conservation Commission for not allowing industry experts to bring "technical expertise" to the table when the agency drafted its "initial pre-draft rulemaking proposal" this fall.

They have also criticized the proposed rules they have seen so far as a "one-size-fits-all" approach.

Companies such as EnCana Oil and Gas (USA) and Williams Production RMT have said the new rules could delay the issuing of permits by up to seven months, put contracts with surface and mineral owners into jeopardy and create uncertainty for companies.

Collins, EnCana's Doug Hock and Susan Alvillar of Williams all offered their opinions about the new rules during a visit at the Glenwood Springs Post Independent on Friday.

Implementing legislation

The COGCC, in late November, issued its initial proposal for rules the agency may implement as it moves forward with implementing House bills 1298 and 1341. The 2006 legislation expanded the focus of the COGCC to consider public health and wildlife impacts and require use of best management practices to minimize harm from oil-and-gas development.

Dave Neslin, acting director of the COGCC, said a typical rule-making process is that "you publish rough draft rules, and then you have comment and a hearing on the draft rules, and the agency makes a decision."

"What we have done is create another layer, a layer before we publish the draft rules, and that is why I refer to this initial proposal as an initial, pre-draft proposal. We wanted to get something out that the public can react to, can consider and can give us feedback on. We are going to use that information in preparing the draft rules."

The response from industry

But Collins and other industry officials were critical of the proposed rules. She said there was little industry involvement when the COGCC, along with staff from the Colorado Division of Wildlife and the Colorado Department of Public Health and Environment, drafted the preliminary rules last fall. Many industry officials and representatives made the same comments during a crowded meeting, dominated by industry workers and officials, about the new rules at the Battlement Mesa Activity Center Thursday night.

"Industry has not been part of the process to date," Collins said.

Hock, of EnCana, said the company and some industry officials had conversations with the COGCC as the proposed rules were being developed, but that the industry did not see "anything substantial where we felt that we had an opportunity to provide input and to really to get at the meat (of the new rules)."

However, Neslin said the agency reached out to about 30 to 40 "stakeholder" groups, including the oil and gas industry, agricultural interests, local government organizations and environmental, sportsmen and wildlife groups during the development of the rules.

The pre-draft rules, which were published as a 28-page document that is available at the COGCC's website, said that agency met with the COGA, the Colorado Petroleum Association and individual companies such as EnCana, Noble Energy, Bill Barrett Corp. and Pioneer Natural Resources.

"We invited them to submit their thoughts to us, about what they thought an effective way of implementing (HB 1298 and HB 1341) would be," Neslin said. "Some groups chose to do that at that stage, some didn't. Several of the environmental groups provided us with input. The oil and gas industry didn't. They may have decided they wanted to hold their input for the stakeholder work groups that are going to get started."

Moving forward

Four more meetings about the new rules will be held in Greeley, Wray, Durango and Trinidad. And on Tuesday, the first in a series of stakeholder meetings will be held. They will include members from the oil and gas industry, environmental groups and local governments. The meetings, which are open to the public, will allow participants to "work through the pre-draft proposal and really get into the details" of the rules, Neslin said.

"Where there are concerns, we will ask how we can address those concerns," Neslin said.

Collins said the stakeholder meetings will be the first real opportunity for the industry to offer its input into the new rules. Schedules for the stakeholder meetings are available at the COGCC's website at oil-gas.state.co.us.

"We are looking forward to being a part of the process," Collins said.

A preliminary draft of the new oil and gas rules, which would include public comment input from the four meetings and the stakeholder meetings, is expected sometime in March. Adoption of the final rules is expected by July 1.

Contact Phillip Yates: 384-9117pyates@postindependent.com



Post Independent, Glenwood Springs, Colorado CO