Colorado Lawmakers Approve State’s Sweeping Oil Reforms

DENVER (CN) – Twenty-eight days after it was introduced, Colorado’s biggest reform on big oil and gas in decades passed in the state House Friday morning by a 36 to 28 vote, potentially changing the entire scope and mission of the state's oil and gas commission.

Although criticized by many industry stakeholders and Republican lawmakers for rushing through the capital without considering the voice of the industry, supporters of the Protect Public Welfare Oil and Gas Operations say the bill’s content should come as no surprise.

“So much of this legislation has been introduced year after year after year and oil and gas never had to take it seriously. They never had to sit down and negotiate with us,” said Speaker of the House KC Becker, D-Boulder, who sponsored the bill. “There’s a lesson here. If you’re going to ignore people for a long time, and suddenly they have a voice, maybe you should have been paying attention the whole time.”

The most fundamental change proposed by the bill is in the very mission of the Colorado Oil and Gas Conservation Commission which would shift from fostering the development of natural resources to regulating them “in a manner consistent that protects public health, safety, and welfare.”

Kelly Sloan, a fellow at the Centennial Institute and industry lobbyist points out that the need to “foster” development and “avoid waste” came from early drilling technology.

“In the early days of the oil industry, we realized we can drill holes in the ground and this wonderful black stuff came up that we could burn, but they didn’t really understand the petrophysics behind it and what they saw was people would drill haphazardly and depressurize fields early,” Sloan said to Courthouse News. “You’d end up leaving 80 to 90 percent of the oil in a particular basin or particular field or particular play unrecoverable.”

Critics most worry the bill will create a backdoor moratorium, as new permits can be paused while new rules are put in place, severely altering the $31 billion industry that the Colorado Petroleum Council says supports more than 232,000 jobs.

"We are deeply concerned about the potential negative impacts of Senate Bill 181, many of which were not considered because the bill’s authors chose to reject what had previously been a customary stakeholder process during the drafting stages,” explained a spokesperson for the council in an email. “Perhaps most troublesome in the bill's language is it’s opening the doors for indefinite moratoria to be imposed by nearly every level of government, down to the municipal level.”

The bill also gives local governments the ability to self-regulate local drilling operations in addition to increasing the number of mineral owners who need to consent in order for forced pooling to occur.

“This is a transformational step forward for a common sense, balanced approach to fracking in Colorado,” said Jim Alexee, Director, Colorado Sierra Club, in a statement. “We applaud leaders in the state, and local officials across Colorado, for their bravery in the face of corporate special interests.”

The bill’s next stop is Gov. Jared Polis’ desk. Polis campaigned on a promise to convert the state’s power supply to carbon-free renewable energy by 2040 and spoke in support of the legislation shortly before it was introduced.

In the weeks leading up to this vote, more than 31,000 Colorado residents joined a Facebook group calling to "Recall Colorado Governor Jared Polis,” citing the "fast track, backdoor legislation for SB 181 advancing.”

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