Colorado’s New Local Control Oil and Gas Rules Fuel Ballot Battle

Although state officials finalized new rules to give local governments more input on oil and gas drilling in neighborhoods last week, Colorado is gearing up for a major battle at the ballot box in November as grassroots anti-fracking groups look to give towns and counties total control.

The Colorado Secretary of State’s Title Board will consider 11 proposed ballot measures aimed at everything from giving local governments greater control over the state-regulated industry to increasing setbacks of rigs away from homes and schools up to three quarters of a mile. Two more proposed initiatives would impose an outright ban on the controversial drilling process of hydraulic fracturing and guarantee Colorado residents the right to a healthy environment.

Proponents of the initiatives, which have been in the works since last fall, say they will narrow the 11 ballot questions down to just one or two next month. All 11 would amend the state’s constitution if passed by voters. If approved by the secretary of state, the proponents—Coloradans Resisting Extreme Energy Development—have until Aug. 8 to gather 98,492 valid signatures of registered voters on each measure in order to make it on the Nov. 8 ballot.

“We will not be gathering signatures for all of our issues, probably one or two. The final decision will be made by our board [this] month,” said CREED Executive Director Tricia Olson, who added her group does not yet have any major funders. “CREED was formed by the grassroots and has been funded so far by the grassroots.”

Opponents of the initiatives such as the issues committee Protecting Colorado's Environment, Economy, and Energy Independence say they have yet to decide on countermeasures like the two pro-industry initiatives that were floated but ultimately pulled in 2014 in response to a pair of anti-fracking questions that were backed but later pulled by U.S. Rep. Jared Polis, a Democrat from Boulder.

“Regarding pro-industry measures, we haven’t made any decisions yet, but are considering all our options,” PCEEEI spokeswoman Karen Crummy said. “These extreme and irresponsible measures would kill jobs, ignore established laws and devastate Colorado’s economy.”

Polis in a statement last week discounted the new state rules, which resulted from a deal he struck with Gov. John Hickenlooper in 2014 to pull his two ballot questions—one of which mandated a 2,000-foot setback. Hickenlooper set up an oil and gas task force to recommend local-control rules, but after 18 months of deliberation both sides were dissatisfied.

The state maintains primacy in regulating oil and gas drilling, but community activist groups have been pushing hard for greater municipal and county control over where companies can drill in increasingly populated areas around the state.

“Setbacks and giving communities a legitimate say on what kind of industrial activity is appropriate in backyards and schoolyards are reasonable solutions that ought to be considered,” Polis said in a prepared statement.

Current state regulations require drilling operations to be set back at least 500 feet from homes and schools. On the high end, CREED is proposing a 4,000-foot setback, which is three quarters of a mile, and on the low end 2,500 feet, which is about a half mile.

The newly adopted COGCC local-control rules require notification and consultation with local governments when major drilling operations are proposed in “Urban Mitigation Areas,” but some towns and counties want actual control over whether companies can drill within their boundaries and where that drilling can occur.

“We need to do something to give local governments the power to say this is where we want this industrial activity,” said state Sen. Matt Jones, a Democrat from Louisville. “You can’t keep dropping industrial operations into neighborhoods and affecting residents’ property values and having to fear for their children with gasses that come off wells. As that dynamic goes on, you’re going to see ballot measures.”

With split control of the State Legislature by Democrats and Republicans, lawmakers on both sides of the aisle say legislative fixes will be elusive, although they hate to see the matter resolved at the ballot box. Republicans say the beleaguered oil and gas industry, with prices plummeting in recent months, has been regulated nearly to death in Colorado.

State Sen. Ellen Roberts, a Republican from Durango whose district includes heavily drilled La Plata County, said many new laws and rules were passed in recent years to change the makeup of the state regulatory board called the Colorado Oil and Gas Conservation Commission, and that it’s time to draw a line in the sand and oppose additional layers of regulation.

“We did plenty in the last number of years, particularly under Gov. [Bill] Ritter, with the remake of the COGCC,” Roberts said. “We have public health and environment on there. Parks and Wildlife has a representative on the COGCC.”

But Jones said the governor’s task force, which he feels had a prohibitive two-thirds majority requirement, could have headed off the ballot battle with one failed recommendation that was made by former Republican Colorado Supreme Court Chief Justice Rebecca Love Kourlis that would have changed the COGCC’s mission from “foster” oil and gas drilling to “administer.”

“Now that would have been a nice step forward, but because of the two thirds majority it was not a recommendation,” Jones said. “It’s too bad that we didn’t figure something out, but until we address dropping these operations into people’s neighborhoods, it’s going to just keep churning.”

However, Roberts said the reconfigured COGCC makes sense, and that numerous rules have been put in place to give local communities more say.

“I actually supported many of the bills that went through in terms of leveling the playing field between the communities and the industry on things like environmental quality type stuff, but there’s a point where we have to stop trying to pass new laws and let the ones that we passed in that short period of time work,” Roberts said.

With split estate laws that allow separate ownership of subsurface mineral rights and the property that sits on top of oil and gas fields, conflict is inevitable. However, even some advocates of greater state control over federal public lands say that local control should not trump private property rights when it comes to oil and gas drilling.

“They are not calling for local control,” state Rep. Gordon Klingenschmitt, a Republican from Colorado Springs, said of the ballot initiative proponents. “They’re calling for smaller government to steal private property from the citizens who already have deeds to their property. It’s the opposite of local control when you authorize government theft of private property.”