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Fracking bills: regulations in search of problems

Two bills concerning hydraulic fracturing can be summarized best as excessive regulations in search of problems. I consulted with Doug Flanders, director of policy and external affairs for the Colorado Oil and Gas Association (COGA), who provides a summary of each bill citing statistics from the Colorado Oil and Gas Conservation Commission (COGCC), the state agency charged with the “responsible development of Colorado’s oil and gas natural resources.”

Bill Summaries

HB12-1173 Restrictions on the Use of Open Pits in Connection with Hydraulic Fracturing

House Sponsors: Roger Wilson (D-HD 61)

Senate Sponsors: None

Rep Wilson wants to ban all hydraulic fracturing open pits. It’s a little like other “zero tolerance” policies, which always have negative unintended consequences. Besides, the trend already is toward a closed loop system as Flanders explains:

According to the COGCC, the percentage of well pads utilizing closed loop or pitless drilling systems has increased from 31% in January 2010 to 79% in March 2011 and that number continues to rise.  The COGCC considers many factors when reviewing permit applications for surface operations, all of which are designed to protect the health, welfare, and safety of the surrounding population. COGC Rule 907 provides general requirements to ensure that exploration and production waste is properly stored, handled, transported, treated, recycled, and disposed. Operators are encouraged to: reduce the quantity and toxicity of their waste; recycle, reuse and reclaim it; treat it to reduce toxicity; and dispose of it in a manner that protects the environment. Several of the 900 Series Rules require simple practices for reducing waste toxicity and volume, including: removing oil and condensate before produced water is placed in a production pit (Rule 907.c) and subsequent removal of any accumulation within 24 hours (Rule 902.c).

Prediction: Rep. Wilson apparently is not a fan of hydraulic fracturing, but the majority of House members are. This bill dies in committee.

HB12-1176 Oil and Gas Surface Owner Horizontal Drilling Setbacks

House Sponsors: Su Ryden (D-HD 36), Dickey Lee Hullinghorst (D-HD 10), Matt Jones (D-HD 12), Nancy Todd (D-HD 41), and Wilson

Senate Sponsors: None

Another bill going after hydraulic fracturing with a reasonable sounding title, but in reality the details reveal burdensome and unnecessary regulations with severe negative consequences including reducing the regulatory discretion of the COGGG. Most dangerous is the expanded definition of “surface owner” which would allow for the violation of private property rights as Flanders explains in his summary:

COGCC has already looked at wells in subdivisions and determined 300 feet as the appropriate distance for public safety in high density residential areas. However, at their discretion, the COGCC can determine that a greater distance is required.  COGCC has been tracking setback metrics since the adoption of the amended rules on December 17, 2008.  Of the 4836 well locations sited during this period, 91% or 4410 are 500 feet or greater from a building structure. (And buildings are often not residences.)

The value of the surface to homebuilders should be considered in determining any setbacks.  If there is an existing well, then any new homes or schools would also have to be 1000 feet from the existing well.

The bill also changes the definition of a surface owner to be more than just the owner of the land where the oil and gas operations occur, but would also include any land which overlays the horizontal path of the operations if hydraulic fracturing occurs, despite that fact that horizontal drilling can extend over one mile in length and over a mile and half in below the surface.  This would unnecessarily hinder drilling operations below surface that would not impact surface buildings.

Prediction: Reason will prevail in the House. This bill will die in committee.

Final Thoughts

Those who thought environmentalists would tolerate development of natural gas as a “clean” technology along side wind and solar were mistaken.

There could be one less sponsor of anti-fracking legislation next year, Rep Wilson was drawn out of his current House district and will not seek re-election.

Remember to check the energy blog for updates on all energy legislation. We read this stuff so you don’t have to.