Colorado's Oil and Gas Industry Could See Big Changes Coming

Colorado's tensions over oil and gas production have threatened to boil over this year. The state's influential and fast-growing industry faces the prospect of big crackdowns from the state Legislature and the possibility of statewide ballot measures curbing drilling. So far, the legislative session has been short on big overhaul proposals. But does that mean the debate has died down? Hardly. Colorado's energy industry still could see big changes coming – not all of them from the Capitol. The meteoric rise in energy production in populated areas of the state is driving new attention to the impacts of oil and gas extraction on health and the environment. Colorado's oil production broke 50-year records both of the last two years. And new technologies have allowed drilling much closer to homes and businesses.

"No one wants to wake up to see a drilling rig across the street from your front yard. That has to be addressed, and I think there is interest in momentum," said Pete Maysmith, head of Conservation Colorado.

So far, Democrats who control the Legislature seem to be deferring to Gov. John Hickenlooper, who has urged lawmakers to go slow on efforts to increase oversight on the industry. Instead, the Democratic governor is talking up his administration's plans for tougher air quality checks. A big reason Hickenlooper wants lawmakers to stand down on big drilling measures is because his plans will not need a new law. The Air Quality Control Commission, part of the Health Department and, therefore, the administration, has proposed oil and gas industry rules that include the first statewide methane emissions limits and new emissions controls on storage tanks, a major source of emissions of volatile organic compounds such as propane and ethane, which contribute to ozone pollution.

"We are really, I think, beginning to rebuild the trust between the oil and gas industry and the people, which I think is crucial, for all of us," Hickenlooper told the Colorado Association of Commerce and Industry Thursday.

But the changes won't take effect without controversy. The first public hearing has been scheduled for three full days, and it's been moved from the Health Department to a larger venue because of the anticipated crowds. "The air quality rule is critical to how we're going to deal with oil and gas in Colorado," Maysmith said. Some energy producers are on board with the changes, but not all. And there will be many rounds of negotiations over nitty-gritty details.

For example, the administration has projected the air quality upgrades will cost oil and gas producers about $30 million. The Colorado Petroleum Association puts the tab at $100 million. "There are some significant areas that need further discussion," said Stan Dempsey, the association's president.