A contentious bill overhauling how oil and gas is regulated in Colorado is headed to the governor’s desk after the Senate on Wednesday approved amendments made in the House.
The Senate voted 19-16 — all Democrats said “yes” and all Republicans said “no” — for Senate Bill 19-181, a repeat of the party-line votes through most of the bill’s journey.
The bill makes protecting public health and safety and the environment a priority when considering oil and gas projects. The Colorado Oil and Gas Conservation Commission, the main regulatory body, would no longer be charged with fostering development.
It also allows cities and counties to regulate oil and gas development under their planning and land-use powers, something communities have requested as drilling has increased in and near the growing cities and counties north and east of Denver.
House and Senate leaders will sign the final bill and send it to Gov. Jared Polis, who has been a staunch supporter of giving local communities more say over oil and gas in their borders and prioritizing public health, safety and the environment in decisions on development. It could take a couple of weeks for the bill to be enrolled and printed before making it to Polis’ desk.
Polis “is thrilled to see” the bill pass, according to a statement from his office. He thanked the sponsors and Erin Martinez, whose husband and brother died in 2017 when odorless gas from an uncapped flow line that was attached to a well seeped into the family’s home in Firestone.
Martinez, who was severely injured, spoke to the media and testified in support of the bill.
Since the bill was introduced March 1, hundreds of people spoke for and against it during Senate and House committee hearings. The oil and gas industry and its supporters, including several business organizations and elected officials from energy-producing areas, called on lawmakers to slow the bill down to give people more time to weigh in.
The Colorado Petroleum Council aired TV ads saying a handful of politicians were trying to pass the bill “in the middle of the night to shut down energy production in Colorado.”
Senate Majority Leader Steve Fenberg, one of the bill’s main sponsors, said many of the amendments approved through six committee hearings and debate in the House and Senate were in response to the industry’s concerns.
“A lot of work went into this bill. It is not a perfect bill,” Fenberg said during Wednesday’s Senate hearing. “But I do think it represents a sitting down of various diverse stakeholders to figure out what is the best path forward.”
Language was changed in the House to try to allay the industry’s fears that cities and counties will pass regulations leading to drilling bans or drastically slowing growth in one of the state’s largest industries. Fenberg and House Speaker KC Becker, another of the bill’s prime sponsors, have said nothing in the bill would allow bans and that regulations need to be rational and fair. Amendments revising some of the bill’s language were aimed at making that clear, Fenberg said.
The revised language says state and local regulations must be reasonable and necessary. An earlier version of the bill said the state couldn’t act “arbitrarily or capriciously” when regulating oil and gas, which is considered a higher legal hurdle if the regulations are challenged.
Some of the bill’s proponents said the new language muddies the waters on local control and might discourage communities from passing regulations out of fear of being sued. Sen. Mike Foote, D-Lafayette, said the change is simply intended to provide “a guardrail against regulation without reason or justification.”
“Each locality’s application of ‘reasonable and necessary’ may be different depending, on its circumstances, and should be examined on a case-by-case basis,” Foote said.
One of the legislators who opposed the bill throughout was emphatic about whether the amendments eased his concerns.
“No. I think individual counties can still enact what amounts to a ban,” Sen. Bob Rankin, R-Carbondale, said after Wednesday’s vote.
Rankin added that all he sees the language doing is creating “more lawyer work and court cases.” Rankin, who represents Garfield County, the state’s second-largest oil and gas producer, said he supports incremental changes in oil and gas regulations and believes SB 181 goes too far.
Weld County Commissioner Barbara Kirkmeyer and former Arapahoe County Commissioner John Brackney said Wednesday they will try to put a measure on the November ballot asking voters to annul the changes and create a nonpartisan state regulatory body.
“What we’re trying to do is narrow it to one independent commission and prevent one party or another from politicizing it,” said Kirkmeyer, an outspoken proponent of oil and gas development.
Anticipating the bill would pass, Adams County commissioners in March approved a temporary moratorium on considering new drilling permits to give the county time to revamp its oil and gas regulations. Industry representatives criticized the move as “a glimpse of the consequences” of SB 181.
After the Senate passed the bill Wednesday, the state oil and gas commission said it is delaying an April 20-30 hearing on a drilling plan by Crestone in Boulder County because “the commission itself will be reformed.”
Fenberg and others have noted there are more than 6,000 permits already pending approval from the state. There was a huge influx of applications before the Nov. 6 election and the vote on requiring bigger buffers around new wells. The measure, opposed by the industry, failed.
The legislation changes the commission from a part-time, volunteer body to a full-time, professional one. The amendment reduces the number of members to seven from nine, five of whom will be appointed by the governor. The heads of the state health and natural resource departments will be nonvoting members.
If Polis signs the bill into law, a lot more work lies ahead. The state oil and gas commission and the Colorado Department of Public Health and Environment will have to write rules to implement the law, including new air-quality regulations, new rules for monitoring well flow lines and pipelines and new financial requirements to ensure there is enough money to take care of inactive and abandoned wells.
It will be critical for state officials to work with the industry during the rule-making to minimize negative impacts, the Colorado Oil and Gas Association and Colorado Petroleum Council, both trade organizations, said in a statement.
“While a few critical amendments were added that begin to address some of industry’s concerns and provide a degree of certainty to our member companies, our industry remains firmly opposed to this bill because it threatens one of the pillars of Colorado’s economy,” the trade groups said.
Colorado Rising, the group behind Proposition 112, the failed ballot measure on bigger well setbacks, has been critical of amendments it views as “major concessions” to the industry. Development of the rules will be key, spokeswoman Anne Lee Foster said in a statement.
Several conservation and community groups with members along the Front Range and in western Colorado said the bill’s approval gives the public a much-needed voice and will better protect public health and safety.
“Grand Valley Citizens Alliance members past and present have been working on health and safety issues in Garfield County’s gas patch for over 20 years,” Leslie Robinson, the group’s chairwoman, said in a statement. “We want to thank both House and Senate legislators who made our vision reality — that people will finally have an equal voice about oil and gas development in their neighborhoods.”
Fears about drilling’s impacts have intensified as development has increased and moved closer to homes, schools and public places. The 2017 house explosion in Firestone galvanized the push for tougher regulations after investigators said the blast was caused by a leaking flow line.
“As I’ve said many times throughout this process, with great tragedy should come great change,” Martinez said in a statement. “This is a proud legacy for my husband Mark Martinez and my brother Joey Irwin, who died when our home exploded on April 17, 2017.”
One of the bill’s major provisions deals with forced pooling, which allows a company to drill oil and gas if just one of the mineral owners in an area agrees. A House amendment says at least 45 percent of the mineral owners must agree before a company can drill, lowering the bill’s original threshold from a majority.
Some in the industry said requiring consent from a majority would make it nearly impossible for most companies to drill in a stretch along the Front Range. That’s where Anadarko Petroleum owns a checkerboard of surface and mineral rights stretching over hundreds of thousands of acres.
The Associated Press contributed to this report.
