State gets first say over gas drilling with new rulemaking

Four counties affected by new rule

Oil and gas companies hoping to drill in Gunnison County will need permission from the state first, according to a new rule tentatively approved by the Colorado Oil and Gas Conservation Commission last Wednesday, September 10.

The state approval would be required in addition to the current permitting process associated with mineral extraction from land in the county. The rule also requires more detailed information to be submitted to the commission for every new well drilled in the state, even where approval of the site is not required.
Gunnison County was added to an original list that included Mesa, Garfield and Rio Blanco counties, all of which have experienced a boom in oil and natural gas exploration because of their location in the Piceance (pronounced PEE-awnce) Basin, said to have one of the largest natural gas reserves in the nation.
Being added to the list of counties requiring approval was the work of county attorney David Baumgarten, who was the liaison to the commission.
“With respect to this rule, David Baumgarten had urged the commission to have it applied to all counties in the state, but if they weren’t going to apply it to all counties then he wanted to apply it to Gunnison,” says Tréci Houpt, an oil and gas commissioner and a Garfield County commissioner.
The southeast corner of the 7,000-square-mile Piceance Basin overlaps the northwest corner of Gunnison County, although to a lesser degree than the other three counties included in the rule. However Moffat, Pitkin, Montrose and Delta counties are also inside the basin but were not included in the rule.
“Gunnison County has been very involved in this rule-making process and wanted to be part of the pilot process to see if this was a good approach to permitting drill sites,” says Houpt. “I also made the arguments that it would make more sense to make it basin-wide, but the rest of the commission was more comfortable with just including Gunnison County.”
In addition to natural gas, water is an abundant resource in the Piceance Basin. Of the more than 2,200 water wells that have been drilled in the basin, 90 percent reach water in less than 300 feet, according to the Colorado Geological Survey.
Of the counties that draw water in the basin, Gunnison County gets the least, but because the natural gas occurs much deeper, there is a risk in contaminating the aquifer with natural gas being extracted.
“All along David [Baumgarten] and the county have taken an active interest in mitigating the effects of oil and gas exploration in the county,” says county manager Matthew Birnie. “The rule called for stricter conditions regarding the protection of water and that is something that has always been a part of the plan.”
While the “energy master plan” governing natural gas production in Mesa County, for example, is “focused on natural gas exploration and development in the Plateau Valley and the east end of the county,” Gunnison County takes a different approach.
In Gunnison County’s regulations for oil and gas operations, “the goal is to provide a framework for the responsible exploration and production of … gas resources” in a way that emphasizes the mitigation of the negative impacts such operations can have.
That more conservative approach is another reason that the county wanted to be included in the rule.
“What our inclusion in the rule did was align the state’s regulatory regimen with our own,” says Birnie. “Instead of bringing our regulatory standard to the level of the state, the state Oil and Gas Commission is now going to be held to our standard, which is actually more stringent.”