Gunnison County adding new oil and gas regulations and oversight: Part 2

SG Interests gets more than they ask for

Last week we looked at the energy boom that took hold in Gunnison County in 2005. This week we’ll look at ways the county is trying to tighten its regulations to add protections for wildlife and water resources and how some local industry leaders are pushing back.

For the majority of Gunnison County residents, the oil and gas industry is a benevolent, and largely silent, neighbor. Last year the county collected more than nearly a half-million in severance taxes, and a part of that comes from the oil and gas industry.
But concerns are being raised around the country regarding the methods employed to extract the natural gas. Now people closer to home wonder if the industry that has operated in the county since the 1950s will make its presence known with effects on wildlife and water.
Despite the boom in development in 2005, in the last couple of years the county has averaged only two applications for natural gas development. Currently there are three applications out; two of those are pending because they are in the Clear Fork Roadless Area.
The third application, however, is for a series of McIntyre flowback ponds that are used in the storage of hydraulic fracturing fluids, which are pumped into the ground under extreme pressure to break open the gas-containing seams. The smallest of the ponds, if approved, would be 1.6 million gallons and the largest would be six million gallons (or more than nine Olympic-size swimming pools) indicating a need to expand capacity for the “fracking fluid” by a lot.
And the fracking fluid itself has raised a lot of concerns around the country. Critics claim the fluid contains dangerous chemicals, but no one outside the industry really knows. Companies were exempted from disclosing the exact contents of the fluid through a change to the Clean Water Act. The information has since been protected as “proprietary.”
Members of the county Planning Commission have been discussing the new concerns and information about the technology and its impacts. Before the next run on Gunnison County gas happens, the commissioners are looking for ways to strengthen their regulations to protect water and wildlife, which are abundant in the North Fork Valley.
One problem with the area getting the most attention from prospectors is the area itself, which can be extreme. Many of the gas leases are in terrain that doesn’t lend itself easily to drill rigs.
Throw in a Gunnison County regulation that requires the rigs be at least 500 feet from a perennial or seasonal body of water, and finding an appropriate drilling site on a particular lease can become impossible.
As SG Interests looked for a way to shrink that gap between water body and drilling operation from 500 feet to 300 feet in some of its more constricted leases, the Planning Commission found an opportunity to make some changes of its own to the regulations.
On June 1, the county commissioners granted SG Interests’ request and voted to initiate the process to amend the county’s Temporary Regulations for Oil and Gas Operations. SG Interests was hoping to gain 200 feet of leeway in the regulations. What they’ll likely get in the end will be a lot more than they were bargaining for—in a different way.
In addition to likely granting SG Interests’ request to adjust the setback requirement, the commissioners have also included a proposed requirement to restrict any drilling operation within 1,000 feet of a water body unless it includes a pitless drilling system, a fully contained system for its fracking fluid and impervious berms around the storage tanks big enough to hold 50 percent more fluid than the largest tank.
The Planning Commission is also asking that no more than two storage tanks be surrounded by a single berm and that the companies make the berms available for inspection.
If the amendments are adopted as drafted, applicants hoping to get a county permit to drill for gas will also have to locate and test the water in all domestic wells within a mile of a proposed operation, on top of the current requirement to locate and test all other sources of water, including municipal intakes.
The commissioners are also demanding a nine-point checklist to determine water quality in the vicinity of new wells, testing everything from pH to the presence of metals or methane.
All of the new requirements are on top of an amendment that would require drilling applicants to manage their hazardous materials and pollutants in specific ways.
SG Interests let the county know that they aren’t happy. In a letter from attorney Ken Wonstolen, SG Interests argues that the federal and state agencies do a fine job of regulating water quality close to drilling sites.
Wonstolen wrote, “The petition [to amend the rules] pointed out that this comprehensive regulatory regime addresses every possible consideration pertinent to meeting the Water Quality performance goal of the regulations…”
With regard to the proposed new setback rules, Wonstolen wrote, “The proposed amendments apply to areas within 1000’ of the ‘high water mark of the closest water body;’ in other words, virtually every pond, wetland, ditch, cow pond, creek or stream—perennial, intermittent, or ephemeral—in Gunnison County.”
Wonstolen ends the letter by asking the Planning Commission to “set [the proposed amendments] aside and direct the county staff to start over, based on the well-reasoned proposal presented by SG in its petition for rulemaking.”
But that didn’t appear likely to happen on Friday, September 3, when the Planning Commission voted to pass along a recommendation to the County Commissioners regarding a few amendments to the Regulations for Oil and Gas Operations that will require fees be paid at the time an application is submitted. The county commissioners set a public hearing for October 5 on those amendments at a meeting the following Tuesday.
The Planning Commission will get a presentation from the Colorado Oil and Gas Conservation Commission, the state’s major regulatory body, on the state’s regulation of oil and gas next month, and it should be several months beyond that before the final round of amendments is ready for final consideration.