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Colorado’s Collaborative Approach to Fracking Regulation

Updated: Jun 6, 2020

Photo courtesy of Energy Data Exchange

Following November’s elections, five northern Colorado cities now ban fracking within their city limits, though there will certainly be lawsuits challenging cities’ authority to do so (one such case is already filed). The majority votes on these ballot initiatives are ironic given Colorado’s national leadership for more than a decade in pursuing regulations that strictly limit impacts of oil and gas operations, including fracking.

 Also in November, Colorado announced new regulations on methane leakage from fracked wells – a consensus approach that resulted from cooperation of the State, the industry, and environmental groups. The new rules will require installation of systems to prevent methane venting and regular testing for leakage. They also include retrofitting for existing wells.

The industry participated voluntarily in this process for a simple reason: Fracking has become so controversial that companies absolutely must demonstrate that their drilling operations are safe and environmentally sustainable. This cooperation was nothing new. Companies operating in that State have a history of such collaboration with State regulators and public interest groups.

Two years ago, industry representatives worked closely with the State and some of the same environmental groups on rules governing the disclosure of fracking chemicals. They demonstrated the benign nature of the chemicals so successfully that Governor John Hickenlooper (himself a former geologist with fracking experience) drank a glass at a press conference, while reassuring the public that no contamination of water had ever occurred as a result of fracking.

Without the companies’ involvement in these negotiations, the result could have been what many environmental groups initially sought – a complete ban on fracking, if not a complete ban on all oil and gas drilling.

A decade earlier, when I was director of the Colorado Department of Natural Resources (which includes the regulatory Oil and Gas Commission), we instituted the first-ever requirement for directional drilling as a condition of permits. Though initially skeptical, the companies not only accepted the practice, but eventually led the nation in recovery of large quantities of natural gas from very small underground deposits – and did so with smaller surface impacts than had ever been thought possible.

Today, Colorado public opinion is divided, to put it mildly, on energy issues. The growing economy is stronger than it has been for several years, largely because of the energy boom brought by new development of massive natural gas reserves. At the same time, the State’s environmentally-sensitive population includes many of the country’s most vociferous anti-energy groups, anti-fracking activity, environmental fund-raisers and litigators.

So against that contentious backdrop, it is clear that the energy boom and resulting economic growth are made possible only because of the State’s careful regulation of environmental impacts.

That delicate balance is never perfect, of course, but Colorado’s leadership in threading the needle could be a national model. Across the country, new wells are being drilled daily as Americans become more dependent on their new-found wealth of natural gas. It is enough for several future generations even at current growth rates, and it is here to stay.

Still, some environmental activists see natural gas only as a “bridge fuel,” something to tide us over until we reach the perfect utopia – a world where energy comes from the air without any impacts on anything anywhere. Because that dream is so pervasive, there remain many opponents who simply oppose all drilling, whether done responsibly or not, because it may prolong our dependence on fossil fuels. That is an unrealistic view, and a minority one, but nevertheless loud and well-funded enough that it cannot be ignored.

That is why the Colorado approach to collaboration makes more sense. At Dawson and Associates, we always advise clients that industry must be at the table to ensure regulations are sensible and will actually accomplish the environmental goals. Practical regulations are an essential part of the world we now inhabit, so making sure they work as intended is the only acceptable approach.

Greg Walcher Senior Advisor

During his service with the State of Colorado, Greg helped negotiate settlement of the largest Western water case in U.S. history.


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