Dems Advance Anti-Drilling Bill Despite Opposition from Governor

March 29, 2013

The bill is one of several designed to crack down on the oil-and-gas industry in response to an outcry over drilling by environmentalists

DENVER–Unless they try to ban microbreweries, Democrats are unlikely to introduce anything less appealing to Gov. John Hickenlooper this year than House Bill 1269, which would overhaul the Colorado Oil and Gas Conservation Commission (COGCC).

Even so, the House Transportation and Energy Committee approved the bill Thursday by a vote of 7-5, despite a blunt warning from a member of the executive branch.

“We can’t support the bill as it’s been introduced,” said Bob Randall, deputy director of the Department of Natural Resources.

The bill would prohibit oil-and-gas company employees from serving on the COGCC, which oversees the industry. Three of the commission’s nine members are now designated as industry experts and work for oil-and-gas firms.

That’s far fewer than the seven industry members who previously held seats on the commission before 2007, when Democratic Gov. Bill Ritter and the state legislature reworked the panel to incorporate representatives from local government, the reclamation industry and environmental groups.

Still, state Rep. Mike Foote (D-Lafayette), backed by testimony from environmentalists, Colorado Common Cause and Colorado Ethics Watch, said the public had lost trust in the commission as a result of what he described as an inherent conflict of interest.

“This bill is about restoring the public’s trust in the way we regulate oil and gas production here in Colorado,” said Foote. “When it [the commission] goes about its business with paid industry members as voting decision-makers, it just cannot overcome the appearance of impropriety and the widespread perception that the fox is guarding the henhouse.”

The bill is one of several designed to crack down on the oil-and-gas industry in response to an outcry over drilling by environmentalists and some local governments. City councils in Longmont and Fort Collins have already voted to ban hydraulic fracturing in defiance of state regulators.

A former geologist, Hickenlooper has made no secret of his support for drilling–he’s appeared in an ad for the oil-and-gas industry and even taken a swig of fracking fluid–as well as the regulatory authority of the COGCC, whose members he appoints.

In addition to weakening the commission’s industry presence, the bill would eliminate the requirement that the COGCC “foster” oil-and-gas production, replacing it with a requirement to “ensure” that such development protects public health, the environment and wildlife.

The bill also loosens the state’s mandate to avoid waste by developing fossil fuels efficiently, a move that Colorado Oil and Gas Association attorney Ken Wonstolen called “a profound policy change.” Previous legislative directives instruct the state to develop fully its natural resources for the benefit of residents.

“This would be inconsistent with that charge,” said Wonstolen. “Colorado would be the only oil-and-gas producing state that would say that regulatory waste is okay.”

Several Democrats who voted in favor of the bill said they planned to work with Foote on amendments to be introduced on the House floor, including state Rep. Dominick Moreno (D-Commerce City).

“I don’t think this bill is perfect and don’t think it accomplishes what it’s intended to do,” said Moreno. “I want to work on ways to reach that reasonable middle.”

State Rep. Ray Scott (R-Grand Junction) called the bill “extreme.” “To sit back and say we need to vilify a particular industry doesn’t make a lot of sense. I think what we have to do is continue to work on some kind of reasonable bill,” he said.

Scott added that the governor had rejected a previous attempt to shake up the commission.

“The governor was very much opposed to being told how to run his commission, and I do believe you’re going to meet the same fate if this bill makes it that far,” said Scott.

The bill’s foes, including industry representatives and pro-business groups such as the Denver Chamber of Commerce, argued that removing oil-and-gas employees from the panel would be akin to banning doctors from serving on the state medical board.

Supporters of the bill said that the industry members could be replaced with retired or former employees, but opponents said the engineering and technological issues are too complex and fluid to be handled by anyone but those actively involved.

Scott Campbell, an oil-and-gas attorney, called the experience brought by the commission’s three industry members “invaluable.”

“These are current cutting edge questions– legal questions, technological concerns, etc.– and you need the people who are on the ground living those issues on a day to day basis there to discuss those kinds of issues,” said Campbell. “You’ve got the right composition. Let’s not forget it’s only three industry members sitting there.”

The committee agreed Thursday to postpone a vote on House Bill 1278, which would reduce from five barrels to one the size of an oil spill that must be reported to state and local authorities.

The House Agriculture, Livestock and Natural Resources Committee approved 11-0 Wednesday a bill requiring property sellers to disclose that the mineral rights, including oil and gas, may be owned separately from the surface rights.

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