State Commission Finalizes Sweeping New Oil And Gas Rules

DENVER (CBS4)- One year after the state legislature passed a controversial law, calling for an overhaul of oil and gas regulations, the new rules are now in place. The Colorado Oil and Gas Conservation Commission approved the sweeping changes that include new setbacks from homes, schools, wildlife habitats and waterways.

"Largely I have received positive support for where we have landed. There is a recognition and appreciation for the fact that the new rules are more robust and tougher and more comprehensive, but people seem to understand that this was to be expected, in changing the landscape from fostering to regulating in a protective manner," says Commission Chair Jeff Robbins.

Not everyone is happy about the new rules. Ben Holzschuh works for Rocky Mountain Wireline, a contractor for the industry. He's worried the regulations will cripple an industry already struggling. A total of 7,300 oil and gas workers have lost their jobs in the last few months alone as demand for oil has plummeted.

"We have a 3-year-old son, we have a daughter coming in March, and so we have had a lot discussion about what this looks like if I do lose my job and how I'm going to support my family," said Holzschuh.

Robbins insists the rules are balanced and reasonable, but there's no question acquiring a permit will be more difficult. Regulators will now assess cumulative impacts of things like noise, lighting and air quality.

Wells must be 500 feet from most streams and wildlife habitats and two-thousand feet from homes, schools and other occupied structures.

Companies can apply for waivers in some cases but they will be at the discretion of the commission, which apologized last week for accidentally sending an email referring to oil and gas companies as "snake oil" and "666" - the devil - among other things.

"In my opinion, it is not a fair and unbiased commission, it is a commission put together by the governor to get rid oil and gas operations in our state," says Holzschuh. "We need provide for our families, and not only do we need to put food on table, in our minds, we need to provide energy so that we can continue to live in a clean environment in a place where we do have reliable, affordable, safe energy."

The head of the Colorado Oil and Gas Association - the industry trade group - is more optimistic. Dan Haley says he's confident operators will be able to meet health and safety requirements needed to obtain permits but, because of the new setbacks, he admits almost every permit will now require a waiver.

"It's up to the state to decide if this industry we're going to continue to have in Colorado. I believe they have many reasons to want this industry to continue to thrive in this state. We're one of the top economic drivers in Colorado. We're a $30 billion economic driver in this state. We provide over a billion dollars in state and local taxes, $600 million to K-12 and higher education. Those dollars, if they go away, they're not going to be replaced quickly by anything in this state... it's not just this industry, it's about the health of our state, it's about the health of our economy."

The state says the energy and natural resources industry employs nearly 150,000 Coloradans with an annual payroll of more than $11 billion.

The new rules take effect Jan. 15, 2021.