American Oil and Gas Reporter - June 2015 - 28

State Legislative Reports

Task Force Helps COGA At Statehouse
By Dan Larson
Special Correspondent

DENVER-The six months of work by
an oil and gas task force paid dividends in
the Colorado Capitol for the oil and gas industry as a lack of controversial legislation meant industry could use the respite
to engage in wider business issues.
Although some political observers say
that no 120-day legislative session is
ever truly quiet, this was a year for the
state's oil and gas industry to show its support for Colorado's business community
on a variety of issues, according to the Colorado Oil & Gas Association.
"We were able to talk about the industry this session as part of the larger business
community and not something separate,"
affirms Doug Flanders, COGA director of
policy and external affairs. "Once we get
out of the minutia, we can discuss the positive impacts the oil and gas industry as a
business has on the state. When several industries can come together on a tax issue,
for example, oil and gas is seen as part of
the fabric of business in Colorado."
COGA joined with the state's business
interests in opposing or supporting a number of bills with impacts on business, notes
Flanders. "Many of these business groups
have rallied around oil and gas over the past
few years, so this was a good opportunity for us to stand with them in supporting
their issues and helping keep Colorado's
business climate strong," he remarks.
Colorado's divided legislature, in
which Republicans controlled the Senate
and Democrats controlled the House,
meant few bills survived the session. According to the Colorado Association of
Commerce and Industry (CACI), 682
bills were introduced this year: 392 in the
House and 290 in the Senate. A final tally of the legislative record shows only 51
bills passed both chambers during the session, which adjourned May 6.
"The 2015 session was laced with
partisanship and gridlock," suggests a session review from CACI. "This differed
from 2014, during which collaboration was
a priority and CACI was able to reach consensus on major pieces of legislation."
Pressing "Pause"
By contrast, the 2015 session was "quiet on oil and gas issues," says CACI.
"Stakeholders in the oil and gas industry,
Governor John Hickenlooper's administration, communities, and local governments
across Colorado acknowledged the task

28 THE AMERICAN OIL & GAS REPORTER

force recommendations as workable solutions."
The work of the task force "served to
press 'pause'-at least temporarily-on
several high-profile debates regarding
industry operations," observes the business
association.
Convened in August 2014, the governor's Task Force on State and Local
Regulation of Oil and Gas Operations
passed nine of nearly 60 recommendations
considered. The recommendations approved cover planning, cooperation and
communication among oil and gas operators, local communities and regulators,
as well as additional oversight and transparency (AOGR, April 2015, pg. 44).
The work of the task force had "a big
impact," agrees Flanders. "People could
see that there were no easy answers. The
recommendations show that once you
get past the emotion and consider the facts,
you can move toward a solution."
Only two of the nine task force recommendations required legislative action:
* Funding for additional health department and Colorado Oil & Gas Conservation Commission staff; and
* Legislative confirmation of rules for
methane emission controls adopted by the
Colorado Department of Public Health and
Environment in 2014.
Both passed the legislature, Flanders
confirms.
He agrees the task force and its recommendations served to tamp down some of
the intense debate around oil and gas development that has characterized the past
five legislative sessions.
"There are so many stakeholders when
it comes to oil and gas development," Flanders reflects. "The task force hearings allowed many of their issues to come to
light. The turning point came when Russ
George and other respected state leaders
on the task force clearly stated they would
not recommend taking oil and gas authority from the state."
Task force member Russ George is former head of the Colorado departments of
Natural Resources Division of Wildlife,
and Transportation. His position against
giving local government the authority to
veto state decisions in regard to oil and gas
development was affirmed during most
task force hearings, Flanders says.
The work of the task force also showed
how opponents of oil and gas used the local control issue to support their efforts to halt
development in Colorado, Flanders adds.
"You saw a critical divide between

members considered to be 'environmental appointments,'" he insists. "For those
opposed to oil and gas, it was never
about local control. It was about banning
hydraulic fracturing, which in turn bans oil
and gas. Most legislators recognized their
real motivation for what it was.
"There were others who advocated for
local control understanding that some
localities might want to increase oil and
gas development," he continues. "This divide exposed itself as nothing more than
the decades-old discussion about 'who is
in charge'-state or local-and that oil and
gas were only the latest conduit for the discussion. In five years, it will be a different industry, but the same argument."
Another positive result from the task
force, Flanders says, is that it shows how
those "willing to work within the system
to find workable solutions instead of
yelling from the sidelines, are the ones who
will get results with positive change."

Vertical Neighbors
As contention grows over new oil and
gas development in increasing proximity
to suburban growth, impacts on holders of
mineral rights often are overlooked, Flanders says.
Two bills introduced in the 2015 session helped bring those impacts to the fore,
he says. The first, HB 1119, would have
required compensation for mineral owners from any local government that enacted a ban on fracturing. The second, SB 93,
would have established a framework for
mineral owners to seek compensation
when local government action reduced the
value of their minerals by 60 percent or
more. According to state legislative
records, both bills died in committee.
"There were good discussions over
both bills," observes Flanders. "Even
though they did not pass, these debates
needed to happen."
For all the emotion the opposition
brings to issues such as local control, the
forgotten stakeholders are the mineral
holders, points out Flanders.
"They are not your surface neighbors;
they are your mile-down neighbors," he
characterizes. "You can call them your vertical neighbors, but you must not forget
they have property rights, too."
Discussions about property rights-from
mineral holders to surface setbacks-will
continue, predicts Flanders, as long as operators remain interested in extracting oil
and gas from the Denver-Julesburg Basin,
and a growing population demands addi-

American Oil and Gas Reporter - June 2015

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