American Oil and Gas Reporter - October 2015 - 134

Front Range.
The commission's rule making will
seek to define a large scale facility and
provide regulators with tools to locate or
mitigate operations' intensity and scale,
Lepore indicates. Among the metrics the
commission says it may consider are:
* The duration of drilling and completion operations;
* The volume of on-site oil storage;
* Expected duration of simultaneous
operations; and
* Whether the site will be classified
as a "major" or "synthetic minor" emissions source under Colorado Public Health
and Environment Regulation No. 7.
"Recommendation 17 directs the commission to implement rules that create a
consultation process between the operator
and the local government," Lepore told
an audience at COGA's Rocky Mountain
Energy Summit in August. "The operator
has to show that he has anticipated community concerns."
"There are some things for the commission to work through in defining a
large oil and gas facility in an urban mitigation area, but we have a fairly well
defined scope," he added.
If the operator and local government
are unable to agree on a location after a
45-day arbitration process, the task force
recommends the operator apply for an
expedited permit hearing before the commission, during which arguments from
the local government, the operator, and
COGCC staff will be heard. "Ultimately,
the final decision remains with the commission," Lepore says.
Rule making for task force Recom-

mendation 20 presents a greater challenge,
he suggests. "Our goal is to provide the
framework for the operator and local
government to coordinate their plans,"
Lepore explains. "Once that is in place,
the commission will step out of the way."
Rule making for Recommendation 20,
which requires operators to register with
local governments in areas where they
plan to operate, will consider a number of
issues, a commission staff report indicates.
Among the issues are the nature of a
local government's request for an operator's
long-term plan, what defines a "material
alteration" to a five-year drilling plan, what
triggers mediation when local government
identifies a potential conflict between its
plans and those of the operator, the consequences of a local government failing to
provide an operator with a map of potential
locations, and similarly, if either side fails
to provide timely plan updates.
According to the COGCC staff report,
summer 2015 saw commission staff attend
outreach meetings on the regulatory recommendations with a variety of stakeholder groups in Colorado communities
including Denver, Broomfield, Brighton,
Rifle, Greeley, Durango and Fort Collins.
Rule making hearings are planned for
the fall or early winter.
Riding The Range
In his first three months as president
of the Colorado Oil & Gas Association,
Dan Haley says he has toured the state,
met with political, commercial and community leaders, and discussed industry
issues with local and statewide news media. "It has been a busy time," Haley de-

Former and current Colorado Oil & Gas Association chairmen pause for a moment during
the Chairman's Reception at the Rocky Mountain Energy Summit, sponsored Aug. 25-27
by COGA at Denver's Colorado Convention Center. Front row from left are Howard
Boigon, Mark Sexton, Fred Julander, Jay Still and Roger Hutson; Second row from left are
Richard Lewis, William Lancaster, Burt Jones, Alan Harrison, Joe Jaggers, David Posner,
Bruce White, Ed Holloway, Scott Moore, Ted Brown and Peter Dea.

134 THE AMERICAN OIL & GAS REPORTER

scribes. "But that was my 90-day plan
when I started June 1, and I believe we
accomplished quite a bit."
Haley observes that his tour around
the state highlighted the different concerns
of producers and the communities in which
they operate from one part of the state to
the other. Issues are different in the natural
gas-intensive, rural Piceance Basin compared with the predominately oil producing
Front Range, with its expanding and encroaching suburban neighborhoods.
"In the west, the discussion centers
on finding new markets for gas and how
to restart development," Haley recalls.
"Along the Front Range, it is all about
the urban interface. There are concerns
about how we can work together, whether
regulations should be strengthened or replaced, and if memorandums of understanding work for both sides. Many of
these questions were first raised in the
Piceance a decade ago."
Haley mentions that he is looking forward to his first trip to Washington as
COGA president, where he plans to encourage Colorado's elected officials to
repeal the ban on crude oil exports and
open new markets for the state's producers.
As for his biggest concern, he ponders
how slumping commodity prices are affecting members. "What is the new normal?" Haley poses. "We heard a number
of opinions from some very smart people
at this year's Rocky Mountain Energy
Summit, but it looks like we will stay in
this part of the cycle for the next year, at
least. The good news, however, is that
through technology and efficiencies, the
industry has been able to continue producing and provide a buffer to weather
this storm reasonably well. If you compare
the downturn in the 1980s to today's, we
are not experiencing the same volatility."

A Time For Optimism
Everyone in the industry is facing the
realities of a cyclical oil and gas market,
acknowledges Sarah Landry, vice president
of operations at COGA. But challenges
always come with opportunities, she adds.
"This is a tough time for the industry,
no doubt," Landry acknowledges. "There
is also reason to feel optimistic. If you
understand the challenges, you will know
where to plug in. We heard speaker after
speaker at the Rocky Mountain Energy
Summit say the opportunities are there.
Now is the time to innovate, now is the
time to make your career, and now is
when to invest."
The rapid shift this year has surprised
people inside and outside the industry,
alike Landry relates. "Last year, all we
talked about was growth management,
new plays and expanding infrastructure,"

American Oil and Gas Reporter - October 2015

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