American Oil and Gas Reporter - November 2015 - 31

N.C. Blocks Local Drilling Regulations
RALEIGH, N.C.-The North Carolina
General Assembly closed its 2015 session
in early October, but not before approving
legislation to bar local governments from
seeking to regulate oil and gas activities,
including prohibitions on hydraulic fracturing. Governor Pat McCrory signed the
bill Oct. 1, the same day legislators approved it.
One of the provisions included in SB
119, which the state legislative website
calls a technical corrections bill, revises
state statutes governing local ordinances
on oil and gas exploration, development
and production activities.
The bill states that all provisions of local ordinances-including those regulating
land use-adopted by counties, municipalities or other local authorities that seek to
regulate oil and gas exploration, development or production within their borders are
invalid and unenforceable.
The provision allows operators to petition the North Carolina Oil & Gas Commission to review local zoning or land-use
ordinances on setbacks, buffers and
stormwater requirements. The commission

is required to hold a public hearing in the
affected locality within 60 days, the bill
states, and is authorized to pre-empt any
local zoning or land-use ordinance that
seeks to regulate exploration, development
or production. The state code previously
applied only if local officials sought to prohibit those activities.
The law authorizes the commission to
pre-empt local governments if:
* Their ordinances regulate oil and gas
exploration, development or production activities, or regulate horizontal drilling or
fracturing activities used for that purpose.
* Operators have secured all legally
required federal and state permits and approvals, or that all such requirements
have been satisfied and approvals have
been blocked by local ordinances.
* Local citizens and elected officials
have had opportunities provided by state
law to engage in the permitting process.
* The exploration, development or
production activities do not pose an unreasonable risk to human health or the environment, and operators take reasonable
measures to minimize foreseeable risks.

Additional Regulations
According to media sources, the provision blocks attempts by the city of Sanford, N.C., and Lee County, which had
sought to impose additional regulations on
hydraulic fracturing and horizontal drilling.
Since mid-August, the North Carolina
counties of Chatham and Stokes had approved fracturing moratoria.
In 2014, the North Carolina Legislature
passed the Energy Modernization Act,
which banned local ordinances prohibiting
fracturing. News reports point out some
North Carolina counties have imposed
moratoria on approvals for oil and gas development, arguing the bans were not aimed
at prohibiting fracturing, but instead were imposed to give county officials time to develop permits specific to the activity.
The Energy Modernization Act allowed local zoning or land-use ordinances to the extent they applied to all development, enabling cities or counties to
use those ordinances if they applied to
every industry throughout a given zoning
classification, media sources say. SB 119
closes that loophole.
❒

COGA Critical Of Local Input Proposals
DENVER-Describing the proposal rules
as stricter than the recommendation from
which it originated, the Colorado Oil & Gas
Association is objecting to draft regulations
from the Colorado Oil & Gas Conservation
Commission. Unveiled in early October, the
COGCC indicates the regulations are the
product of two recommendations from the
21-member oil and gas task force that Governor John Hickenlooper convened in
2014 to address concerns about oil and gas
activity in local jurisdictions.
The draft rules go too far, holds COGA
President and Chief Executive Officer Dan
Haley. "While we are still reviewing the
proposals in detail, it's clear the draft rules
far exceed the actual recommendations put
forward by the governor's task force," he
describes COGA's dissatisfaction.
COGA particularly expresses doubts
about the rule based on the task force's
Recommendation 17, which encourages
local authorities, the COGCC, and oil and
gas companies to collaborate with regard
to project locations. COGCC proposes to
require operators to provide all local governments within 1,000 feet of an intended location a copy of their notice of intent
to construct a large urban mitigation area
facility.

According to COGA Director of Policy and External Affairs Doug Flanders,
that language strays beyond Recommendation 17. "You have to notify adjacent local governments, even though they have
no say," Flanders objects.
COGA also questions the proposed regulation's effort to require operators to detail "site-specific mitigation measures,"
again on the grounds that such stipulations
do not appear in the recommendation.
With regard to the rule based on Recommendation 20, which seeks to incorporate future oil and gas facilities into local
comprehensive planning processes, COGA
objects that the COGCC proposal not only
says operators must provide five-year estimates of the number of wells they plan
to drill in a jurisdiction, but also within its
"growth management area."
Flanders offers a hypothetical situation
of a company working in Boulder, Co.
"This would require giving a five-year plan
for an area that doesn't belong to Boulder,
only because Boulder may annex it in the
future," he reasons. "We think that is unnecessary and was not in the recommendation."
Ultimately, COGA calls on the commission to craft regulations that fall with-

in the recommendations' parameters. "We
are disappointed this draft seems to dismiss
the hard work of the governor's task
force, which spent nine months deliberating," Haley states. "The task force worked
hard to find compromise on some very
contentious issues and most of the recommendations were approved with unanimous votes."
According to an analysis PIRA Energy Group has conducted for the Independent Petroleum Association of America, the
proposals seek to require all pending and
future permit applications in large urban
mitigation facilities," which are defined as
wells having a certain total depth and onsite hydrocarbon storage capacity of at least
4,000 barrels, to notify local authorities and
offer to consult with them at least 90 days
before applying for state approval and before signing any surface-use agreement
with a landowner. Moreover, PIRA describes, oil and gas companies must register with towns in which they intend to
drill and provide a five-year estimate of
their proposed drilling plans.
The regulations may be found on the
COGCC website at http://cogcc.state.co.us/reg.html#/rules/gtrulemaking. ❒
NOVEMBER 2015 31

American Oil and Gas Reporter - November 2015

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