On Tuesday, June 18, 2019, the first of a series of rulemakings to reform the Colorado Oil and Gas Conservation Commission to prioritize public health and safety in oil and gas permitting in Colorado concluded when the COGCC voted to postpone a final vote on this first SB 181-mandated rulemaking and to kick off an industry-requested stakeholder process to address lingering forced pooling issues.

This rulemaking revised a section of the COGCC rules called the “500 Series,” which governs much of the administrative process of COGCC hearings, and started off with robust participation from industry groups and impacted residents. Forty-three neighborhood, environmental groups, and individuals filed for party status and submitted dozens of prehearing statements and responses outlining their issues and concerns. Forty-five other industry groups and local governments also filed for party status.

The rulemaking began with a cloud of uncertainty as impacted citizens, industry, and government officials alike awaited the resolution of a series of motions submitted by all sides in an attempt to define the scope of the hearing. The COGCC ruled that while the scope of this rulemaking would remain narrowly defined to the appointment of Administrative Law Judges (ALJs) and revision of the forced pooling standards, parties would be allowed to present evidence on any issues involving the 500 Series Rules.

Leslie Robinson, chair of the Grand Valley Citizens Alliance in Garfield County, was concerned about the process but resolute despite the rocky start:

“We are veterans of COGCC rulemakings and we have never seen such an overt attempt from industry to minimize and dismiss resident voices — they tried to strike all of our concerns from the record. It is clear that we must remain vigilant and keep up the hard work to make sure our voices are heard and issues around legal standing for landowners and public notice are addressed.”

Andrew Forkes-Gudmundson, Associate Program Director at Citizens for a Healthy Community in Delta County, was more dismayed by the process:

“While we appreciate the position that the COGCC is in, their decision today raises concerns about the proper order of rulemakings and procedures needed to successfully implement SB 181. Appointing ALJs to consider oil and gas applications without first adopting the SB 181-mandated rules to protect public health, safety, and welfare, the environment, and wildlife resources seems backwards, and contrary to the spirit and intention of SB 181.”

Citizens for a Healthy Community specifically requested that the COGCC postpone the deployment of the administrative law judges until the other issues the parties raised during this hearing are resolved. Forkes-Gudmundson specifically called on the COGCC to “immediately start a stakeholder process to address notice and standing issues that remain with the 500 Series Rules.”  

Rodger Steen, chair of Western Colorado Alliance’s (based in Grand Junction and working across Western Colorado) Oil and Gas Committee concluded:

“The contentious process of this small rulemaking has made it clear that much is at stake and that for the full intention of SB 181 to be realized, impacted residents must be ready to participate throughout. We ask that the COGCC quickly move to address the issues impacted residents identified in another rulemaking so that future decisions can be made in a framework that gives impacted people more voice in these decisions.”

The 500 Series Rulemaking is the first of an anticipated 10-12 rulemakings that the COGCC will be conducting over the next 18 months to implement SB 181, the Protect Public Welfare Oil And Gas Operations Act signed into law in April. The new law seeks to comprehensively reform the way the State of Colorado regulates oil and gas development and to enact the COGCC’s new mission statement, to regulate the development and production of the natural resources of oil and gas in the state of Colorado in a manner that protects public health, safety, welfare, the environment and wildlife resources.

The first of the rulemakings addressing the mandates of SB 181 addressed specific provisions within the bill around Administrative Law Judges and forced pooling issues. The notice for the hearing specifically included (1) making changes to rules so ALJs and Hearing Officers may conduct hearings and issue recommended orders, and (2) revising the evidentiary requirements for pooling and drilling and spacing unit applications.

In prehearing statements leading up the actual hearing, 27 neighborhood and conservation organizations filed for party status (a record number) and submitted many pre-hearing statements asking for the scope of the rulemaking to be widened to include other issues governed by the 500 series (see attached statements for more details).

In the pre-hearing process, industry groups filed a motion to dismiss all statements that were outside the scope of the noticed rulemaking. Western Colorado Alliance and our partners filed a similar motion to strike industry’s comments that were beyond the scope. On Monday, the COGCC denied appeals to expand the scope of the rulemaking. They did allow parties to give testimony outside of the scope throughout Monday and kept the comments on the record, but did not make any decisions on topics beyond ALJs and pooling issues.

After 10 hours, the rulemaking was held over until July 31 for final decisions.  However, they did approve a request from the industry to start a stakeholder process on forced pooling. It will be moderated by the COGCC staff to include three issues brought forward by the Minerals Owners, CAMRO, and Industry:

·         Involuntary pooling of leased minerals

·         Definitions of oil and gas wells

·         Sequence of oil and gas development (leasing, pooling, spacing)

The issues are not limited to the three above but would be limited to issues within the Rule 530.

Community and environmental organization’s request for a similar process around issues of standing, public notice and other issues governed by the 500 series was addressed by the COGCC by the end of the meeting.

It is not known when the next rulemaking will be noticed or conducted, however, it is expected that more hearings will take place before the end of the year.