American Oil and Gas Reporter - June 2017 - 33

injury in Firestone. The explosion was
caused, according to a preliminary report
by state investigators, by methane that
migrated to the house from an abandoned
flowline connected to an older vertical
well that predates the nearby homes.
The well's operator announced on April
26 that it would shut in all 3,000 of its
northern Colorado vertical wells in "an
abundance of caution." The wells, which
the company indicated produce about
13,000 barrels of oil equivalent a day,
were to remain shut in until they were inspected and tested, the company said.

Flowline Integrity
A review of the May 2 NTO indicates it
requires operators "to inspect their inventory
of existing flowlines and verify that any
existing flowline not in active use, regardless
of when it was installed or taken out of
service, is abandoned" according to procedures described in Rule 1103. Operators
also are required "to document the location
of all existing, active flowlines located
within 1,000 feet of a building and confirm
that these lines have integrity."
The notice reminds operators that
COGCC regulations "do not recognize
an 'idle' status for flowlines or pipelines.
All flowlines and pipelines are considered
active until they have been abandoned
under Rule 1103."
The notice included a May 30 deadline
by which operators were to have inspected
flowlines within 1,000 feet of a building
and documented the associated well by
API number and the tank battery by location ID number.
By the end of June, operators must either perform integrity tests on pipelines
and flowlines operating within 1,000 feet
of a building or officially abandon them.
"The compliance deadline for this NTO
is a heavy lift for operators," Haley commented.
He also called for flowline and pipeline
location concerns to be discussed in the
interim, before the 2018 session. "We
did have an opportunity to voice our concerns with the mapping bill, but, like the
pooling and setback bills, it is an issue
that should be discussed without the urgency that comes at the end of the session,"
he suggested.

Setback Again
Many in the oil and gas industry experienced some déjà vu at the introduction
of HB 1256, a bill that sought to increase
drilling setbacks to 1,000 feet from the
property lines of schools or high-occupancy buildings, Haley reported. "We
nearly tripled the setback distance four
years ago, he observed (AOGR, February
2013, pg. 147). "We have yet to see any

science that tells us these increased setbacks are protective of health."
Sponsored by Foote and Senator Matt
Jones, D-Louisville, HB 1256 would have
revised regulations to specify that well
setbacks be measured from the property
line and not the building.
"When you consider the entire school
property, especially in some rural areas,
you are looking at quite a distance," Haley
remarked. "This was another late-session
bill that did not leave enough time to
consider the effects. There are no studies
on the economic impact when that much
additional acreage is put off limits."
The setback bill passed the House 3728 on March 29, but died in a Senate
committee.
Pooling Notice
Foote and Jones teamed again to sponsor HB 1336. According the lawmakers,
it sought to revise the state's pooling
regulations to offer additional protections
for mineral owners. Among its provisions
was a requirement for operators to give
90-days' notice of a COGCC hearing to
pool a drilling unit. It also required such
notices offer a "clear, concise, neutral
explanation" of Colorado pooling rules,
and for operators to provide the commission with a summary of nonconsenting
owners and the percentage of acres pooled.
According to Jones, an early version
of HB 1336 would have raised the interest
owner threshold to 51 percent of a unit
from the current single-owner request.
After the threshold language was removed
from the bill it passed the House, he said.
"Our pooling laws have been on the

books since 1935," Haley noted. "This is
another issue that we can look at off-session and see if there are some changes
that can be made. We agree that the
notices can be difficult to read; some operators have proactively revised their
notice letters so you can read them without
hiring an attorney. That is something we
can consider."
The pooling bill passed the House 3629 on April 26 and was sent to the Senate,
where it died in committee.

Energy Assistance
COGA was not entirely on the defensive this session, Haley indicated. "We
championed HB 1116 to continue providing low-income families with energy
assistance funds from severance tax revenues," he pointed out.
The bill was co-sponsored by Representatives Millie Hamner, D-Dillon, Tony
Exum, D-Colorado Springs and Senator
Beth Martinez Humenik, R-Thornton. It
authorizes continued funding for low-income energy assistance through 2024.
On March 9, it passed the House 48-17
and was approved in the Senate 24-11
on the session's final day.
According to COGA, the only other
bill of significant interest for the industry
was a pipeline and facilities tampering
bill sponsored by Senate President Jerry
Sonnenberg, R-Sterling.
The bill, SB 35, was introduced early
in the session and would have raised the
penalty for tampering to a Class 6 felony
from a misdemeanor. It passed the Senate
19-16, but died in committee in the House.
r

Pausing for a moment during a COGA-sponsored event to discuss the 2017 Colorado
Legislature are, from left, consultant Debbie Brown, COGA President and Chief Executive
Officer Dan Haley and COGA Director of Communications and Public Affairs Scott
Prestidge. The end-of-session review was held at the Denver Athletic Club.

JUNE 2017 33
American Oil and Gas Reporter - June 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - June 2017
