American Oil and Gas Reporter - June 2019 - 35

State Legislative Reports

Political Wave Hits Colorado Industry
By Dan Larson
Special Correspondent
DENVER-The consequences of a blue
tidal wave that carried Colorado Democrats
to power washed sweeping changes over
the state's oil and natural gas regulations.
However, observe leaders of the Colorado
Oil & Gas Association following the May
3 adjournment of the 72nd Colorado
General Assembly, those revisions' onthe-ground impacts must be wrung out
over a two-year rule-making process with
the implementation of SB 181 (AOGR,
May 2019, pg. 14).
"We succeeded in getting a few critical
amendments added, but we still oppose
the bill," COGA President and Chief Executive Officer Dan Haley says.
The passage of SB 181 has launched
a lengthy rule-making process in which
COGA says it will remain actively engaged. The new law's forthcoming changes
include broader jurisdiction for local governments that want to expand their oil
and gas oversight, but some industry representatives say, SB 181's language to
overhaul the Colorado Oil & Gas Conservation Commission's mission and structure may prove the most significant.
Growing Denver-Julesburg Basin oil
and gas development has helped propel
Colorado to fifth among oil producing
states, U.S. Energy Information Administration data shows. That growth, numerous media accounts assess, has generated a three-way tug-of-war between
the industry, environmental activists and
communities expanding into areas with
existing or prospective oil and gas production and infrastructure. One press account describes the three interests as "all
fighting for the same space."
The regulatory revisions SB 181 outlines are to be worked out in a series of
COGCC hearings, the first of which was
a May 15 stakeholder session. This was
to be followed by a two-day rule-making
session set for June 17-18, according to
a commission notice.
Friday Surprise
Following a January decision by the
Colorado Supreme Court in Martinez et.
al. v. COGCC, which overturned an earlier
appeals court decision, press accounts
note, anti-development activists began
clamoring for a revision to the commission
charter, which sought to balance resource
development, correlative rights and environmental protection. Instead, activists

argued, COGCC decisions should focus
above all on protecting human health and
the environment. In Martinez v. COCGC,
a group of young people sued the commission to review their petition that sought
to reject the COGCC's balanced approach.
A March 2017 appeals court sided with
the plaintiffs (AOGR, May 2017, pg. 90),
but the Colorado Supreme Court overturned that ruling in January.
Although results from the 2018 elections
had Colorado's oil and gas industry celebrating voters' decisive, 10-point defeat
of Proposition 112, which sought to impose
2,500-foot setbacks from drilling sites to
buildings and so-called vulnerable areas,
those same elections also handed Colorado
Democrats majorities in both legislative
chambers, the governor's office and nearly
every statewide elected office.
"We saw people elected simply because
they did not have an 'R' behind their
names," Haley observes. "This was a nationalized election with people voting
against Donald Trump by voting for Democrats down the ballot. However, before
long, they found out that by voting against
Trump, they got a single-party political
agenda they did not like either."
COGA met several times with leading
Democrats to gauge their plans, and the
group pledged to work with them during
the session, Haley describes. The meetings
instilled him with foreboding about the
new majority's plans for sweeping changes,
he says, but provided relatively few details.

"We had preliminary discussions, but
they did not include us in a true stakeholder
process," Haley relates. "We recognized
they won the election, so they could do
what they wanted. We offered to help them
see the practical implications of what they
were planning. Unfortunately, that never
took place before the bill was introduced."
Late in the afternoon on Friday, March
1, SB 181 was introduced with the majority
leaders of both chambers as sponsors.
"As a former journalist, I knew that when
a bill dropped at 4:30 on a Friday, no one
was expected to see it," Haley says. "A
committee hearing was held one business
day later and we knew they wanted to
push it through quickly."
Drawing on the industry unity and
grass-roots support generated by opposition
to Prop. 112, COGA and the Colorado
Petroleum Council called for a rally at the
Capitol to protest the apparent fast-track
for SB 181. According to published reports,
the rally drew approximately 1,000 workers,
who demonstrated support for the industry
and protested the bill. An estimated 500
workers packed the gallery in the House
and Senate chambers, Haley adds.
A detectable shift in the Capitol's political climate followed shortly thereafter,
he describes. "The speed at which this
bill and a few others were moving, combined with the rally on the steps, had an
effect," Haley assesses.
Within two weeks, some Democratic
leaders signaled a willingness to discuss

Pausing at the post-session review COGA hosted May 7 at the Denver Athletic Club are,
from left, House Majority Leader Alec Garnett D-Denver, Senator Rachel Zenzinger, DArvada, Senator Dennis Hisey, R-Fountain, and Representative Hugh McKean, R-Loveland.

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