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The implementation of Senate Bill 181, which Gov. Jared Polis signed in April, threatens a recession in western Garfield County, according to County Commissioner Tom Jankovsky.
“We are really concerned about (SB) 181 and what it’s doing,” Jankovsky said during Monday’s board of county commissioners meeting.
“It’s going to create a recession in this area in Western Garfield County, and it (will be) created by the governor and the legislature,” he said. “There’s no reason to have a recession. It’s very concerning to us.”
The public, industry and local leaders have a chance to comment on the new rules governing oil and gas permits next week.
Next Wednesday, Aug. 21, the Colorado Oil and Gas Conservation Commission (COGCC) will hold a public comment session at the Hotel Colorado in Glenwood Springs to discuss a variety of proposed rules. The session starts at 9 a.m.
COGCC members will take a field tour the following day of oil and gas facilities in Garfield County.
A New Mission
The main thrust of SB181 is to shift the mission of COGCC from “fostering” the oil and gas production to “regulating” the industry, prioritizing impacts on community health and the environment.
The new law states the COGCC director may delay granting any permit under certain conditions. Those conditions, published July 16, include drill sites near schools, neighborhoods and — most importantly to western Garfield County — floodplains, critical water resource areas and sensitive wildlife areas.
Industry groups fear that SB181 would effectively turn into a moratorium on oil and gas permits.
The rulemaking process is ongoing, but what concerns the commissioners is the lack of new permits approved this year in the county.
Kirby Wynn, the Garfield County’s oil and gas liaison, told the commissioners Monday that only three drilling permits have been approved in Garfield County this year, and they came in last week.
Those three approvals are far from what oil and gas companies “would consider a sustainable flow of permits to sustain operations and capital flow investment,” Wynn said.
Across the state, COGCC has approved relatively few permits in 2019, since Polis appointed Jeff Robbins director of the COGCC in January.
“The spirit of 181 and the intent of the law was not to put a moratorium or a stop to (new permits),” COGCC spokesperson Megan Castle said.
COGCC is working with the industry on their highest-priority permit applications, and approvals are starting to come through, Castle said.
“We’re working to make sure that we are being a strong, good partner with industry, and at the same time doing that in a responsible manner,” she said.
Industry Concerns
One person concerned about the slow trickle of permits is Mike Rynearson, of Caerus Oil and Gas. He said it would be difficult for his company to operate in the future if the current processes continue.
“The uncertainty is an issue when you’re trying to do planning and put together that much capital,” Rynearson told the commissioners in an operations update Monday.
“Without that certainty in place, I can’t tell you what our plans would be, but it would be significantly less than it is this year,” Rynearson said.
Caerus reduced its operational plans by 34 percent this year, but without a stream of new drilling permits in the pipeline, it’s difficult to continue to support the operations, Rynearson said.
Caerus employs 128 people out of its Parachute location.
Garfield County and many industry voices are engaging in the rulemaking process. The goal, Jankovsky said, is to point out “that things are different on the Western Slope” compared to the Front Range.
On the other hand, SB 181 proponents say it gives local communities more power to oppose new oil and gas developments.
Eleanor Nelson, a vocal opponent of the Ursa Phase II proposal at Battlement Mesa near Parachute several years ago, wrote in a formal comment on the proposed rules that the industry needs more stipulations.
“This industrial activity has earned our area the offensive label of “the gas patch,’” Nelson wrote in formal comments on the proposed rules.
The first phase of the Ursa site already made Nelson wish she hadn’t built her retirement home in Battlement, she said.
“Cumulative impacts include noise, lighting, construction truck traffic, tankers hauling water at all hours of the day and night, fumes from equipment or vehicles that miraculously seem to dissipate when field inspectors investigate complaints,” Nelson said.