Matt Lepore, Executive Director of the Colorado Oil and Gas Conservation Commission (COGCC), responded to questions that were raised by members at the previous Task Force meeting. Mr. Lepore identified five topics that had questions to answer, including: staffing, operator agreements between local governments and operators, ability of a local government to become involved in the permitting process, urban mitigation area best practices, and the “snake pit” question from Mr. George on how to best fix the problem from COGCC’s perspective.
Staffing
Mr. Lepore began with addressing questions around appropriate levels of staffing for inspectors. The COGCC recommended adding somewhere between 16 to 22 Full Time Employees (FTEs) which included not just inspectors but additional staff support for engineers, hearings group, environmental group, permitting, information technology, and two additional FTEs to handle complaint intake and tracking. The recommendation for the number of additional FTEs would be dependent on revenue forecasts for COGCC and the General Assembly must give the final approval for an increase in staffing. The funding for additional staff would not come through General Fund dollars; instead the Commission is mostly funded through a mill levy on mineral extractions which is anticipated to fall with the recent decline in oil prices. COGCC does have rulemaking authority to increase the mill levy to the statutory cap which the
Commission is currently well below. It is estimated by COGCC an additional 16 FTE would cost approximately $1.6 million.
Mr. Lepore also addressed the ratio of inspectors per well by looking at staffing levels in other states. The average in other states was approximately 1,621 wells per inspector; however the range of inspectors to wells varies greatly from state to state. Colorado is currently somewhere around 1,900 wells per inspector, with each inspector conducting roughly 1,000 well inspections per year. An increase of inspectors in Colorado would not drop the time frame of well inspections but it is expected to help. Mr. Lepore also noted the Commission inspects wells using a risk based analysis which may be a more suitable metric for inspections opposed to a ratio of inspectors to wells. There are some high risk wells that may require more than one inspection per year while it would be adequate to inspect other low risk wells once every few years.
Surface Use Agreements
Following the discussion on staffing, Mr. Lepore briefly spoke to questions related to Surface Use Agreements and a local government’s ability to become involved in the permitting process. On Surface Use Agreements, Mr. Lepore stated that some kind of ombudsman at the state who would be a source of information on oil and gas questions could be helpful, but suggested this position should be separate from COGCC. Mr. Lepore felt this would be a position that could help answer many questions, especially about Surface Use Agreements.
Local Government Involvement
Mr. Lepore provided examples of the ways in which a local government may be involved in the permitting process. Fundamentally a local government can become involved through the Local Government Designee (LGD) process. Other participation from local governments include the right to comment on a permit; ability to extend the public comment period from 20 to 30 days; ability to require consultation with the Colorado Department of Public Health and Environment (CDPHE) on health, safety, and environmental risks; and an ability to compel a hearing on a permitting decision after the permit is issued to raise questions specifically around public health and safety. Mr. Lepore emphasized that as long as he has been with the Commission, COGCC has always done their best to work with local governments, keeping in mind they are bound by statutory authority.
Scale, Proximity and Intensity
The presentation then focused on Mr. Lepore’s view of the issue and suggested areas for the Task Force to explore. Mr. Lepore stated that, in his opinion, the crux of the issue is based on the scale, proximity and intensity of drilling operations. He believes that some form of comprehensive planning, as explored by the Task Force, could be a beneficial process; however, the devil would be in the details and the question for the Task Force would be what the triggers for a development plan are. Comprehensive planning is not necessary in every area of the state, and Mr. Lepore recommended looking at the scale of an operation and proximity to people as potential triggers to consider for initiating a planning
process. He also noted there could be better plans to keep facilities away from homes, possibly through better use of pipelines which would require planning and Rights of Ways working alongside local
governments and land owners. Mr. Lepore also felt there may be a need to allot more time in the permitting process, especially in areas with larger populations.
Suggested Areas for Exploration
Finally, Mr. Lepore suggested areas for the Task Force to look at including: pooling mineral interests, traffic mitigation, air emissions and odors, flaring of gas, noise, and a single source of information on all things oil and gas. With regards to pooling, Mr. Lepore suggested a tool that might be used is pooling mineral interest owners in a single unit. Pooling has the potential to help with development plans and it creates an area of common interest without worry about subsurface trespass issues. Mr. Lepore
cautioned pooling is a tool that would have to be used very carefully and may require some minor statutory changes.
The COGCC is currently looking at strengthening their rules on flaring of gas and believe there are some instances where it does not make sense to flare. There may also be opportunity for better coordination with midstream companies who capture these gases.
Noise has also been a problem for COGCC and they are looking at best practices to mitigate sound nuisances including oil rigs powered through electrical power lines to minimize noise. Mr. Lepore also felt a source of information on all things oil and gas would be helpful, but he suggested this position
should be housed outside of COGCC. He went on to mention that NGOs and the LGD process have worked well in certain areas of the state providing valuable information to citizens; however these programs are not well established in every county and are non-existent in some areas. He also noted it would be difficult to mandate a LGD in every county unless there was funding to back the mandate.
Task Force Discussion with Mr. Lepore
Following his presentation, the Task Force members engaged in discussion with Mr. Lepore. The comments and discussion included:
COGCC submitted a decision item to the General Assembly’s Join Budget Committee requesting funding for two FTE – an enforcement officer and permitting technician.
The concept for an ombudsman could have a lasting impact, it should be required this position is neutral and maintains confidentiality regardless of where their funding comes from. The
position could perhaps be housed in the Dept. of Local Affairs or Dept. of Regulatory Agencies, or with an organization like Colorado Counties Inc. or the Colorado Municipal League.
Master planning can take a long time to complete; this should be recognized in a proposal.
COGCC receives about 25 percent of their funding from other sources including federal grant dollars and severance tax.
Urban mitigation areas are not mapped at the Commission; they do not exist until someone proposes a well and the radius for the urban mitigation area is determined by the proposed location.
There are restraints on what the COGCC and a local government can do within the permitting process. If an operator meets all the statutory requirements but the location of their well is not ideal, there is not much the COGCC or a local government can do. Mineral rights and the right to access are a constraint that likely will not go away.
With regards to setbacks, there is not much clarity on what “as far away as possible” means. Proximity and scale of an operation might be a better trigger for this issue.
There probably is not a need to have both Comprehensive Drilling Plans (which is already in the rules) as well as a Comprehensive Development Plan. A comprehensive plan should be
mandatory if there are specific triggers met. Those triggers are something the Task Force should examine and the recommended process needs to be transparent to avoid frustration.