Denver — Democratic Colorado Governor Jared Polis declared an end to the "oil and gas wars" in the state Tuesday after he signed into law legislation giving local governments more control over future drilling sites.
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"Today, with the signing of this bill, it is our hope that the oil and gas wars that have enveloped our state are over," Polis said during the signing ceremony late Tuesday afternoon at the Capitol in Denver. "Let me be clear. This bill gives the industry and residents certainty and comfort and Colorado will be the better for it."
"This bill is good for the energy industry," he added. "This bill is good for workers. This bill is good for the environment. This bill is good for residents who live in oil and gas areas."
Senate Bill 181, also called "Protect Public Welfare Oil and Gas Operations" fundamentally changes the nature of how the state regulates the oil and gas industry. Historically, the Colorado Oil and Gas Conservation Commission has had ultimate authority over approving drilling plans. A landmark Colorado Supreme Court case ruling two years ago found county and municipal drilling and fracking bans were unlawful due to the COGCC's supremacy on the issue.
However, under the new law, local governments have more equal footing with state regulators when it comes to approving drilling permits. Cities and counties could make the overall process for new development difficult through a more stringent permitting process, higher fees, stricter emission regulations or by increasing setback measures, all of which have the potential to discourage new investment from the industry.
"Governor Polis' signature makes Senate Bill 181 law, which fundamentally alters the natural gas and oil industry's future in the State of Colorado," said Ben Marter, a spokesman for the Colorado Petroleum Council. "From the introduction of the measure early last month, our industry vigorously opposed the policy and the process. Senate Bill 181 remains a threat to one of the foundations of Colorado's economy."
But the oil and gas industry remains hopeful it can continue to work with the state in order to reduce uncertainty over the bill's ultimate effects. During the legislative process, a few amendments were made to the bill making it less onerous to the industry.
"SB 181 is the most comprehensive oil and natural gas legislation Colorado has seen in decades," said Dan Haley, CEO of the Colorado Oil and Gas Association. "While we appreciated and supported a few critical amendments that were added to address some of our concerns and that provide a degree of certainty for our member companies, we still oppose the legislation."
Despite Polis' declaration that Colorado's "oil and gas wars" are over, skirmishes continue along the Front Range.
A spokeswoman for Colorado Rising, the group behind last year's Proposition 112 which attempted to increase drilling setbacks to half a mile, said SB 181 does not go far enough.
"While it does not address all of the concerns and threats associated with industrial fracking activity, it is a desperately needed tipping back of enormously unbalanced scales in favor of people and environment," Anne Lee Foster said.
Industry advocates are pursuing a ballot initiative of their own. Dubbed the Oil and Gas Independent Regulation Act, it would repeal SB 181. The backers of the initiative are currently going through the approval process. If the proposal moves forward, supporters of the initiative must acquire the signatures of 124,632 registered voters by August 5 to get the initiative on the ballot.
"Colorado's energy future is too important to be wielded as a partisan weapon, and all Coloradans deserve to know the consequences of this bill, both intended and unintended," Marter said. "While Senate Bill 181 remains deeply flawed, Governor Polis and state officials have pledged to work with industry to create a reasonable regulatory framework that works for all Coloradans, and we hope that process begins quickly."
Still, the industry remains somewhat in the dark over how the new law will affect future oil and gas development.
"The ultimate impact of Senate Bill 181 will be determined by many complicated regulatory rulemakings at both the state and local levels, which could take years to complete," Haley said.
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