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Colorado's controversial oil and gas overhaul bill moves on to House

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Passes Senate 19-15 on party lines

Bill amended to not favor strictest regulations

Denver — Colorado's proposed controversial oil and gas overhaul bill, which could put a long delay on the issuance of new drilling permits, skated through the Senate floor on party lines, and now moves on to the House where odds of its defeat grow even slimmer.

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The bill passed through the Senate this week by a vote of 19-15 on strict party lines. One Republican, Senator Ray Scott, minority whip, excused himself from the vote.

The bill aims to alter the power of the Colorado Oil and Gas Conservation Commission, the state agency charged with overseeing the industry, by giving local government more authority over oil and gas drilling sites. It also seeks to shift the primary purpose of the COGCC from fostering energy development to environmental protection.

Click here for full-size graphic

Officials representing Weld County, the core of the Denver-Julesburg Basin, did manage one small victory during the 11-plus hours of debate on the bill. One section of the original bill read that whenever an issue occurs over new drilling sites, the ultimate authority goes to whichever body, be it local or state, has the strictest environmental regulations in place.

Leaders in Weld County, where approximately 90% of all new wells in the state targeting oil and gas are planned, were worried the state could take away their authority to approve new well pads since the state might have stricter rules than some local governments. Senate leadership amended and removed this language from the bill. However, it still read that local governments could have stricter rules than the state.

It also added an amendment that in order for local governments to prevent new drilling projects, they must prove their actions are "necessary and reasonable."

"We opposed this bill as introduced and, after 11 hours of floor debate and amendments, nothing has convinced us to support it," said Dan Haley, CEO of the Colorado Oil and Gas Association.

The industry and Republicans are also worried about the nearly 6,400 drilling permits waiting approval. The bill allows the COGCC to halt the approval of any new permits until the agency has had a chance to codify the new rules that reflect the bill, which could take a year or more.

"Any smart investor is not going to move forward unless they have certainty," said state Republican Senator Jerry Sonnenberg. "If it takes the 19 months that it took last time, it would be devastating. If it takes half that long, it would be devastating."

It will be an even more difficult task for Republicans to defeat the bill in the House as Democrats hold a 41-24 advantage. If it reaches Democratic Governor Jared Polis' desk, he will most likely sign it into law as he has already made public his support for the measure.

-- Brandon Evans, bevans@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com