This section includes links to Colorado statutes, regulations, guidelines, and policies related to oil and gas surface operations.
Oil and gas development in Colorado is governed primarily by statutory provisions of the Oil and Gas Conservation Act (Colo. Rev. Stat. § 34-60-100, et seq.) and rules promulgated by the Colorado Oil and Gas Conservation Commission (COGCC) (2 CCR 404-1, et seq.). As the state agency charged with promoting the exploration, development, and conservation of Colorado’s oil and gas resources, the COGCC also handles the drilling permit process and ensures industry compliance with state-wide oil and gas statutes and regulations. Colorado’s Air Pollution and Prevention Control Act (§ 25-7-100, et seq.) and Water Quality Control Act (§ 25-8-100, et seq.) also play important roles in regulating the environmental impacts of oil and gas development throughout the state. Additionally, various guidelines and policy statements are issued by the COGCC and other state agencies, like the Air Quality Commission and the Colorado Wildlife Commission, to guide the future of oil and gas development in Colorado and to assist regulated industries in understanding and complying with Colorado’s statutes and regulations. See the following for more information and links to the above.
The Colorado Constitution contains almost nothing specific to environmental protection or oil and gas development. More generally, the preamble declares that the constitution is established, in part, to "promote the general welfare" of "ourselves and our posterity." In addition, the constitution contains only one environmental provision (Article 18, section 6) regarding protection of state forest lands.
Colorado Oil and Gas Statutes
The Oil and Gas Conservation Act (Colo. Rev. Stat. § 34-60-100, et seq.) governs oil and gas development in Colorado generally. The Act contains several wildlife, habitat, and environmental protection provisions, the scope of which greatly expanded in 2007 with the passage of House Bill 1298 and House Bill 1341. This legislation not only strengthened the environmental protection language of the Oil and Gas Conservation Act, but also required that the Colorado Oil and Gas Conservation Commission promulgate new environmental standards in conjunction with the Colorado Wildlife Commission and the Colorado Department of Public Health and Environment. HB 1298 also created the Habitat Stewardship Act of 2007 (§ 34-60-128), aimed specifically at minimizing the adverse impacts of oil and gas operations on wildlife resources.
Relevant provisions of the Oil and Gas Conservation Act include:
§34-60-102 – Legislative Intent – "It is declared to be in the public interest to foster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources (§34-60-102(1)(a)(I));…plan and manage oil and gas operations in a manner that balances development with wildlife conservation in recognition of the state’s obligation to protect wildlife resources and the hunting, fishing, and recreation traditions they support, which are an important part of Colorado’s economy and culture." (§34-60-102(1)(a)(IV))
"It is not the intent nor the purpose of this article to require or permit the proration or distribution of the production of the oil and gas among the fields and pools of Colorado on the basis of market demand. It is the intent and purpose of this article to permit each oil and gas pool in Colorado to produce up to its maximum efficient rate of production, subject to the prevention of waste, consistent with the protection of public health, safety, and welfare, including the protection of the environment and wildlife resources…" (§34-60-102(1)(b)
§34-60-106 – The COGCC has the authority to regulate "Oil and gas operations so as to prevent and mitigate significant adverse environmental impacts on any air, water, soil, or biological resource resulting from oil and gas operations to the extent necessary to protect public health, safety, and welfare, including protection of the environment and wildlife resources, taking into consideration cost-effectiveness and technical feasibility." (§34-60-106(2)(d)) This section also contains a bonding requirement to protect surface owners.
§ 34-60-127 – Reasonable Accommodation – The "Reasonable Accommodation" provision of the Oil and Gas Conservation Act requires that oil and gas operations be conducted in a manner that accommodates surface owners and minimizes intrusion upon and damage to surface lands. This can be achieved by selecting alternative locations for wells, roads, pipelines, and production facilities, or employing alternative means of operations, where such alternatives are technologically sound, economically practicable, and reasonably available to the operator.
§ 34-60-124 – Oil and Gas Conservation and Environmental Response Fund – The Oil and Gas Conservation Act created the Conservation and Environmental Response Fund to "investigate, prevent, monitor, or mitigate conditions that threaten to cause, or that actually cause, a significant environmental impact on any air, water, soil, or biological resource; to gather background or baseline data on any air, water, soil, or biological resource that the commission determines may be so impacted by the conduct of oil and gas operations; and to investigate alleged violations…that threaten to cause or actually cause a significant adverse environmental impact."
§ 34-60-128 – Colorado Habitat Stewardship Act of 2007– The Habitat Stewardship Act was enacted "to minimize adverse impacts to wildlife resources affected by oil and gas operations." The Act requires oil and gas operators to complete timely consultations with the wildlife commission, the division of wildlife, and affected surface owners prior to beginning operations, and it requires the implementation, "whenever reasonably practicable," of "best management practices and other reasonable measures to conserve wildlife resources."
Further, the Habitat Stewardship Act charges the COGCC to promulgate rules by July 1, 2008 to establish standards for minimizing adverse impacts to wildlife resources and to ensure proper reclamation of habitats during and following oil and gas operations. The Act requires the rules, at a minimum, to address:
Wildlife protection provisions can also be found in § 33-1-101 which declares:
Colorado Oil and Gas Regulations
The Colorado Oil and Gas Conservation Commission (COGCC) is responsible for promulgating state-wide rules to regulate oil and gas development in Colorado. The COGCC’s other duties include exploration, development, and conservation of Colorado’s oil and gas natural resources, prevention and mitigation of the adverse impacts of oil and gas development on public health, safety, welfare, and the environment, issuance of new drilling permits, and enforcement of applicable oil and gas statutes and regulations.
Current COGCC Rules can be found in the Colorado Code of Regulations, click on "Practice and Procedures" to access specific rules. The on-line rules include changes made during the 2008-2009 rulemaking and subsequent rulemakings to comply with amendments made in 2007 to the Oil and Gas Conservation Act with adoption of HB 1298 and HB 1341. Full text of the final draft rules, user-friendly explanations and clarifications, and information about public hearings as well as the rulemaking process can also be found on the COGCC’s website.
Rules of particular relevance include:
Large Scale Planning
Rule 216 – Comprehensive Drilling Plans – gives operators the option to prepare a comprehensive drilling plan. The plan identifies foreseeable oil and gas activities in an area and facilitates discussion of potential impacts and development of practices to minimize impacts to public health, safety, welfare, and the environment.
Rule 513 – Geographic Area Plan – provides for a plan to include the activities of multiple operators in entire oil and gas fields or geologic basins for over a period of ten years or more. It enables the COGCC to adopt basin specific rules.
Rule 208 – Corrective Action – requires the COGCC to order corrective action of any condition that is causing or likely to cause waste or pollution
Rule 317B – Public Water System Protection – establishes special requirements for new development in surface water supply areas, including adherence to limitations on activities in buffer zones
Rule 324(a) – Pollution – requires oil and gas operators to take precautions to prevent significant adverse environmental impacts to air, water, soil, or biological resources to the extent necessary to protect public health, safety and welfare
Rule 805(b)(3) – Green Completion – requires green completion practices for some oil and gas wells, and requires best management practices when green completion is not required or not technically feasible
900 series – Exploration and Production (E&P) Waste Management – these rules establish the permitting, construction, operating and closure requirements for pits, methods for E&P waste management, procedures for spill/release response and reporting, and sampling and analysis for remediation activities
Rule 205 – Access to Records – provides for record keeping and access to records.
Rule 205a – Hydraulic Fracturing Chemical Disclosure – requires certain hydraulic fracturing treatment disclosures after April 1, 2012. The rule addresses the timing of disclosure, content of disclosure, confidentiality, and disclosure to health professionals.
Rule 305.E.(1).A – Content of Notices –provides for notice to landowners.
Rule 316C – Notice of Intent to Conduct Hydraulic Fracturing Treatment – provides for 48 hours notice of hydraulic fracturing treatment to the COGCC and prompt notice to the local government designee.
Surface Owner Notice and Consultation
Rule 305(b) – Notices of Oil and Gas Operations – establishes requirements for surface owner notification prior to drilling
Rule 306 – Consultation – requires operators to use best efforts to consult in good faith with affected surface owners in locating roads, production facilities and well sites, and in preparation for reclamation and final abandonment. Revised rules also require consultation with local government, the Colorado Division of Wildlife, and the Colorado Department of Public Health and Environment.
Surface Owner Protection, Reclamation
1000 series – Reclamation Regulations – these rules establish the requirements for proper reclamation of land and soil affected by oil and gas operations and ensure the protection of topsoil by requiring that the surface of the land be restored as nearly as practicable to its condition at the commencement of operations
1200 Series – Protection of Wildlife Resources – these rules address identification of wildlife species and habitats, consultation, general operating requirements, and operations in sensitive habitats and in restricted surface occupancy areas.
Rule 703 – Surface Owner Protection – requires operators to provide financial assurance to the COGCC, prior to commencing any operations with heavy equipment, to protect surface owners who are not party to a lease, surface use, or other relevant agreement with the operator for unreasonable crop loss or land damage caused by such operations
700 series – Financial Assurance – 703, 704, 706, and 707 contain the specifics of Colorado’s bonding requirements.
The COGCC has adopted a special rule to regulate oil and gas development in the densely populated Wattenberg field. Wattenberg is one of the largest oil and natural gas fields in the United States. The field is located in the Denver-Julesburg Basin in northeast Colorado existing primarily in Weld County, but extends into Adams, Boulder, Broomfield and Larimer Counties. The field is approximately fifty miles long and fifty miles wide coving roughly 2900 square miles.
COGCC Rule 318A generally allowed for five wells per 160 acres, or thirty-two per section within the majority of the greater Wattenberg area. In 2006, the COGCC adopted 318Ae which allowed three additional wells to be drilled in part of the greater Wattenberg area to boundary or interior infill wells in each quarter section such that eight wells were permitted per 160 acres. The additional wells must be directionally drilled at the operators expense from the surface locations within the drilling windows and must be within fifty feet of existing wells.
Under Senate Bill 07-237, if directional drilling is required, surface developers must also contribute $87, 500 per well for up to four wells per quarter section to help cover the incremental cost of directional drilling. This has been adopted into the C.R.S. § 24-65.5-103.7. However, this deposit requirement similarly only applies to oil and gas development in the Wattenberg area.
Colorado Oil and Gas Policy and Guidance
The following is a collection of various guidelines and policy statements issued by the COGCC and other Colorado state agencies aimed at guiding the future of oil and gas development throughout Colorado in an environmentally conscious manner and at increasing understanding of and compliance with current oil and gas laws and regulations.
COGCC Policies – Proposed and adopted COGCC policy statements, ranging from wildlife issues to pit design and construction, can be found on the "Policy" page of the COGCC’s website.
COGCC Surface Owners Brochure – The Surface Owners Brochure is a user-friendly handbook that explains the COGCC rules governing surface owner notification, consultation, and reclamation and helps landowners understand how the rules can work for them. The Brochure can be found on COGCC’s website, click on "General," then click on "Surface Owners Brochure."
COGCC’s "Answers to Typical Questions from the Public" – These frequently asked questions contain information about what the COGCC is doing to protect air, water, and general environmental quality as well as surface owner interests from the harmful effects of oil and gas development. The FAQ’s can be found on COGCC’s website, click on "General," then click on "Answers to Typical Questions from the Public."
2007 Colorado Wildlife Commission Energy Resolution – The 2007 Resolution encourages responsible development of Colorado’s mineral resources through the use of best available technology to minimize environmental impacts and urges collaboration on energy development projects between industry, government, and agencies at the federal, state, and local levels.
2007 Colorado Wildlife Commission Policy on Energy Development in Colorado – The 2007 Policy advocates for ecologically responsible energy development in Colorado and calls for the identification of key habitats for important species and of critical seasonal uses of those habitats, the orderly planning of field development that takes such information into account, the promotion of a working list of best management practices to provide to industry, and the development of offsite and onsite mitigation strategies.
2007 Colorado Wildlife Commission Policy on Energy Development on State Wildlife Areas – The 2007 Policy identifies the impacts of energy development on state wildlife areas and proposes the implementation of a cost-benefit analysis to address the impacts on quality of habitat, wildlife populations, and recreational uses for which a state wildlife area was originally acquired.
Colorado Wildlife Commission Resolution Regarding Rules to Implement HB07 1298 (May 1, 2008) – The Resolution expresses the Wildlife Commission’s general support of the COGCC’s 2008 Draft Rules, but also identifies the Commission’s concerns that some provisions of the draft rules are presently insufficient to meet the requirements of HB 1298, particularly those rules relating to timing limitations on oil and gas operations and those dealing with reclamation standards.
2009 Memorandum of Understanding Among Bureau of Land Management, Colorado State office, U.S. Forest Service, Rocky Mountain Region, and Colorado Oil and Gas Conservation Commission – The 2009 Memorandum of Understanding provides for efficient and effective oil and gas permitting on BLM and NFS Lands in Colorado. The document also clarifies the Parties’ respective roles and responsibilities in permitting and administering oil and gas operations on federal lands and minerals administered by the BLM and USFS in Colorado.
Colorado Air Quality Statutes, Regulations, and Guidance
Colorado’s Air Pollution Prevention and Control Act (Colo. Rev. Stat. § 25-7-100, et seq.) contains general laws governing ambient air quality and air pollution in Colorado. The Act aims to achieve "the maximum practical degree of air purity in every portion of the state, to attain and maintain the national ambient air quality standards, and to prevent the significant deterioration of air quality in those portions of the state where the air quality is better than the national ambient air quality standards." (§ 25-7-102)
Rules and regulations consistent with the implementation of the Air Pollution Prevention and Control Act are promulgated by the Department of Public Health and Environment http://www.cdphe.state.co.us/) and the Air Quality ControlCommission.
The Air Quality Control Commission’s website also contains information about proposed regulations and the rulemaking process, compliance with and enforcement of air quality statutes and regulations, and the permitting process required for industries that emit air pollutants. Some specific guidance documents of interest include:
Colorado Water Quality Statutes, Regulations, and Guidance
Colorado’s Water Quality Control Act (Colo. Rev. Stat. § 25-8-100, et seq.) provides for the development and maintenance of water quality standards in Colorado and the prevention, abatement, and control of water pollution. The Act is administered by the Water Quality Control Commission, the state agency also responsible for promulgating rules and regulations to govern water quality.
Water Quality Control Commission’s Stormwater Program – The program establishes stormwater discharge permit requirements in addition to those implemented by the COGCC for the construction of oil and gas operations that disturb one acre or more.
Memorandum of Agreement between the Water Quality Control Division and the Oil and Gas Conservation Commission: Response to Spills/Releases to Surface Water – The 2000 MOA between the Colorado Water Quality Control Division and Colorado Oil and Gas Conservation Commission delegates and describes responsibilities of the WQCD and the COGCC in the event of a spill and describes reporting procedures for oil and gas operators to follow in the event of a spill.
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