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Bill overhauling oil and gas regulation gets first hearing Tuesday after competing rallies

SB 181 would give more control to local government
Posted at 8:01 AM, Mar 05, 2019

The first committee hearing for a bill that would overhaul oil and gas regulation in Colorado was underway Tuesday afternoon in the Senate Transportation and Energy Committee after competing rallies for and against the measure.

Senate Bill 181 would give local governments more authority over oil and gas development and would make human health and environmental protection the state's highest priority, not energy production.

The bill would give local governments the authority to fine operators for leaks, spills and emissions and to impose fees for monitoring costs and inspections. It also allows those same governments to regulate noise from oil and gas operations and makes changes to the agency that regulates oil and gas in Colorado, the Colorado Oil and Gas Conservation Commission.

It also makes changes to that amount of fees companies can be charged for permit applications, among several other things, including forced pooling.

The bill, introduced on Friday was quickly met by criticism from groups including the Colorado Oil and Gas Association and the Colorado Petroleum Council.

The Colorado Oil and Gas Association called it "extreme" and accused Democrats of shutting the industry out of the process. Senate Republicans also said Democrats "are charging ahead with legislation crafted behind closed doors, supported by misleading propaganda, and at the expense of over 100,000 workers."

On Monday, the Colorado Republican Committee released a statement calling SB 181 "crushing legislation that will devastate Colorado's energy industry." They called for Democrats to postpone Tuesday's hearing.

The statement read in part: "It is unprecedented for a piece of legislation this large to be heard in committee just a few days after it has been introduced."

Both COGA and CPC held a rally outside the state Capitol Tuesday morning, which was attended by dozens of energy industry advocates, urging lawmakers not to support the bill. CPC Executive Director Tracee Bentley continued to say that she felt the industry was left out of the stakeholder process.

"Our biggest concerns with the bill are, No. 1, the process or lack thereof about how we got here today," she said. "This bill is so significant and will have such an impact on Colorado economy that we don't think enough stakeholders were at the table when it comes to crafting it. Certainly, the oil and gas industry is one of them. There's many others: agriculture interests, land owners, home builders, developers, local governments."

She said she was concerned about "unintended consequences" of the bill and said she believes that it sets up a "possible moratorium situation or a scenario where we can't develop."

She called for a slowing-down of the bill process to "make it a better bill for all of Colorado."

"I think there is a very real possibility where we could have a piece of legislation that moves forward with more regulations on our industry but also doesn't hinder our economy and stop development," Bentley said.

Sen. Jerry Sonnenberg, R-Sterling, said the bill was crafted in "a backroom deal" and said he didn't believe that local control was the goal of the bill.

"They say it's for local control, but only if local government wants to regulate it more than the state does," he said. "It's going to be more difficult. They've already started pulling back permits that they've already introduced or approved, and essentially what I think will happen is you'll destroy an oil and gas economy in rural Colorado that, quite frankly, helps the state, helps our education, schools, property taxes."

Bill sponsor Senate Majority Leader Steve Fenberg, D-Boulder, pushed back against those characterizations on Friday when the bill was introduced.

“News flash @Tracee_Bentley,@APIenergy,@COPetroCouncil, special interests don't write bills, legislators do. I understand it might be difficult for the industry to no longer be able to write their own laws. But that’s not how things work in Colorado anymore,” he tweeted.

He continued to fight against the industry’s characterization of the bill Tuesday as well.

“Make no mistake, SB181 is about local control and prioritizing health and safety,” he tweeted after dozens of supporters packed the Capitol ahead of the 2 p.m. committee hearing.

Around 400 people signed up for testimony on SB181 Tuesday, and each person gets two minutes to speak, meaning that the committee hearing is expected to last well into the evening. Among the first to speak was Erin Martinez, a victim of the 2017 Firestone home explosion who stood and spoke alongside Democrats when they unveiled the measure last week.