Colorado court decision may imperil jobs, incomes, energy development

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“When it comes to responsible energy development, Colorado has a record to be proud of, a proven tradition of responsible and safe energy development”

Pressure is growing in Colorado to appeal a recent court decision that sided with activists seeking to undermine the state’s regulatory framework for oil and natural gas development.

In a 2-1 decision last week, the Colorado Court of Appeals ruled that the Colorado Oil and Gas Conservation Commission (COGCC), the state’s regulatory arm, had to do more than balance the responsible development of oil and natural gas with the protection of health, safety, and the environment, which had served as the agency’s mandate for over a decade.

In the dissent, Judge Laurie Booras wrote that the agency had “consistently recognized” its duty to maintain this balance:

“The Commission has consistently recognized its duty to balance health and environmental concerns with the promotion of oil and gas development.”

On a conference call with reporters earlier this morning, Colorado Petroleum Council Executive Director Tracee Bentley expressed disappointment with the “sweeping decision” that “imperils jobs, incomes, and development of our natural resources in our state”:

“Colorado is a national leader in not only producing oil and natural gas but in protecting the environment. Our legacy of environmental stewardship is based on a transparent, collaborative process in which operators, state regulators and local officials work together to develop regulations based on Colorado’s specific geology. …

“This is why we are disappointed with the recent decision from the Colorado Court of Appeals, which we believe is without sound legal basis. The Colorado oil and natural gas industry’s long record of environmental stewardship belies the need for additional onerous rules and restrictions. This sweeping decision imperils jobs, incomes, and development of natural resources in our state.”

Bentley detailed the “major economic risks” of adding to an already extensive regulatory regime in the state:

“As the seventh largest producer of oil and natural gas in the country, interference with our successful regulatory process comes with major economic risks. The oil and natural gas industry in Colorado supports more than 200,000 jobs and provided over $26 billion in state economic activity and $1.6 billion in revenue to the state in 2012 alone. School districts in Colorado received nearly $202 million from oil and gas production property taxes in 2012 alone.”

Encouraging the COGCC to appeal, Colorado Oil and Gas Association President and Chief Executive Dan Haley pointed to how environmental protection has long been a “key pillar” in the state:

“Through the Colorado Oil and Gas Act, the Colorado Oil and Gas Conservation Commission (COGCC) has the statutory authority to regulate oil and gas development in Colorado. The Act has long been interpreted to encourage balanced oil and gas development in the state. … It’s clear the COGCC has employed this balancing act on numerous occasions as evidenced by Colorado’s comprehensive regulations, which are among the most stringent in that nation. … Coloradans can see for themselves that protection of our environment is a key pillar in existing statute. We encourage the COGCC to appeal this decision to the Colorado Supreme Court.”

Former COGCC director Dave Neslin called the decision “ironic,” considering the many environmental safeguards the agency had put into place over the past decade:

“It is ironic that the decision suggests the agency has not been sufficiently protective of the environment, when it has been a national and even international leader in mitigating the environmental effects of oil and gas development through things like chemical disclosure, groundwater monitoring, community consultation, wildlife protection, and site reclamation. The many hundreds of pages of regulations, policies, and guidance that the agency has issued during the past decade tangibly demonstrate the importance that it has placed on environmental protection.”

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On today’s call with reporters, Bentley highlighted the industry’s longstanding commitment to both developing energy and protecting the environment:

“Colorado’s oil and natural gas industry works with the state to foster the responsible, balanced development of our natural resources in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources. …

“When it comes to responsible energy development, Colorado has a record to be proud of, a proven tradition of responsible and safe energy development, and we’ll continue to build on that legacy.”

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