Energy compromise welcomed, but questions remain

Phil Castle, The Business Times

Western Colorado officials welcome a last-minute compromise that keeps energy development measures off the November election ballot.

But the creation of a new task force charged with coming up with ways to reduce land use conflicts involving oil and natural gas operations likely will constitute only part of the effort to resolve  the issue, officials say.

David Ludlam, executive director of the West Slope Colorado Oil & Gas Association, said the industry will continue to listen to and address concerns.

Meanwhile, Bonnie Peterson, executive director of Club 20, wants to make sure Western Colorado is well represented on the task force given the region accounts for the majority of natural gas production in the state.

Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, said that ultimately, existing state regulations combined with local land use controls already are sufficient to govern energy development.

Colorado Gov. John Hickenlooper announced the creation of a task force to address land use conflicts related to energy development as an alternative to what was shaping up as a fierce election battle.

Two proposed measures would have bolstered local control over energy development by adding what was dubbed an environmental bill of rights to the state constitution as well as required a 2,000-foot setback for drilling operations from homes.

Two more counter measures would have withheld state oil and gas revenue from communities banning drilling and required a fiscal impact note for all initiatives.

U.S. Rep. Jared Polis, a Democrat from Boulder, agreed to drop the two control measures, as did backers of the counter measures. In addition, the Colorado Oil and Gas Conservation Commission voted to dismiss a lawsuit against the City of Longmont over an ordinance banning drilling in residential areas.

“The work of this task force will provide an alternative to ballot initiatives that, if successful, would have regulated the oil and gas industry through the rigidity of constitutional amendments and posed a significant threat to Colorado’s economy,” Hickenlooper stated in a news release.

“This approach will put the matter in the hands of a balanced group of thoughtful community leaders, business representatives and citizens who can advise the Legislature and the executive branch on the best path forward,” Hickenlooper added.

Polis also praised the task force in the news release. “For the first time, citizens will be on equal footing to the oil and gas industry and able to negotiate directly for regulations that protect property rights, home values, clean water and air quality.”

The 18-member task force will be chaired by Gwen Lachelt, a La Plata County commissioner, and Randy Cleveland, president of XTO Energy. The group will include representatives from the energy, agricultural and construction industries as well as local governments, civic leaders and conservation groups.

The task force will have the power to make recommendations to the State Legislature with a two-thirds majority or issue majority and minority opinions.

Ludlam hailed the compromise as good news over the short term.

But over the long-term, the energy industry in Colorado will continue to work to respond to and address concerns about operations, he said.

In a letter to Hickenlooper that also was released to Colorado media outlets, Peterson praised the governor for “overcoming a seemingly impossible stalemate around Colorado’s wouldbe cataclysmic oil and natural gas ballot initiatives.”

Writing on behalf of Club 20 — a Grand Junction-based coalition of businesses, governments and individuals in the region — Peterson formally requested that half the members of the task force come from oil- and natural gas-producing counties in Western Colorado.

The Western Slope constitutes half of Colorado and accounts for the majority of natural gas production in the state, Peterson noted. Moreover, leaders from the region have experience in dealing with the complexities involved in energy development around communities, she added.

Peterson also proposed on behalf of Club 20 that at least two industry representatives should include companies whose operating interests are not split between the Front Range and rural areas.

“Western Colorado concerns impacting West Slope energy companies have been under represented during recent regulatory proceedings,” Peterson wrote. “It is critical that this voice not be left out in the blue ribbon task force discussions.”

Peterson added: “As the voice of Western Colorado, Club 20 fears that task force appointments made based on population density and the expedience of short-term political considerations will once again disadvantage Western Slope interests.”

At the Grand Junction Area Chamber of Commerce, Schwenke said she was both surprised and relieved by the compromise creating the task force and ending for now what likely would have been a costly campaign for and against the ballot measures.

The Grand Junction chamber as well as other business groups and the agricultural industry were concerned the so-called environmental bill of rights was so vaguely worded it could have hampered not only energy development, but also other business practices and agricultural operations, Schwenke said.

Still, Schwenke said she’s not certain what the task force can recommend. She said state regulations and local zoning and land use controls already are sufficient in governing energy development. She cited as an example the energy master plan developed in Mesa County.