Phil Castle, The Business Times

Natural gas development likely will continue mostly unchanged in Western Colorado next year, according to executives with three companies operating in the region.

“2019 is probably going to look a lot like 2018,” said Chris Clark, field manager for Laramie Energy.

Michael Rynerson, vice president of operations for Caerus Energy, and Matt Honeycutt, vice president of operations for Ursa Resource Group, also said activity will be similar.

While voters rejected a measure that would increased setbacks on energy activity and a federal agency that leases public lands for oil and natural gas development has adopted a different tone under the Trump administration, the industry still faces regulatory uncertainty, the three said.

Clark, Rynerson and Honeycutt shared what was billed as the “view from the top”  during an energy briefing hosted by the Grand Junction Area Chamber of Commerce.

Laramie Energy runs one drilling rig and operates more than 1,500 wells in the Collbran and DeBeque areas that produce a total of 250 million cubic feet of natural gas a day, Clark said.

After acquiring assets held by Encana in the Piceance Basin of Western Colorado,  Caerus Energy runs three drilling rigs and operates 4,100 wells that produce a total of 420 million cubic feet of gas a day, Rynerson said.

Ursa operates runs one drilling rig and operates 600 wells in the Rifle and Parachute areas that produce a total of 130 million cubic feet of gas a day, Honeycutt said.

The three said those levels of activity likely will remain unchanged in 2019, although Rynerson said gas production could increase 30 percent for his company and Clark said some activity could shift from Mesa County to Garfield County.

Asked about the results of the November election, the three said they were pleased voters rejected Proposition 112, a measure that would have required new oil and natural gas development in Colorado to be located at least 2,500 feet from occupied structures, water sources and areas designated as vulnerable. By one estimate, the measure would have excluded 85 percent of non-federal land in the state from development.

Clark said Colorado voters also elected a new governor and new members of the Legislature that shifted control to the Democratic party. The result could be a flurry of new regulations that inflict on the energy industry what he called “death by a thousand cuts.”

Rynerson said he wishes regulations would take into account crucial differences between energy development in Western Colorado and elsewhere in the state. Regulations that might apply to oil development in the Denver-Julesburg Basin don’t work for natural gas development in the Piceance Basin, he said. “It’s just a whole different animal.”

Regional specific regulations and more local controls could help, he said.

Honeycutt attributed some of the conflicts that have occurred along the Front Range and other areas of the state to the expansion of residential and commercial development into existing oil and natural gas fields.

Regulatory uncertainty affects operations, planning and the ability to attract investors, Clark, Rynerson and Honeycutt said.

“It’s one of the threats we have to deal with,” Rynerson said.

Honeycutt agreed. “Short answer, yes.”

Meanwhile, though, the U.S. Bureau of Land Management has been more willing under the Trump administration to work with energy companies operating on federal lands, the three said. “I think there’s a different tone,” Clark said.

Rynerson said the change is encouraging, although inconsistencies persist between BLM offices in Colorado. Limitations on energy development on greater sage grouse habit remains an issue as well, he said.

Clark said state oversight imposed by the Colorado Oil and Gas Conservation Commission has become a bigger challenge than federal agencies.

The proposed Jordan Cove liquefied natural gas export terminal in Oregon could help energy companies find Asian markets for natural gas produced in Western Colorado, but approval and construction of the project remains uncertain, Clark, Rynerson and Honeycutt said.

“It’s nothing we can plan for now,” Honeycutt said.

Businesses can support the energy industry, the three said, by learning about the industry and its role in the Colorado economy.

“Educate your neighbor. Educate your friend. Ask questions. Reach out,” Honeycutt said.