Trade group drops lawsuit over drilling regulations

A trade group representing oil and natural gas drillers in Colorado has announced it’s dropping a lawsuit over newly enacted state drilling regulations.

The Colorado Oil and Gas Association (COGA) filed suit against the state of Colorado in May 2009 after then-Gov. Bill Ritter signed House Bill 1292 into law.

The law directed the Colorado Oil and Gas Conservation Commission to give higher priority to air and water quality, wildlife habitat and public safety in issuing drilling permits.

The new regulations call for energy companies to keep an inventory of chemicals stored near drilling sites, ensure wells are a specified distance from sources of drinking water and work more closely with wildlife officials when proposing future drilling sites.

At the time they were approved by the State Legislature, COGA called the rules “the most costly and burdensome” regulations in the country.

On Feb. 3, COGA released a joint statement with the Colorado Department of Natural Resources announcing COGA was dropping the suit after talking with members of Gov. John Hickenlooper’s new administration.

“We are confident that going forward, we will have a place at the table and our concerns will be fairly considered,” said Tisha Conoly, president and chief executive officer of COGA.

Said Hickenlooper: “This heralds what we hope will be a new era of collaboration and predictability in the development of our energy resources. It’s important to get beyond old fights and move ahead to develop Colorado’s abundant natural gas and protect our environment at the same time.”

Colorado has seen an upturn in natural gas extraction since the rules took effect, but energy companies say the regulations have added to the cost of operations and could result in less production than might otherwise occur in the state.

Analysts say the recent upturn in business is fueled by increased demand as manufacturing rebounds and companies use more natural gas.