Friday, July 3, 2009

Gas, Oil Leases / State v. Fed Law in Colo.

July 1, 2009

Feds, Colo. hash out agreement on oil, gas rules

By JUDITH KOHLER Associated Press Writer
Colorado's new oil and gas rules, denounced by the industry as the most burdensome in the country, now apply to federal land as well as private and state land.

Stricter oil and gas regulations took effect on private and state land in Colorado on April 1. Enforcement of the rules was delayed on federal land to give state and federal officials time to sort through any conflicts.

Last week, state regulators approved agreements with the Bureau of Land Management and U.S. Forest Service. The rules took effect on federal land in Colorado on Wednesday.

Dave Neslin, director of the Colorado Oil and Gas Conservation Commission, said the agreements recognize that energy development on federal land is subject to both federal and state rules. He said companies will be encouraged to consult with both state and federal agencies. Decisions on projects where state and federal rules overlap or conflict will be made case by case.

The state commission regulates the industry and issues all oil and gas permits, including those on federal land. Roughly 15 percent of the oil and gas wells in Colorado are on federal lands.

Industry groups and companies have questioned the state's authority to regulate development on federal and have said they could wind up not knowing which regulations to follow.

Neslin said court decisions support a state's right to apply environmental laws on federal land. He said the state commission has consulted with the state attorney general's office.

The Colorado Oil and Gas Association, a trade group, said in written comments June 23 that the state-federal agreement "is a meaningless document, solving no problem created by the new rules."

The trade group has filed a lawsuit seeking to throw out the rules.

"As we go through it, we'll be smoothing it out. There's no doubt about that," Jamie Sellar-Baker, acting branch chief for the fluid minerals division of the Colorado BLM, said of her agency's agreement with the state.

Sellar-Baker said state and federal agencies will continue to follow their own planning processes and environmental reviews and discuss any potential disagreements early on. She said the agreement is intended to provide an opportunity for "clear and open dialogue."

The new regulations include dozens of new or modified rules meant to fulfill 2007 laws requiring more consideration of the environment, wildlife and public health and safety when approving oil and gas development.

The laws were passed during Colorado's natural gas boom. Industry officials have blamed Colorado's declining oil and gas production in part on the new regulations, which they say are the most restrictive in the country.

State regulators and the rules' proponents, including environmental, hunting and angling groups, say the recession, low natural gas prices and tight credit are behind the decline, not the regulations.

Colorado had 39,394 active oil and gas wells through June 6.

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