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Fighting for Better Oil and Gas Drilling Regulations

Oil well

SOURCE: AP/Mead Gruver

A rig drilling an oil well for QEP Resources Inc. is shown on ranchland a few miles west of Cheyenne, Wyoming, Thursday, September 30, 2010.

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From New York to California—and many places in between—states and communities are struggling to come to grips with the oil and gas development boom that has taken off in recent years. They increasingly have to ask—and answer—more difficult questions about how best to regulate drilling so it protects public health, the environment, and the rights of nearby residents.

These questions don’t have easy answers, and many states have had to adapt to changing circumstances. Less than three years after Colorado officials approved a thorough overhaul of state oil and gas regulations, for example, the Colorado Oil and Gas Conservation Commission—the state agency that oversees drilling and related activities—has been making even more revisions to their policies over the past few weeks. The regulatory changes are at least partly in response to a surge in drilling of shale oil and shale gas deposits that are located near the densely populated corridor just east of the Rocky Mountain foothills, also known as the Front Range.

In response to concerns about the health and environmental effects of drilling, the Oil and Gas Conservation Commission agreed to increase the distance between the wells and homes and other occupied buildings. The agency also has plans to institute groundwater testing both before drilling begins and after production gets underway. Though it hailed some of these new rules as the most stringent in the nation, environmental groups and some elected officials have criticized the agency’s new rules as inadequate, flawed, and fraught with loopholes—an indication of how divisive the debates have become over drilling and the hydraulic fracturing technique known as fracking that is now used on the vast majority of oil and gas wells.

Though the Oil and Gas Conservation Commission agreed to require 500-foot buffers between residences and wells—up from the 350-foot setbacks in urban areas and 150-foot requirement in rural areas—some witnesses at the commission’s hearings said 1,000 feet should be the minimum distance required. “With the exponential increase in drilling along the Front Range, 500-foot setbacks don’t cut it,” said Mike Chiropolos of Western Resource Advocates in a statement from the law and policy nonprofit based in Boulder, Colorado. “While … better than current rules, it is not enough,” added Rep. Jared Polis (D-CO) in written testimony.

As the agency was wrestling with the issues of setbacks and groundwater testing, more communities in Colorado were edging toward local restrictions or outright bans on drilling. These pushes to exert greater local control over drilling have come despite the Oil and Gas Conservation Commission’s aggressive pushback in response to a drilling ban in the city of Longmont. The agency went so far as to file a lawsuit against the city, arguing that only the state agency—not a locality—can regulate oil and gas activity.

Longmont’s example appears to be emboldening other cities. In Fort Collins—a university city adjacent to a county that already has some 19,000 oil and gas wells—the city council is moving toward approving a ballot question in the April elections on banning fracking, which is a widely used method of stimulating production of oil and gas whose environmental and health effects aren’t yet clear. At the same time, the Boulder City Council is now discussing whether it needs its own fracking regulations independent of those of the state.

Meanwhile, just to the north in Wyoming—one of the most fossil-fuel-friendly states in the nation—there is also growing pressure to toughen regulation of the oil and gas industry. Legislation requiring the industry to test groundwater prior to drilling wells was recently killed in the state legislature, but state government agencies will likely address the issue in their rulemaking. Environmental and landowner groups are suing the state oil and gas commission for being too liberal in granting so-called trade-secret exemptions to energy companies that are reluctant to make public the components in their fracking fluids—a mixture of water, sand, and chemicals that is pumped at high pressure underground to crack rock formations and free the oil and gas trapped within. In 2010 Wyoming adopted what was at the time the first state requirement that fracking chemicals be disclosed, with an exemption for trade secrets—the proprietary formulas or practices that give them a market advantage.

Some other efforts to limit or ban oil and gas drilling and fracking around the nation include:

  • California regulators began what promises to be a lengthy rulemaking process on fracking with the release of a nine-page document that will serve as a discussion draft to solicit public opinion in advance of a formal rulemaking to begin early next year. The proposed rules—the state’s first effort to regulate fracking—would cover disclosure of well locations and chemicals used, including a trade-secrets exemption, handling of fracking fluids, and updated standards to ensure the structural integrity of oil and gas well casings to prevent contamination of groundwater. California is on the cusp of what could be a major drilling boom in the Monterey Shale in the central part of the state, which by some estimates could contain more than 15 billion barrels of oil. The federal Bureau of Land Management recently leased 18,000 acres for energy production there.
  • Alaska went a step further than California in issuing proposed changes to its fracking rules by requiring the disclosure of fracking fluid chemicals without a trade-secrets exemption. The proposals also would require groundwater testing near wells both before and after drilling, along with measures to ensure the structural integrity of cement casings in wells and notification of nearby landowners.
  • Even though there is no fracking being done yet in Connecticut, state legislators are introducing bills to ban the practice and prevent fracking wastewater from being stored or used in state.
  • In Maryland, where there is also no fracking activity yet, two lawmakers have said they will propose legislation similar to that of Connecticut to ban fracking.
  • In New York, fracking opponents submitted more than 200,000 public comments on revisions for gas drilling rules proposed by Gov. Andrew Cuomo’s (D) administration. The administration’s proposals cover a wide range of subjects, including expanding setbacks between wells and homes or buildings, public disclosure of chemicals used in fracking with a trade secrets exemption, and groundwater testing before and after drilling. Cuomo has come under sharp criticism for moving ahead on the regulations without completing a health review and environmental impact statement. In January more than 1,000 opponents of fracking protested outside the state capitol building during Cuomo’s State of the State address. New York has had a moratorium on fracking since 2010.

This frenzy of activity on drilling and fracking demonstrates that the controversies aren’t going away anytime soon. A regional officer of the Independent Petroleum Association of America’s Energy in Depth Project recently told National Public Radio that he thought the fracking controversy had such staying power because “it starts with F and ends with C-K.” But it goes much deeper than that—to people’s basic concerns about their health and safety, and about preserving the environment. The oil and gas industry will need to go a lot further in assuring us that all is well on those counts.

Tom Kenworthy is a Senior Fellow with the Center for American Progress.

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