Colorado counties are reviewing and in some cases developing new rules for oil and gas production and exploration in response to the Niobrara shale boom


As more leasing and drilling is getting closer to the suburbs county governments whose responsibility includes lands overlying the Niobrara play are looking at updating regulations. Here’s a report from The Denver Post (Mark Jaffe). Click through and read the whole thing for all the detail. Here’s an excerpt:

Arapahoe and Douglas counties, like El Paso, are preparing to adopt oil and gas development rules. “We are fast-tracking rules,” said Arapahoe County Commissioner Fred Weddig. “We felt like we are playing catch-up.”

The trend, however, has provoked concern from state regulators and the industry.”Colorado already has the most comprehensive rules in the nation,” said Tisha Schuller, president of the Colorado Oil and Gas Association, a trade group. “County rules could completely stifle the industry.”

David Neslin, director of the state’s Oil and Gas Conservation Commission, said, “We believe oil and gas development is most effectively and efficiently regulated at the state level.”[…]

The activity in the counties is being driven by the feeling that they are ill-prepared to cope with a drilling boom and that the state regulations don’t address some residents’ worries…

Neslin said state rules enable it to put additional conditions on permits in more developed areas — and counties can participate as a “local designee” in the permitting process…

“There are questions of quality of life,” said Jill Duvall, a homeowner who organized the Elbert County Oil and Gas Interest Group, or ECOGIG. “There are questions about protecting property values. The state rules focus on drilling a well.”[…]

Both Duvall, from Elbert County’s ECOGIG, and a group from southern Larimer County, the Mineral Rights Information Gathering Committee, are seeking meetings with Gov. John Hickenlooper. “The rules in place didn’t have suburbia in mind,” said Fred Mitchell, a committee member. “Those rules don’t address the impact on quarter-acre lots. Nobody envisioned this in their backyard.”

As is often the case in oil and gas the people with the dollar signs in their eyes because they own some mineral rights may be in for an awakening. Wyoming is not seeing production equal to Colorado’s “Jake” well that helped start the current Niobrara boom. Here’s a report from Jeremy Fugleberg writing for The Billings Gazette. From the article:

While many well results in the formation are largely still not public, Wyoming Oil and Gas Supervisor Tom Doll said the wells drilled so far are only producing a fraction of the totals from a Colorado well that inspired exploration into the Niobrara in Wyoming. “The reason we’re not seeing a lot of drilling activity in the Niobrara is those wells are not coming in as strongly as people thought,” he told the state Legislature’s Joint Minerals, Business and Economic Development Interim Committee at its meeting in Cheyenne on Friday.

Bruce Hinchey is president of the Petroleum Association of Wyoming, the state’s oil and gas industry trade group. He said the low production rates are discouraging companies from drilling more wells more quickly in the state’s southeast…

EOG Resources’ Jake 2-01H well in Weld County, Colo., started the Niobrara excitement in 2009 when it produced the equivalent of 1,500 barrels of oil a day. It still produces between 250 to 300 barrels of oil a day, the company said in August. Wyoming’s Niobrara wells start at 400 to 700 barrels of oil a day, slip by half within three months, and slow another half within four to six months, Doll said. “None of these wells are the equivalent of the Jake-type well that everyone got excited about,” he said…

Hinchey told the legislators he and others have always been quick to caution people about the Niobrara’s potential. Some expected it to be like North Dakota’s booming Bakken oil field, or Wyoming’s huge Jonah natural gas field near Pinedale, he said. “It is not that,” he said. “And we’ve been saying that all along.”

More oil and gas coverage here and here.

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