Colorado's Legislature gave final approval April 3 to a bill that would dramatically change how the state regulates its multibillion-dollar oil and gas industry and sent it to Democratic Gov. Jared Polis, who is expected to sign it.
The bill would make the protection of public health and the environment the top priority of regulators and grant local governments new authority over where wells can be drilled.
Currently, regulators' top priority is encouraging production, and only the Colorado Oil and Gas Conservation Commission, the state's regulatory body, can approve well locations.
Conservation groups praised the bill as a step toward protecting people and the environment, but industry groups said it threatens a vital segment of the state economy.
Colorado ranks fifth in the nation for crude oil production and sixth for natural gas. The Colorado Oil and Gas Association says the industry contributes $32 billion annually to the state's economy.
Oil and gas drilling has long been contentious in Colorado, where fast-growing communities have expanded into the rich Wattenberg oil and gas field north of Denver.
Minority Republicans in the House and Senate mounted fierce challenges to the bill but fell short. The Senate was the bill's final hurdle, and it passed on a 19-16 party-line vote, with majority Democrats supporting it.
Republicans and the industry won a few concessions, including a change in the bill's language so new state and local restrictions would have to be “necessary and reasonable.”
That was not enough to soften industry opposition, however.
“Our industry remains firmly opposed to this bill because it threatens one of the pillars of Colorado's economy,” the Colorado Oil and Gas Association and the Colorado Petroleum Council said in a joint statement.
The bill also changes the makeup of the Oil and Gas Conservation Commission to weaken industry influence and adds new requirements for “forced pooling,” a process that allows an energy company to extract oil and gas owned by multiple parties — even those who object — and then distribute the profits among them.
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