Erie’s oil and gas agreements could serve as statewide mode

Operators required to go beyond Colo. regulations on drilling
By John Aguilar Camera Staff Writer – 09/06/2012

Highlights of Erie’s stipulationsMaximize equipment and wellhead setbacks from occupied buildings.

Use steel-rim berms around tanks and separators instead of sand or soil berms.

Use closed-loop systems for drilling and completion operations.

Use a high-low pressure vessel and vapor recovery unit for new wells.

Prohibit the use of hydraulic fracturing fluid products containing diesel, 2-Butoxyethanol (2-BE) or benzene.

Continue discussions to identify a water source close to the well site as part of an effort to reduce truck traffic.

Longmont took a hard-nosed approach to oil and gas drilling in town, enacting a set of rules that went above and beyond what the state requires of operators.

Erie chose a more subdued route, crafting agreements with two drilling companies that get them to voluntarily adopt operational measures and safeguards not required by the Colorado Oil and Gas Conservation Commission.

Longmont is now embroiled in a legal battle with the state, which sued the city in July for attempting to exercise powers it says exclusively belong to COGCC. The commission, meanwhile, lauded Erie for the memoranda of understanding, or MOUs, the town signed with Encana Oil & Gas and Anadarko Petroleum Corp. last week.

“Erie chose to sit down with the operators and come to an agreement,” COGCC Director Matt Lepore said Thursday. “By doing that, they achieved what they wanted to achieve without ordinances.”

Specialized contracts between local governments and oil and gas operators aren’t new in Colorado — La Plata County has been entering into MOUs with operators for years — but Lepore said what was once done on a well-by-well basis is now, with Erie’s Aug. 28 vote, being done on a company-by-company basis.

Erie Trustee Mark Gruber, who voted to sign the agreements, said coming to an understanding with operators was the town’s only choice in the face of a legal landscape where court case after court case has made it clear that oil and gas extraction is the purview of the state and not local governments.

“We’re very aware of the state’s reluctance to give up its control of oil and gas drilling activity in the state,” Gruber said. “We have a responsibility to the taxpayers not to waste their money in litigation.”

The cooperative approach Erie took on an issue that has caused heartburn for communities throughout Colorado, Lepore said, could be a lesson for others in how to navigate the regulatory landscape in which municipalities warily watch oil and gas companies punching drills into the ground near homes and schools.

“I think it can serve as a model, and it’s a very viable model,” he said. “We thought what Erie, Encana and Anadarko did was a win-win.”

MOUs take effect this week

Requirements of the MOUs — which took effect this week after Erie allowed its six-month moratorium on new drilling permits to expire — include the use of steel-rim berms around tanks and separators, closed-loop systems for drilling and completion operations, and a more effective vapor recovery unit for new wells. The companies also agreed not to use hydraulic fracturing fluid products that contain diesel, 2-Butoxyethanol or benzene.

The agreements are valid for three years.

Read more at The Denver Post

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