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Contentious Oil and Gas Bill’s Cost, Impact on Colorado Debated by Senate Committee

March 8, 2019
An oil field worker places well pipe on a rig in Weld County in Jan. 27, 2016.

Debate before a committee tasked with weighing the cost to the state of overhauling oil and gas regulations quickly morphed Thursday into the more far-ranging topic of the economic fall-out for the industry.

The Senate Finance Committee’s consideration of Senate Bill 19-181 follows the Senate Transportation and Energy Committee’s 4-3 vote Wednesday to move the bill along . An analysis by legislative staffers said the cost to state agencies of implementing the bill in the first year would be about $973,649, mostly for additional staffers.

The analysis also said charging oil and gas companies fees for drilling permits would raise about $3 million a year for the Colorado Oil and Gas Conservation Commission. The bill directs the commission to start charging fees, which it doesn’t now.

Industry officials say a mill levy companies pay already generates money to help finance the commission’s operations.

But most of the discussion by speakers in Thursday’s hearings centered on the money the state, schools and local governments will lose if the bill becomes law.

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“We believe this in effect is a moratorium,” Weld County Commissioner Barbara Kirkmeyer said of the bill.

At a minimum, the new regulations would severely reduce oil and gas activity in Weld County, which leads the state in the number of producing wells, Kirkmeyer added. The result will be the loss of millions of dollars in tax revenue for schools and other government services, she said.

Senate Majority Leader Steve Fenberg, co-sponsor of the bill, said the legislation wouldn’t amount to a de facto moratorium, that local regulations must be reasonable and could be challenged in court if they are not.

Supporters said the bill would make other important changes, such as increasing the bonds companies must pay to cover clean-up costs and take care of abandoned wells.

“If they can’t afford to safely run their business without harming our health, safety and environment, they shouldn’t be allowed to operate in Colorado,” said Sandy Toland of Aurora.

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The bill, co-sponsored by Fenberg and his fellow Democrat, House Speaker KC Becker, would rewrite state law to change the mission of the Colorado Oil and Gas Conservation Commission, the main regulatory body.

The bill would also give cities and counties authority to regulate oil and gas activities under their land-use and planning powers.

The Senate Finance Committee was expected to vote on the bill Thursday. If it passes, the legislation will go to the Senate Appropriations Committee before going to the full Senate.