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Hearing Set for Oil and Gas Proposal in Southeast Boulder County with COGCC Director’s Approval

July 31, 2018

Schlumberger Oil Field Services employees work on a Crestone Peak oil and gas extraction site in June near Erie. The Colorado Oil and Gas Conservation Commission on Monday advanced to an October hearing another comprehensive drilling plan by Crestone to drill up to 140 wells at five sites in a 10-square-mile area along Colo. 52 in eastern Boulder County.

An oil and gas firm’s plan to drill 140 wells in southeast Boulder County along Colo. 52 north of Erie was moved forward Monday by Colorado Oil and Gas Conservation Commission director Julie Murphy to be reviewed in an October hearing.

The comprehensive drilling plan proposed by Crestone Peak Resources to drain minerals from 10 square miles consisting mostly of Boulder County-owned open space east of North 107th Street to the county line went through five iterations, with the final version submitted in June, before being given the green light Monday.

With the approval of the state commission’s executive arm — delivered in a 14-page ruling signed by Murphy — the Crestone proposal now needs a go-ahead from the state agency’s nine-member commission before work begins to complete the final two processes at the state level: well location assessments and applications for approval to drill.

After completing those, and then moving through Boulder County’s regulatory oil and gas procedures, Crestone hopes to begin work on its well pad sites in 2020, company spokesman Jason Oates said.

Boulder County officials opposed the commission scheduling a hearing for the Crestone plan, which includes the drilling of five well pads with 28 wells each — down from the six well pads and 180 total wells the company originally proposed in its initial plan filed to the commission in September.

‘Tankless’ oil and gas storage

Crestone’s final plan indicates two well pads would be located south of Colo. 52 on what is known as the Haley open space parcel; one on private land north of the highway bordering the southern Panama Reservoir shore; and two more south of the road and east of the reservoir on another open space property known as the Wheeler parcel.

The company also has said it will use a pipeline to transport extracted materials to a remote storage facility — a method applauded by the commission — instead of building on-site surface storage for the harvests of its wells.

“A tankless system mitigates potential spills and releases, cuts down significantly on air emissions, reduces truck traffic, mitigates impacts to residences and minimizes public safety concerns related to tank batteries,” Murphy’s ruling said of the use of a pipeline. “Staff considers the tankless facilities and pipelines a crucial and necessary component to the planned development.”

Floodway clash

The proposed well pads on the Wheeler parcel were the subject of debate between Boulder County floodplain managers and Crestone last week at a county commissioners hearing that saw the adoption of expanded stream floodplains and floodways by the county.

An attorney for Crestone alleged the county influenced the Colorado Water Conservation Board’s redrawing of the Lower Boulder Creek floodway to intentionally include the company’s well pad sites, further snagging their proposed development from complying with building regulations.

Boulder County officials denied any involvement with the state’s floodway remapping based on drilling concerns.

Because of the new flood mapping, though, Crestone in its final submission included the potential development of an alternate well pad with 56 wells on the other side of Colo. 52 northwest of the Wheeler parcel, which, if chosen for the project, would effectively replace the Wheeler site as a well pad location.

But the alternate site is within a half-mile — 1,749 feet, to be exact — of a bald eagle’s nest, meaning it could still be developed as long as the drilling operator agrees to mitigate potential disturbances that could affect the nest.

Colorado Parks and Wildlife officials suggested the erection of a 30-foot sound wall barrier if the alternate site is the one selected for development.

In Murphy’s ruling, she said the commission prefers the development of the alternate site, which is within 1,000 feet of a commercial structure, as opposed to the Wheeler site, which is about 1,100 feet from homes.

″(The commission) will require similar measures to be implemented at both potential locations due to their relative similar proximity to residences,” the ruling said. “Based on the distances to wells and production facilities ... there isn’t an apparent material difference between the (Wheeler site) and the (alternate site) regarding impacts to public health.”

Colorado Department of Public Health and Environment officials prefer well pads be built on the Wheeler property, they told the commission, stating impacts of drilling on public health would be more easily mitigated there than the alternate site.

Plugging existing wells

There already are 101 active wells within the 10 square miles that would be drained by Crestone’s drilling, 75 of which Crestone operates, Oates said.

If the company’s proposal comes to fruition, Oates said Crestone would work to plug and abandon as many of its wells in the area as possible, stating the continued operation of the existing wells with their older technology could be more environmentally harmful than the new well pads.

Boulder County officials still object to the passage of Crestone’s plans onto state oil and gas commissioners, although county Land Use Department Chief Planner Kim Sanchez said officials needed time to review Murphy’s ruling before specifically addressing the logic on which it is based.

Sanchez pointed to the county’s comments on the latest draft of Crestone’s comprehensive drilling plan as persisting reasons county leaders feel the plan is unready to be considered final.

In those comments , Sanchez and Boulder County senior assistant attorney Katherine Burke claimed Crestone’s addition of the alternate well pad site was too sudden to allow for adequate public input; that Crestone failed to prove it possessed the appropriate mineral rights to drill in all of the proposed area; that the well pad sites within the redesignated floodway constitute a public safety risk; and that the commission itself “lacks sufficient criteria or standards by which it can assess a final comprehensive drilling plan for approval or denial.”

Murphy’s ruling said the agency ensured Crestone has rights to an appropriate percentage of minerals within each of its drilling areas, that it is unnecessary for Crestone to consider “all feasible sites within the proposed (area) for development” and that Crestone’s intended use of a pipeline to allow off-site hydrocarbon storage alleviates risk of an oil and gas leak during a potential flood.

“The ... proposed oil and gas locations and one alternate identified in the final comprehensive drilling plan do not eliminate all potential conflicts, but they do satisfy the vast majority of the site-specific comments that (the commission) received in opposition to the outlying pads,” Murphy’s ruling said.

The commissioners’ hearing regarding the Crestone plans is set on the agency’s Oct. 29 and Oct. 30 docket.

Sam Lounsberry: 303-473-1322, slounsberry@prairiemountainmedia.com and twitter.com/samlounz .

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