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Colorado Oil & Gas Rule Change Effective This Week

This week, Colorado legislators will meet for three days to handle several bills before taking a recess until February 16.

In December, Gov. Jared Polis moved state legislators and other essential government workers into Phase 1b of the state’s vaccination plan to ensure their safety. Although by the time they return in February, they will not be fully immune as the vaccines require two doses and a couple weeks of immune response.

After the 2020 election, Democrats hold a state government trifecta with control of the governor’s office and majorities in both state legislative chambers.

The state has $11 billion in discretionary spending, and it will be a challenge to balance the budget given limited federal support. Polis has proposed a $1.3 billion stimulus package.

The state requires masks to be worn in most indoor settings, but it’s not enforced for lawmakers inside the Capitol. Some Republican lawmakers declined to wear masks during the special December session and about one-third of the legislature decided to participate remotely.

Senate Bill 181, which was signed into law by Polis in 2019, underwent rulemaking in late 2020. The Colorado Oil and Gas Conservation Commission finalized rule changes in November to implement the bill in 2021. The new rules will take effect January 15 and will impact the oil and gas extraction process in the state:

  • Regulators have to account for previous environmental impacts to nearby communities
  • New wells must be located to avoid harm to aquatic habitats and critical wildlife species
  • Certain chemicals will no longer be allowed for hydraulic fracturing
  • Routine flaring or venting will not be permitted.

PESA is monitoring SB 181’s effect on association members and previously analyzed it here.

The state also approved the 2,000-foot setback rule between wells and occupied buildings. There are exceptions for companies, which will be reviewed on a case-by-case basis.

Like other oil and gas producing states, Colorado saw a steep decline in production during 2020 in both rigs and employment. Production has dropped 13% and employment about 18% year over year in September. 

For more information on state government affairs, contact PESA Vice President Government Affairs Tim Tarpley.



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