New state oil, gas rules advance thanks to Dems

DENVER • After nearly two years of drafting and debate, rules imposing new environmental restrictions on gas and oil exploration in Colorado passed their last key test in the state Legislature with preliminary approval Tuesday by the Senate on a party-line vote. A pro-forma final Senate vote on the bill including the new rules will send it to Gov. Bill Ritter, who is sure to sign it.

Senate Republicans argued in vain for an amendment offered by Minority Leader Josh Penry, R-Grand Junction, that would have curtailed regulatory input from landowners, their neighbors and state agencies while increasing limits on drilling near water supplies and fines for noise and odor violations.

"Oil and gas is a second-class citizen in this building and to this administration," said Penry, who is often mentioned as a possible challenger to Ritter in the 2010 gubernatorial election.

Democrats, who have a 21-14 majority in the Senate, rejected the contention of Sen. Greg Brophy, R-Wray, that a recession was not the time to impose tougher rules on the energy sector, "the biggest and most important industry in the state of Colorado." He spoke of energy-sector job losses in his hometown and said of the new rules, "You know a mistake when you see it."

Sen. Bill Cadman, R-Colorado Springs, described the rules as "draconian."

"This bill means no business," said Sen. Kevin Lundberg, R-Berthoud. "It means we're shutting down the oil and gas business."

Drilling activity already is down sharply throughout the West. But missing from the Republican arguments was any evidence that the downturn in Colorado drilling was caused by the new rules, which go into effect April 1, or could be cured by changing them.

The recession has reduced demand for energy, and the prices of gas and oil are down more than two-thirds from 2008 highs. In response, drillers are mothballing rigs and laying off workers.

"There is no question that jobs are down because the economy is down," said the bill's Senate sponsor, Jennifer Veiga, D-Denver. She said the new rules were on par with those on the books in neighboring states.

Sen. Gail Schwartz, D-Snowmass, noted that more than 4,000 drilling permits already granted and not subject to the new rules are currently sitting unused.

Democrats also dismissed Brophy's assertion that the rules go beyond the mandate of the state Oil and Gas Conservation Commission.

The new rules are the result of laws passed in 2007 giving the Oil and Gas Commission, an executive-branch agency answering to Ritter, the authority to increase protections for the environment and wildlife in Colorado's gas and oil patch, booming at the time.

Veiga said that the only question before the Senate was whether the commission properly exercised its mandate, and that at this stage the new rules could not be tinkered with.

The measure passed on a voice vote. In the roll-call vote on the Penry amendment, all 21 Democrats voted no and 12 of the 14 Republicans voted yes. The other two Republicans were absent.

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Gazette writer Schroyer contributed to this report.