First Regular Session

Sixty-first General Assembly

LLS NO. 97­0448.01 DHG SENATE BILL 97­121

STATE OF COLORADO

BY SENATOR B. Alexander;

also REPRESENTATIVE Owen.

AGRICULTURE, NATURAL

RESOURCES & ENERGY

A BILL FOR AN ACT

CONCERNING THE AUTHORITY OF THE OIL AND GAS CONSERVATION COMMISSION TO ADOPT UNIFORM RULES GOVERNING OIL AND GAS OPERATIONS.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Declares that the regulation of oil and gas operations is a matter of statewide concern. Repeals current provisions conferring on the oil and gas conservation commission exclusive authority over all matters relating to the conservation of oil and gas. Enacts substitute provisions expressly preserving the authority vested in federal and tribal agencies and other units of state government and conferring upon the commission jurisdiction to:

Ë Hold hearings on matters arising under the oil and gas conservation statutes and involving interested parties";

Ë Adopt rules governing the conduct of such hearings; and

Ë Adopt rules prescribing setbacks and other siting standards, noise and visual impact standards, and financial assurance requirements in connection with oil and gas operations.

Defines the following as "interested parties" for purposes of administrative hearings:

Ë A local government, with regard to public health, safety, and welfare concerns related to a commission rule, permit, or order or oil and gas operations within the local government's jurisdiction;

Ë An owner or operator, as defined in current statutes; and

Ë A person or group that is not an owner or operator and that is directly and adversely affected or aggrieved by a commission rule, permit, or order or an oil and gas operation.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  34­60­102 (2), Colorado Revised Statutes, 1995 Repl. Vol., is amended, and the said 34­60­102 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:

34­60­102.  Legislative declaration. (2)  It is further declared to be in the public interest to assure that producers and consumers of natural gas are afforded the protection and benefits of those laws and regulations of the United States which affect the price and allocation of natural gas and crude oil, including the federal "Natural Gas Policy Act of 1978", 15 U.S.C. 3301, and particularly that the oil and gas conservation commission, established by section 34­60­104, be empowered to exercise such powers and authorities as may be delegated to it by the laws or regulations of the United States, including said "Natural Gas Policy Act of 1978", and, in the exercise of such powers and authorities, to make such rules and regulations and to execute such agreements and waivers as are reasonably required to implement such power and authority.

(3)  THE GENERAL ASSEMBLY FURTHER FINDS, DETERMINES, AND DECLARES THAT IT IS IN THE PUBLIC INTEREST TO FOSTER, ENCOURAGE, AND PROMOTE THE DEVELOPMENT, PRODUCTION, AND USE OF THE NATURAL RESOURCES OF OIL AND GAS IN COLORADO IN A MANNER THAT IMPROVES THE EFFICIENCY OF OIL AND GAS OPERATIONS THROUGHOUT THE STATE, AVOIDS DUPLICATION BETWEEN STATE AND LOCAL REGULATIONS, AND ELIMINATES EXISTING AND POTENTIAL CONFLICTS BETWEEN THE OIL AND GAS CONSERVATION COMMISSION AND LOCAL GOVERNMENTS. THIS DECLARATION IS MADE IN RECOGNITION OF THE SUBSTANTIAL ECONOMIC AND ENVIRONMENTAL BENEFITS RECEIVED BY THE STATE OF COLORADO FROM DEVELOPMENT OF OIL AND GAS, THE EXTENSIVE REGULATIONS TO WHICH THE INDUSTRY IS SUBJECT, AND THE NEED FOR UNIFORMITY IN SUCH REGULATIONS. IT IS ALSO THE INTENT AND PURPOSE OF THIS ARTICLE TO CLARIFY STATE LAW WITH RESPECT TO THE SCOPE OF THE COMMISSION'S AUTHORITY.

SECTION 2.  34­60­105, Colorado Revised Statutes, 1995 Repl. Vol., is REPEALED AND REENACTED, WITH AMENDMENTS, to read:

34­60­105.  Powers of commission. (1)  THE GENERAL ASSEMBLY FINDS, DETERMINES, AND DECLARES THAT OIL AND GAS OPERATIONS AND THE REGULATION THEREOF ARE MATTERS OF STATEWIDE CONCERN.

(2)  THE COMMISSION HAS SOLE AND EXCLUSIVE JURISDICTION TO DETERMINE THE NEED FOR, AND TO ADOPT AND ENFORCE, RULES GOVERNING OIL AND GAS OPERATIONS IN THIS STATE EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION.

(3)  THE COMMISSION HAS JURISDICTION OVER ALL PERSONS AND PROPERTY, PUBLIC AND PRIVATE, NECESSARY TO ENFORCE THE PROVISIONS OF THIS ARTICLE AND HAS THE POWER TO MAKE AND ENFORCE RULES, REGULATIONS, AND ORDERS PURSUANT TO THIS ARTICLE AND TO DO WHATEVER MAY REASONABLY BE NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTICLE.

(4)  THIS SECTION SHALL NOT BE CONSTRUED TO NEGATE OR OTHERWISE AFFECT:

(a)  THE AUTHORITY GRANTED UNDER FEDERAL OR STATE LAW OR TREATY TO ANY AGENCY OF THE UNITED STATES, ANY INDIAN TRIBE, OR ANY DEPARTMENT OR ADMINISTRATIVE AGENCY OF STATE GOVERNMENT; OR

(b)  THE AUTHORITY OF ANY LOCAL GOVERNMENT TO GRANT ROAD USE AND BUILDING PERMITS RELATED TO OIL AND GAS OPERATIONS SO LONG AS SUCH PERMITS AND THE RULES OR ORDINANCES GOVERNING THEIR ISSUANCE ARE APPLICABLE TO INDUSTRIAL OR CONSTRUCTION ACTIVITIES IN GENERAL.

(5) (a)  THE COMMISSION HAS JURISDICTION TO HEAR ALL MATTERS RELATING TO THE ADMINISTRATION OF THIS ARTICLE AND SHALL ADOPT RULES AND PROCEDURES PROVIDING FOR THE HEARING OF ANY SUCH MATTER THAT IS RAISED BY AN INTERESTED PARTY.

(b)  AS USED IN THIS SUBSECTION (5), "INTERESTED PARTY" MEANS ANY OF THE FOLLOWING:

(I)  A LOCAL GOVERNMENT SEEKING TO ADDRESS PUBLIC HEALTH, SAFETY, AND WELFARE CONCERNS RELATED TO A COMMISSION RULE, PERMIT, OR ORDER OR AN EXISTING OR PROPOSED OIL AND GAS OPERATION WITHIN THE TERRITORIAL JURISDICTION OF SUCH LOCAL GOVERNMENT;

(II)  AN OWNER OR OPERATOR;

(III)  A PERSON OR GROUP OF PERSONS THAT IS NOT AN OWNER OR OPERATOR AND THAT IS DIRECTLY AND ADVERSELY AFFECTED OR AGGRIEVED BY A COMMISSION RULE, PERMIT, OR ORDER OR AN EXISTING OR PROPOSED OIL AND GAS OPERATION.

(6)  THE ATTORNEY GENERAL SHALL BE THE LEGAL ADVISOR OF THE COMMISSION AND SHALL REPRESENT THE COMMISSION IN ALL COURT PROCEEDINGS AND IN ALL PROCEEDINGS BEFORE IT AND IN ANY PROCEEDINGS TO WHICH THE COMMISSION MAY BE A PARTY BEFORE ANY DEPARTMENT OF THE FEDERAL GOVERNMENT.

SECTION 3.  34­60­106 (11), Colorado Revised Statutes, 1995 Repl. Vol., is amended to read:

34­60­106.  Additional powers of the commission. (11)  The commission shall HAS THE AUTHORITY TO promulgate rules and regulations AS NECESSARY to protect the health, safety, and welfare of the general public in the conduct of oil and gas operations, INCLUDING, BUT NOT LIMITED TO:

(a)  SETBACKS AND OTHER SITING STANDARDS FOR THE LOCATION OF WELLS AND OTHER FACILITIES RELATED TO OIL AND GAS OPERATIONS;

(b)  NOISE AND VISUAL STANDARDS TO MITIGATE THE IMPACTS OF OIL AND GAS OPERATIONS ON SURROUNDING AND ADJOINING AREAS; AND

(c)  FINANCIAL ASSURANCE REQUIREMENTS TO PROTECT THE PUBLIC HEALTH, SAFETY, AND WELFARE.

SECTION 4.  Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.