Date: 01/27/2009

Final
BILL SUMMARY for SB09-004

SENATE COMMITTEE ON LOCAL GOVERNMENT AND ENERGY

Votes: View--> Action Taken:
Adopt Amendment L. 001 (Attachment A). The motion
Lay over Senate Bill 09-004 for future considerati
Postpone Senate Bill 09-004 indefinitely. The mot
Refer Senate Bill 09-004 to the Committee of the W		FAIL
FAIL
PASS
FAIL



03:28 PM -- Senate Bill 09-004

The committee was called to order. A quorum was present. Senator Greg Brophy, prime sponsor, presented Senate Bill 09-004, which delays the implementation of new rules promulgated by the Colorado Oil and Gas Conservation Commission (COGCC) concerning permit review, the protection of public, health, safety, and welfare, and the protection of wildlife resources. Senate Bill 009-004 would delay the implementation of the new rules until July 1, 2010. Senator Brophy talked about the significance of the oil and gas industry in the state and the potential harm of implementing the new rules authorized by 2008 session legislation. He said there was no third party analysis to assess the cost of implementing the new rules.


03:37 PM

Senator Brophy addressed a question about the membership on the COGCC and how new rules regulating the oil and gas industry are developed. The following people testified on the bill:

03:40 PM -- Mr. Jim Walker, Petron Development Company, spoke in favor of the bill. Mr. Walker said he spoke on behalf of small well operators in the state. He said small operators each operate less than 100 wells, but account for 40 percent of the state's total oil production. Mr. Walker expressed his concern with the ramifications of the new rules on small operators in the state. He explained that the bill will give small operators time to figure out how to implement the new rules in a cost-effective manner. Mr. Walker addressed questions about the economic effect of the new rules and explained the challenge of disposal of waste water produced by pit wells in accordance with the new rules.

03:52 PM -- Mr. Walker addressed additional questions about the number of wells he is currently operating and their average daily production. Senator Kester commented that the new rules will severely impact employment in his district. Mr. Walker expressed his frustration about the negative public image of the oil and gas industry in the state, and stated that the oil and gas industry is the number one income generator in the state.

03:56 PM -- Dr. Ken Gerdes, representing himself, spoke in opposition to the bill. Dr. Gerdes explained that he practices environmental medicine, and described his experience with patients that have, in his opinion, been adversely impacted by oil and gas exploration. Dr. Gerdes said he believes new regulations were needed for the oil and gas industry ten years ago and addressed questions from the committee and the bill sponsor about what regulations he believes are necessary.

 04:06 PM -- Mr. Michael Freeman, EarthJustice, spoke in opposition to the bill. He said that the deadline to implement the new rules is reasonable. Mr. Freeman explained that during the development of the new rules, testimony was heard from oil and gas industry representatives that they need regulatory certainty. He also explained how the rules work. Mr. Freeman addressed a question about whether the new rules will cause a drop in well production. He explained that in other states there has been a greater drop in rig count without the implementation of new rules. In response to a question, Mr. Freeman said that the new rules will not hurt the Colorado economy.

04:18 PM -- Ms. Heidi VanHuysen, Department of Natural Resources, spoke in opposition to the bill. Ms. VanHuysen explained the department's opposition. Ms. VanHuysen addressed a question about when the new rules will go into effect for companies that already hold permits to drill new wells. She also explained the composition of the COGCC. Ms. VanHuysen said the department and the COGCC sought industry input in the development of new rules.

04:30 PM -- Mr. Ken Wonstole, representing the Colorado Oil and Gas Association, spoke in favor of the bill. Mr. Wonstole described his concerns with the process of developing the new rules. He said compared to other states Colorado already has some of the most restrictive rules regarding the environmental impact of oil and gas development. Mr. Wonstole addressed an earlier question about the number of people employed by the oil and gas industry in the state. Mr. Wonstole addressed a question about the economic impact of the new rules on the state.

04:47 PM -- Mr. Stan Dempsy, President, Colorado Petroleum Association (CPA), spoke about the new rules. Mr. Dempsy explained the role of CPA in the development of the new rules He said the members of CPA do want regulatory certainty about operating in the state, but there are multiple concerns about conflicts between rules protecting wildlife habitat and the needs of the oil and gas industry. Mr. Dempsy addressed a question about the economic impact of new rules on the state. In response to a question, Mr. Dempsy said the CPA is willing to work with COGCC and the Department of Natural Resources on the implementation and development of new rules.

04:55 PM -- Ms. Sue Jarrett, representing herself, spoke in support of the bill. Ms. Jarrett said that the oil and gas industry pays 52 percent of the tax base in her community. She said the new rules have already hurt the Colorado economy. Ms. Jarrett described the differences she observes between regulations in Colorado and in neighboring states. She also described her concerns with the COGCC rule-making process.


05:09 PM

Senator Brophy made concluding remarks about the bill and said the bill only delays implementation of the new rules for a year. He then asked that the bill be laid over for a week.
BILL:SB09-004
TIME: 05:13:24 PM
MOVED:Lundberg
MOTION:Lay over Senate Bill 09-004 for future consideration. The motion failed on a vote of 2-3-2.
SECONDED:
VOTE
Cadman
Excused
Hodge
Excused
Kester
Yes
Lundberg
Yes
Newell
No
Foster
No
Schwartz
No
Not Final YES: 2 NO: 3 EXC: 2 ABS: 0 FINAL ACTION: FAIL
Prior to the vote, Senator Lundberg explained his motion to lay over the bill. Discussion ensued.

BILL:SB09-004
TIME: 05:17:59 PM
MOVED:Lundberg
MOTION:Refer Senate Bill 09-004 to the Committee of the Whole. The motion failed on a vote of 2-3-2.
SECONDED:
VOTE
Cadman
Excused
Hodge
Excused
Kester
Yes
Lundberg
Yes
Newell
No
Foster
No
Schwartz
No
Not Final YES: 2 NO: 3 EXC: 2 ABS: 0 FINAL ACTION: FAIL

BILL:SB09-004
TIME: 05:18:34 PM
MOVED:Lundberg
MOTION:Adopt Amendment L. 001 (Attachment A). The motion failed on a vote of 2-3-2.

09SenateLoc0127AttachA.pdf
SECONDED:
VOTE
Cadman
Excused
Hodge
Excused
Kester
Yes
Lundberg
Yes
Newell
No
Foster
No
Schwartz
No
Not Final YES: 2 NO: 3 EXC: 2 ABS: 0 FINAL ACTION: FAIL
Prior to the vote, Senator Brophy distributed and briefly explained Amendment L.001 (Attachment A). Discussion ensued.

BILL:SB09-004
TIME: 05:21:04 PM
MOVED:Newell
MOTION:Postpone Senate Bill 09-004 indefinitely. The motion passed on a vote of 3-2-2.
SECONDED:
VOTE
Cadman
Excused
Hodge
Excused
Kester
No
Lundberg
No
Newell
Yes
Foster
Yes
Schwartz
Yes
Final YES: 3 NO: 2 EXC: 2 ABS: 0 FINAL ACTION: PASS