A natural gas rig in Garfield County. Photo by David O. Williams

On Thursday, Rep. John Salazar, a blue-dog Democrat from Colorado’s natural-gas-rich 3rd Congressional District and the brother of Interior Secretary Ken Salazar, introduced an amendment that would strip out many of the most stringent aspects of a key energy reform bill still being debated in the House.

House Energy and Natural Resources Chairman Nick Rahall’s CLEAR Act (Consolidated Land, Energy, and Aquatic Resources) – introduced nearly a year ago by the West Virginia Democrat – would eliminate “categorical exclusions” by the BLM that allow oil companies to sidestep federal environmental review policies for drilling on public lands.

A rancher in southern Colorado, Salazar – despite polling in his district suggesting he’s off-base – voted against climate legislation the House narrowly passed last summer and opposes federal regulation of the controversial drilling practice called hydraulic fracturing.

Not all ranchers in energy-rich areas of the state agree with Salazar’s approach on agricultural issues as they relate to oil and gas production.

“The West is more than just potential gas and oil fields; it is a way of life for those who work, live or play here,” Moffat County rancher Wes McStay said. “For too long, those of us who make our living on the land have been subject to the risks from oil and gas drilling. It is time that Congress requires that big oil and gas companies use the best and safest practices available.”

Last summer, U.S. Rep. Diana DeGette, D-Denver, introduced the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act to remove an exemption for hydraulic fracturing – in which water, sand and undisclosed chemicals are injected into gas wells to fracture geological formations and free up more gas – under the Safe Drinking Water Act. That exemption was granted during the Bush administration in the Energy Policy of Act of 2005, which also allowed for categorical exclusions to speed up natural gas drilling.

An earlier version of Rahall’s CLEAR Act contained DeGette’s calls for public disclosure of chemicals used in hydraulic fracturing, or “fracking,” because of health concerns related to the possible contamination of drinking water supplies by the process. That language is no longer in the Rahall bill but is in a bill introduced this week in the Senate by Majority Leader Harry Reid, D-Nev.

The Senate’s Clean Energy Jobs and Oil Company Accountability Act requires companies make proprietary fracking formulas public on the Internet, but it wouldn’t reverse the Safe Drinking Water Act exemption that blocks the Environmental Protection Agency from regulating the process.

Major gas producers in Colorado want the state to continue to regulate the process and the feds to stay out of hydraulic fracturing, which they claim is safe and has never been proven to cause groundwater contamination. But a new report by the National Wildlife Federation suggests the process is far more dangerous than the industry lets on, including potential risks to emergency responders dealing with fracking chemical spills.

Produced water spills – sometimes caused by the improper storage or handling of water used in hydraulic fracturing – are fairly common, although industry officials point out that the percentage of toxic chemicals in the water is actually very low.

Still, a review of the Colorado Oil and Gas Conservation Commission (COGCC) website by the Colorado Independent found a pattern of spills by just one operator in one Colorado county over the past eight years.

BP America, according to the state oil and gas regulatory agency, has self-reported 141 produced water spills totally nearly 1.2 million gallons of fluids in La Plata County since 2002. The most recent one – in February on Southern Ute tribal lands – spewed 189,000 gallons of produced water.

BP America’s Senior Director of Government and Public Affairs Lisa Hough said fracking is not to blame and can be handled by state regulators.

“We really think that the states have done, especially Colorado, has been a leader, and we think the state rules and regs have been sufficient,” Hough said in an earlier interview. “You have to remember there’s never been an incident of fracking, or a claim that a frack job itself, has caused any violation of the Safe Water Drinking Act.

“BP, we went through the process on the rules and regs in Colorado and in Wyoming and we support the states’ efforts and we think the states are the appropriate level to regulate those.”

A recent call by Republican state lawmakers to keep the EPA out of fracking regulation – no matter the conclusions of an ongoing study of the process by the federal agency – appears to run counter to mounting public sentiment that there needs to be more done to regulate oil and gas drilling as it relates to water use in what is essentially a very arid state.

COGCC officials this spring admitted to the Colorado Independent that enforcement of spill violations needs to be a top priority for the state agency, which has a backlog of investigations. Last week the COGCC announced the largest fine ever, hitting Williams with a record $423,300 penalty in the case of a De Beque man who chugged benzene-tainted water from his well.

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Ritter, at a bill signing ceremony in Breckenridge Thursday, enjoyed a little “I-told-you-so” moment as he touted the new rules and regs that favor environmental protections but have been blasted by the right as a job-killing conspiracy that has been the main driver in pushing the oil and gas industry out of the state (even though they never really left).

Rigs counts are down but permitting activity is ahead of surrounding Rocky Mountain states, and common sense would dictate the primary reason is the price of gas hovering around $4 per million British thermal units (MMBtu).

“It was a hard fight, but I stand here today feeling very good about having fought that fight,” Ritter said, according to FOX. “People are going to have a much more difficult time criticizing these rules because we’re being good stewards of the environment. The BP spill in the Gulf is the exclamation point on what happens when stewardship wanes, when it goes away. We didn’t do that, we were stewards. And, yes, it was a fight with the industry but it was a fight worth having for us because I can feel comfortable that we’ve got the right permitting process in place.”

Then this response from the right:

“I think that’s one of the most preposterous and reprehensible statements Ritter has made through his entire failed term as governor,” Colorado GOP chair Dick Wadhams said. “I’d like him to point to an accident or spill in Colorado comparable to the horrible spill in the Gulf. For him to try to justify his job-killing energy regulations by equating Colorado’s energy industry to what is going on with BP in the Gulf is a low standard even by Ritter’s low standards. This really shows why he’s going to go down as one of the most incompetent governor’s in the history of the state.”

True, it would be impossible to duplicate in a single event or spill the catastrophe enabled by eight years of Bush administration coziness with the oil and gas industry in the Gulf of Mexico. Natural gas drilling simply cannot spew as many toxins into the environment as a deepwater oil-drilling rig. But cumulative effects could add up to a Deepwater Horizon-type demise for the outdoor recreation, residential development, tourism, hunting and fishing and agriculture industries on the Western Slope.

The Colorado River, by all accounts, is greatly diminished in terms of water quality and quantity from all of the growing demands, and the energy sector is one of the most consumptive and potentially toxic.

There are two clear choices at the polls this November when it comes to balancing energy industry demands against all of the other aspects of Colorado that make it such a unique place to live and visit. Republicans want to roll back the clock to the Gov. Bill Owens days.

Democrats and Denver Mayor John Hickenlooper want to continue the more balanced approach Ritter has taken, which – credit where credit is due, FOX pointed out – included bolstering the state’s natural gas industry by creating local markets through the Clean Air Clean Jobs Act. Even the Dems know natural gas is the best possible bridge fuel to the “New Energy Economy.” They just want the drilling done right.

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The chemical makeup of proprietary fracking fluid is off limits even to emergency personnel (donnan.com)

Oxy, along with the Western Slope’s largest natural gas producer, Williams, has also been implicated in a 2008 spill that contaminated a spring near the cabin of Ned Prather in Garfield County, fouling his drinking water well and sending him to the hospital after he guzzled benzene. Both companies deny responsibility.

That case, along with a half a dozen other instances of water or soil contamination linked to drilling operations conducted by at least six different companies, remains unresolved, according to COGCC records. Some of the cases date back to 2007.

The COGCC earlier this month accepted the terms of the Oxy settlement, which included $390,000 for pit-leak contamination in the Cascade Canyon area and another $257,400 for a leak at Rock Springs. But the Prather case and several other high-profile spills remain unresolved, with no fines levied more than two years after they occurred.

Spills and unresolved cases

On Jan. 31, 2008, Marathon Oil reported a defect in a pit liner that caused the release of nearly 32,000 barrels of water that was “flow-back” from a hydrofracture job being stored in a reserve pit to be used in another “frack” job. The water, according to state documents, “infiltrated the subsurface, moved laterally, and discharged from a cliff above Garden Gulch” and into the Parachute Creek drainage.

That same month, Berry Petroleum reported a similar defective pit liner resulting in the release of an unknown quantity of drilling fluids into Garden Gulch. But the company hadn’t reported two previous spills that occurred earlier in 2008 and in November of 2007.

The Berry and Marathon cases were both reported by the Colorado Independent and other media outlets dating back to early 2008, and the incidents resulted in the COGCC reworking its regulations for pit liners on the Roan Plateau. But neither company has been fined.

“You’re right, some of [the cases] date back several years, and I don’t want to make excuses, that shouldn’t be the case,” said David Neslin, executive director of the COGCC, which is charged with permitting and regulating natural gas and oil drilling in Colorado. “We do need to do a better job at bringing timely enforcement matters, and we’re committed to doing so.”

Neslin said enforcement is the agency’s top priority for the remainder of 2010 and that he hopes to have some resolution on the Prather Springs case by mid-summer.

Deep underground detectives playing dodge ball

But while Marathon self-reported and Berry came clean after a third spill in the Garden Gulch area, no company has stepped forward to claim responsibility for the Prather Springs case. Investigators have narrowed it down to Oxy or Williams, but Neslin said multiple operators in one area contribute to delays in enforcement actions.

“These are really tough cases,” Neslin said. “You’re talking about what happened thousands of feet below the surface, and in some situations you have multiple operators or multiple facilities in an area, and so simply investigating and developing the case is difficult and very time-consuming.”

Leslie Robinson of the grassroots Grand Valley Citizens Alliance commended Oxy for coming forward in the Cascade Canyon and Rocks Springs cases, but said too many operators prefer to play “dodge ball” when it comes to admitting responsibility for spills.

“Although proof may obviously point to a company’s offense, they can claim ‘reasonable deniability’ about the event, making COGCC staff prove chemically that an XYZ frac waste or whatever contaminant actually came from a certain site,” Robinson said.

Trademark-guarded chemicals

“The big problem is frac chemicals are a secret and Colorado doesn’t believe in tagging wells, so it takes COGCC staff months, if not years, to shovel through layers of company lawyers, engineers and scientists to finally agree on what happened and what should be the financial settlement – if any.”

Both the Garfield County commissioners and Ned Prather have expressed dismay his case has taken so much time to resolve. The commissioners drafted a resolution rebuking the state for taking so long and Prather spoke to the Denver Post:

“I’ve always stuck up for oil and gas, but now when we need them to stand up and do what’s right, they won’t,” Prather told the paper last year. “If I was asked what has made me the maddest in all this, it’s the oil and gas commission not doing what they are supposed to do.”

The complexity of cases such as Prather Springs will continue to make enforcement a time-consuming process, Neslin said.

“We have a number of such cases, and so it’s partly a staffing issue – we only have so many environmental specialists and they can only do so much – and it’s partly the difficulty that these cases present, factually and scientifically and forensically,” Neslin added.

EnCana held the previous dubious record for the highest COGCC fine to date – $371,000 for a faulty concrete job that led to methane and benzene contaminating West Divide Creek near Silt. But state records show the company still has an unresolved violation involving improper reclamation of a waste pit dating back to September of 2007 and another violation for a pit spill in June of 2007.

Denver-based Antero Resources, which wants to drill up to 200 new wells in and around the Battlement Mesa community, was hit with a tank spill violation that “created an unsafe work environment” in December of 2007. But that case remains unresolved, according to the COGCC.

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Held up by proponents of proposed federal regulation of hydraulic fracturing, or fracking, as yet another example of potential environmental problems associated with the process, the Pennsylvania case has been portrayed as another warning sign in the ongoing natural gas boom in the Mid-Atlantic region’s Marcellus Shale formation.

In Colorado’s heavily drilled Garfield County, commissioners are weighing a resolution supporting federal legislation co-sponsored by Colorado Reps. Diana DeGette and Jared Polis that would remove a Safe Drinking Water Act exemption for fracking that was granted during the Bush administration in 2005.

While some Coloradans are concerned about water quality and wildlife habitat in the Rocky Mountains, opponents of the boom in the Marcellus Shale are worried New York City’s watershed may be compromised by fracking, which involves injecting water, sand and undisclosed chemicals into tight rock and sand formations to force out more natural gas.

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