Clock ticking on ‘local control’ special session

 
[dropcap]N[/dropcap]EGOTIATIONS continue in Denver between parties hoping to strike a deal and pass a state law that would give local communities more regulatory control over the oil-and-gas industry. Sources close to dealmakers say key legislators have been asked to clear their calendars for a three-day stretch beginning June 8 during which they’d be asked to hammer out a bill that a majority of lawmakers gathered for a special session of the state legislature could consider and pass.

Prospects for a special legislative session have seemed to rise and fall since the General Assembly officially ended three weeks ago. A frenzied effort to bring parties together on a compromise bill failed to gain traction and no bill emerged.

Officials say they have to pull the trigger soon on a special session before election-year momentum builds and the war machinery over hydraulic fracturing begins to whir at full speed.

Party primary elections are slated for June 24. General election campaign sniping over oil-and-gas regulations and jobs is sure to heat up directly after primary ballots have been cast. Legal briefs arguing for and against a series of controversial citizen ballot initiatives aimed at wresting regulatory control from the state over drilling are due at the Supreme Court next week. Arguments in a lawsuit pitting the state against Longmont over a city-wide fracking ban passed in 2012 begin in June. And large blocks of broadcast advertising time have been reserved already by oil-and-gas companies preparing for a full-bore messaging battle that will be waged for months before Election Day, November 4, if parties fail to strike a legislative deal.

A top priority

Governor John Hickenlooper is a former oil-industry geologist who has championed natural gas as a cleaner-burning “bridge fuel” to a renewable energy future and who for the last four years has overseen an historic gas-drilling boom in the state. He has made it a top priority to pass a bill but admittedly has struggled to win full buy-in from industry and business for plans that grant control to cities and counties to write noise and dust standards and establish minimum setback distances from housing for drilling operations.

The parties at the table notably are not seeking to grant local authorities the power to set their own environmental regulations on drilling. The strictest environmental standards designed to safeguard air and water quality would still be set by the state.

Hickenlooper says questions about when, where and how drillers can operate and who will negotiate competing property rights are the kind of complex matters better suited to legislative fixes written by lawmakers and their legal counselors than to single-subject yes-or-no ballot questions put to voters.

But Hickenlooper is responding to pressure applied by eleven initiatives submitted this year by residents fed up with state officials whom they see as powerless to do anything to stop drillers from overrunning their cities and towns. The initiatives are moving through the legal process at various stages. The Supreme Court last Thursday approved Initiative 75, backed by the Colorado Community Rights Network, over objections that its vague wording would give rise to crippling restrictions on industry and business.

Initiative proponents must submit 86,105 valid resident signatures in support of their proposal to the secretary of state’s office by August 6 to make the ballot. Most observers believe at least one or two local control initiatives will appear on Colorado voter ballots this fall.

Over the last half-decade, drilling operations have spread from mostly rural areas of the state across the populated area north of Denver to the Wyoming border. Well pads with rows of oil and toxic flow-back-fluid storage drums have been built next to schools and playgrounds. Industry eighteen-wheelers plow through suburban subdivisions. Fires and explosions and spills have shaken communities across the northern Front Range and highlighted the inadequacy of local emergency responder teams unprepared for the boom.

Getting attention

The urgency to pass a compromise local control bill in Denver escalated when wealthy Congressman Jared Polis jumped into the fray. Polis is a Boulder Democrat who represents four of the five Front Range cities that have passed moratoriums and bans on drilling over the last few elections. Polis sued last year when drillers set up an illegal work site across from his own Weld County property. This spring, he commissioned RBI Strategies, a top Colorado politics consulting firm, to join the grassroots ballot initiative movement already underway by quickly filing a series of its own initiatives aimed at increasing drilling setbacks from residential property and granting more zoning rights to city and county authorities.

The grassroots efforts lacked any obvious funding source. But the legal power, advertising might and petition gathering energy Polis clearly has already bankrolled and is prepared to continue bankrolling drew the attention of lawmakers and the Governor.

Hickenlooper won’t call a special legislative session unless he has a proposal to submit to lawmakers that the main parties to the negotiations — including Polis’s RBI consultants, oil industry representatives, members of the housing construction industry and state business community — have agreed to accept. The Governor and House Speaker Mark Ferrandino three weeks ago put the odds of reaching such a deal at 50-50. Key negotiators say the odds haven’t improved.

The administration has held four sit-down meetings, participants have told The Independent. They say draft proposals for a law spelling out local and state regulatory powers have narrowed in significant ways but that tension and uncertainty remain high.

That tension and uncertainty — the fragility of the compromises in the works — have led most sources to ask for anonymity when talking to the news media.

“There are a lot of gears turning right now,” said a top state official.

“There are a lot of balls in the air,” said a capitol staffer.

An advisor to parties in the talks said he was going to have to play like Sergeant Schultz from 1960s television series Hogan’s Heroes. “For the record,” he said. “I know nothing. I’ve seen nothing.”

Splits

From all accounts, the drilling industry seems split on the proposals being floated, presenting a major hitch in the talks.

Big oil-and-gas corporations that have much at stake on the national level but little investment specifically in Colorado see this election year in Colorado as the time and place to take a stand against any encroachment on drilling rights. If local control comes to trump state control in Colorado, citizens in other heavily drilled states like California, Pennsylvania and North Dakota may succeed in passing similar laws.

But Companies working here and employing thousands of Coloradans see a deal in Denver as the best way to head off the ballot initiative momentum. In recent years, as voters in local communities have passed drilling bans and moratoriums, those companies have seen the “social contract” that has allowed them to operate with little restriction for decades begin to erode. They would prefer to be at the table and help draft solid rules that will establish the playing field for years to come.

Negotiators say there are also regional splits among drillers. Companies operating in more oil-friendly, less-populated areas on the Western Slope, for example, may be willing to roll the dice with the ballot initiatives and accept more local control. Companies on the Front Range would rather strike a deal with the state than operate under regulations imposed by urban and suburban voters.

Encana, for example, engages in a fraught dance with Boulder County, a well-populated and environmentally conscious part of the state that has pushed back hard against drilling. The city passed a five-year moratorium on hydraulic fracturing last November. British Petroleum, on the other hand,
has a well-established agreement with La Plata County and Durango, where resident attitudes and geography make extraction less intrusive.

Unloved in the gas patch

Meantime, the grassroots gas-patch groups that have supported local bans on drilling say no one has consulted them on the proposals being worked up in Denver.

On Wednesday, eleven groups submitted a “media statement” to Hickenlooper demanding a seat at the table.

[blockquote] [M]eetings have been widely reported in Colorado newspapers… in which reporters have stated that oil and gas industry executives and other stakeholders have been in attendance. But, none of the citizen and environmental groups that actually moved the moratoriums and bans forward in the last 18 months — in six cities with over 400,000 citizens including Fort Collins, Loveland (pending), Longmont, Boulder, Broomfield, and Lafayette — have even known about the meetings, let alone been invited to attend. [/blockquote]

The statement was sent by Our Longmont, Our Broomfield, Citizens for a Healthy Fort Collins, What the Frack?, Be The Change, The Garfield Transparency Project, Food and Water Watch, The Mother’s Project, 350 Colorado, Protect Our Loveland and Frack Free Colorado.

Sam Schabacker, Food and Water Watch director, echoed sentiments shared widely among activists on the northern front range, who look upon the negotiations in Denver with a gimlet eye.

“What I’ve seen so far, it looks like it will just codify the status quo and take away the constitutional right of citizens to protect themselves from the adverse effects of fracking,” he said.

“Look at the setting at which these negotiations are being held — the antiseptic capitol far from the dust and fumes and noise of the drill sites. The capitol is the arena where the oil and gas industry wins,” he said, noting that industry lobbyists last year succeeded in killing all 14 bills that would have provided more regulatory control and this year almost succeeded in passing an eminent domain bill that would have allowed companies to take land from property owners at cut rates to lay pipelines.

“We feel like we’re going to be sold out in Denver,” Schabacker said. “There are more oil-industry lobbyists than there are drilling inspectors* in the state… They’ll come to a deal soon and herald it as a great success. But it will put in statute laws that residents in the five cities have already voted against.”

*Correction: An earlier version of this post wrote the word “regulators” where Sam Schabacker said “inspectors.”