County moves on oil and gas regs

With oil and gas well permitting applications poised to hit a three-year high, the Archuleta County planning commission approved revised regulations Nov. 12 they say should better safeguard area water resources, protect county roads and mitigate other drilling and resource extraction related impacts.

The regulations will go before the planning commission again for minor revisions Dec. 4, and then before the board of county commissioners for a pubic hearing and vote Dec. 9.

“This coming year, we’ll double the number of wells,” said Rick Bellis, director of the county’s development services department.

According to Colorado Oil and Gas Conservation Commission (COGCC) records, the agency approved eight drilling permits in 2007, and 44, thus far, in 2008.

With studies showing production declines in La Plata County, Bellis said, “Archuleta County is becoming ever more attractive to oil and gas extraction,” and he pointed to a number of other indicators — beyond drilling permits — that foreshadow an unprecedented blitz to extract energy resources in Archuleta County.

For example, mineral leases recently went up for bid in the Chromo area; a pipeline crossing the Southern Ute Reservation and running along Colo. 151 will soon link resources extracted in Archuleta County to New Mexico; the industry has expanded operations in the Arboles area and wildcat drillers have been active in Archuleta County, sinking test wells in a variety of unlikely places and, in some cases, operating under suspect permits.

“Out of state wildcatters are coming in and opening test wells, re-drilling others and doing it in a fly-by-night fashion,” Bellis said.

According to Colorado Oil and Gas Conservation Commission (COGCC) documents, wildcat operator, Alamosa Drilling, allegedly sunk a well with an unlined drill pit less than 50 feet from the Navajo River. During an on-site inspection, COGCC staff noted no attempt by the driller to manage stormwater, and “water was observed running onto, through and around the well site during the inspection. Surface water and groundwater may have been impacted,” according to the report.

With a verifiable increase in drilling-related activity within the county’s borders — including test wells sunk along the proposed 1.5 mile Fruitland Outcrop buffer zone — Bellis said there is also noticeable activity just beyond Archuleta County, and he described the staging of staff and equipment as akin to watching armies mass at a front.

“The gold rush is sitting on the border with either La Plata County or New Mexico,” Bellis said.

Although coal bed methane and oil —not gold — have become the target resource of energy companies, previous county regulations gave them no oversight over extraction operations on federal lands. Bellis said recent legal interpretations however have changed the regulatory landscape, thus encouraging counties across Colorado to adopt regulations that fill gaps left in state and federal requirements. Those gaps, Bellis said, lie chiefly in rules regarding land use and environmental concerns, and that is where local jurisdictions such as Archuleta County can flex their regulatory muscles.

For example, the county’s revised regulations create requirements for water testing and monitoring, fenced and lined drill pits with removal of the liner when drilling is complete, disclosure (under certain circumstances) of proprietary chemicals used in the drilling process, certain noise mitigation measures, a wildlife impact mitigation plan in environmentally sensitive areas, and requirements for road improvements and maintenance.

Bellis said commissioner approval of the regulations may soon be followed by a heavy equipment impact fee, which would also help mitigate the impacts to county roads caused by oil and gas trucks and traffic.

The revised rules coupled with the heavy equipment impact fee, positive relationships with San Juan Basin Health and COGCC staff, Bellis said can create a regulatory matrix with a series of local checks and balances that allow for the industry and county to reap the financial benefits of extraction while protecting the health, safety and welfare of Archuleta County residents.

The southwestern corner of Archuleta County sits on the northern edge of the San Juan Basin field — a 106,000 acre patchwork of public, private and tribal land that straddles Colorado and New Mexico and contains one of the nation’s richest deposits of natural gas. According to the Bureau of Land Management, the basin’s coal bed methane production exceeds that of any basin worldwide.