Line of Sight: Pipeline Law Alerts and Analysis

Colorado Governor John Hickenlooper’s compromise seems to have fueled the fire in the ongoing debate about fracking regulation, and more broadly about local versus state control. As noted in earlier posts, other groups including homebuilders join the oil and gas industry in its opposition to these measures.

Currently, 11 potential ballot measures are competing for interest-group money and Colorado voters. While some groups are looking to broadly ban fracking and other activities deemed unacceptable at the local government level, most are looking for more specific limitations on drilling.   A central issue in the measures is the distance permitted between drilling rigs and homes.  The state’s current regulations require a 500-foot buffer. Four of the proposals would increase setbacks for drilling rigs by distances from 1,500 feet to a half-mile–proposals that Hickenlooper recognizes would put the state’s economy at risk by eliminating almost 60% of drilling locations. Colorado has enjoyed an earlier economic recovery than many states in the union in large part because of the oil and gas industry.

Hickenlooper’s compromise attempts to find a middle ground but has effectively made no one happy. Although environmental groups argue the compromise proposal does not go far enough, his bill would permit local governments to enact health and safety standards more stringent than state rules, authorize local inspections of oil and gas sites, and authorize negotiation with operators for setbacks greater than 500 feet. While the “compromise” would allow drilling to continue, the measure imposes a level of uncertainty that could be untenable to companies as various measures imposed at the local level would likely trigger costly delays and legal appeals for companies.