Colorado Oil and Gas Setback Rules

Setbacks, the source of some of Colorado's most intense oil and gas exploration controversy, is expected to generate even more heat, as the majority on a panel that is reforming regulations prefers large buffers around well sites.

Homeowners, neighborhood and environmental groups, and some elected officials have urged the commission to consider significant setbacks from schools and houses, as high as 2.500 feet. Representatives from industry warn such significant losses would push up prices and significantly limit where businesses can drill.

Some acknowledged the conflicting interpretations of health studies and reports that experts and advocates on one side used to support larger setbacks and experts and advocates on the other said showed no credible evidence of harmful effects within a certain distance. He referred to a 2019 report by the Colorado Department of Public Health and Environment that outlined certain short-term health impacts for people living within 2,000 feet of fracking sites.

SB 181 is a major new rule-making process that will have a big impact on Colorado's oil and gas industry and the state economy. Six new upcoming regulations that intend to implement SB 181 and a number of other significant legislative changes.   The majority of the five-member panel said Wednesday they endorse setbacks of 2,000 feet, significantly larger than those proposed by commission staff, The Denver Post reports.

In response, the US Environmental Protection Agency (EPA) and the Colorado Oil and Gas Conservation Commission announced that they would extend strict reviews of permits to sites at least 1,000 feet from where oil or gas activity occurs. This means that the so-called "setback" rules for the state's oil and gas activities remain in place, which stipulates that there must be no more than a 10-foot setback from a site's natural gas or oil production site. The latest setback is part of the current setback rule, introduced by the Oil & Gas Conservation Commission in Colorado in 2013. It establishes a minimum distance of 3.5 meters from each site within a 1-mile radius of an oil/gas production area and a maximum distance of 2.1 kilometers. 

The report expressed concerns about the state's current law, which provides for a 500-foot retrograde for oil and gas wells, as well as potential impacts on wildlife and the environment.     The rule, still in draft form, would double the current minimum distance set by the Colorado Oil and Gas Conservation Commission in 2018 and has the potential to ban oil and gas drilling in more than half of the state, according to the industry that regulates it. The COGCC conducted a study of how the 500-foot blowback would affect Colorado's oil and gas industry and found that 90% of the state's surface areas would not be available for future oil or gas development. An estimated 54 percent of Colorado's surface, or 1.2 million acres, would be either inaccessible or "unavailable" for new oil/gas developments under the new rules if adopted, according to a report by the Colorado Department of Natural Resources. If adopted, the setbacks would also have a significant impact on the ability of states and municipalities to ban oil and gas drilling from multiple states.