HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/25/2013 - OIL AND GAS REGULATIONS FOLLOW UPDATE: June 25, 2013
STAFF: Laurie Kadrich
Dan Weinheimer
Pre-taped staff presentation: none
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Oil and Gas Regulations Follow Up.
EXECUTIVE SUMMARY
Council requested staff follow up on a number of issues raised regarding oil and gas regulations,
including the preparation of an extension of Ordinance No. 145, 2012. Ordinance No. 145, 2012
established a Moratorium on the acceptance or processing of land use applications, permit
applications, and other applications seeking approval to conduct Oil and Gas Extraction or related
operations within the city or on City-owned lands. Council further requested a detailed analysis of
the Operator Agreement approved with Prospect Energy to determine where local requirements
exceed state or federal guidelines. Council asked for a timeline to be developed outlining the
Initiative process started by “Citizens for a Healthy Fort Collins”.
The purpose of this work session is to discuss whether Council supports a formal consideration to
extend Ordinance No. 145, 2012, and if so, which option(s) should be prepared for a Council
meeting. An additional purpose is to consider what, if any, additional monitoring and/or inspections
are needed, now that an Operator Agreement has been approved with Prospect Energy.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council support formal consideration to extend Ordinance No. 145, 2012? If so, which
option(s) should staff prepare for a Council meeting?
2. Does the Council support moving ahead with any of the monitoring and/or added inspection
options? If so, should staff prepare a more detailed scope of work and budget for those
options?
BACKGROUND / DISCUSSION
PART ONE
Moratorium Discussion
Council requested that staff prepare an extension of Ordinance No. 145, 2012. Staff suggests the
following two options be considered:
June 25, 2013 Page 2
• Option #1
Extend the moratorium by five (5) to seven (7) years and apply the extension to Prospect Energy in
order to better determine the potential health impacts of various aspects of oil and gas operations.
Exclude City-owned lands outside the City limits.
• Option #2
Extend the moratorium to December 31, 2013 in order to re-evaluate Land Use Code (LUC)
changes, engage the community in the LUC options, and codify any recommendations. Exclude
City-owned lands outside the City limits.
Note: If neither option is selected, the moratorium will expire July 31, 2013 at midnight. However,
the City Code prohibiting hydraulic fracturing would still be in place so any new drilling
activity (except for Prospect Energy) would need to secure an operator agreement with the
city due to the likelihood that hydraulic fracturing would be used in the drilling process.
Much work has been completed in developing appropriate regulations to minimize any adverse
impacts that oil and gas exploration and extraction may have on the health, safety, and welfare of
the City and its citizens including the following:
• Staff testimony was given to the Colorado Oil and Gas Conservation Commission (COGCC)
rule-making process, resulting in greater set-backs from residential areas and water quality
monitoring and sampling requirements. While the water quality rules went into effect in
May, the setback rules are effective August 1, 2013 and can now be incorporated into Land
Use Code amendments.
• Local regulations were adopted by Council to prohibit the use hydraulic fracturing in the
City limits and the permanent storage of waste products associated with hydraulic fracturing.
• Extensive research into best management practices was incorporated into an operator
agreement with the only local operator (Prospect Energy), resulting in greater health and
safety protections for the residents of Fort Collins.
• Staff is addressing citizen concerns by preparing a draft Ordinance for Council
consideration, scheduled for the July 2, 2013 meeting, to enact reciprocal set-backs and
buffering requirements for proposed residential developments in close proximity to existing
oil and gas operation. The proposed Ordinance also contains disclosure, fencing and
screening requirements.
• Additional work is needed to incorporate the best management practices, updated COGCC
regulations and other research into zoning and land use regulations.
Part Two of this staff report provides a more detailed update of the work requested by Council
during the time of the moratorium and the work completed.
June 25, 2013 Page 3
Monitoring and Inspection Discussion
1. Staff suggests that if additional monitoring and inspection are implemented it be done in
stages. The first stage should be limited to the Fort Collins Field since that is where current
production is and where expansion is likely to occur first. Staff provides the following
options (see Attachment 1 for details) for consideration in the Fort Collins Field either
separately or in combination:
• Site assessment for water and air quality to establish current conditions
N Estimated cost: $35,000
• Short or long-term air quality monitoring
N Short-term estimated cost: $150,000 initial; $50,000 annually
N Long-term estimated cost: $200,000-500,000 initial; $75,000-200,000
annually
• A review of waste management practices
N Estimated cost: $10,000-$15,000
• An inspection of the existing field for compliance with the Operator Agreement.
N Estimated cost: $5,000-$10,000
• A third party contractor be placed on “retainer” to act as the City’s representative for
the following:
a. Visiting the site when the operator voluntarily calls to allow
observation of certain activities;
b. Accompany state inspectors on routine inspections;
c. Be the City’s on-site representative for any emergence response
actions.
N Estimated cost: $200-500 per hour; costs for four (4) annual inspections
would be $8,000 to $20,000.
2. Council directed staff to complete a thorough comparison of Prospect Energy’s Operator
Agreement with state and federal regulations and/or guidelines to determine which Best
Management Practices (BMPs) required by the Agreement meet or exceed other agencies
requirements. The agreement contains forty-eight (48) general BMP requirements and
exceeds state and federal guidelines in fifty-nine (59) areas. Twenty-two (22) of the
guidelines that exceeded are in air quality standards. See Attachment 2 for details.
Citizens for a Healthy Fort Collins timeline
Council further directed staff to prepare a timeline for the effort by “Citizens for Healthy Fort
Collins” – see Attachment 3, prepared by the City Clerk’s office.
June 25, 2013 Page 4
PART TWO
On December 18, 2012, Council adopted Ordinance No. 145, 2012, requesting staff to complete the
work outlined below during the moratorium. The following is a summary of the work completed
thus far.
City Council direction for additional work during moratorium
1. Monitor the Colorado Oil and Gas Conservation Commission’s rulemaking process,
as described above. Present City Council recommendations during the rulemaking
process. Incorporate, as needed, any changes into proposed Land Use Code (LUC)
amendments.
Results
Council’s recommendations were presented, although not adopted, (see details below).
The Land Use Code (LUC) amendments are not completed. After nearly a year of stakeholder
meetings, the Colorado Oil and Gas Conservation Commission (COGCC) undertook rulemaking
hearings on groundwater quality sampling and setbacks from November 2012 through January 2013.
Fort Collins established party status for both rulemaking topics and submitted comments and
testimony during the development of the new rules.
The setback proceedings culminated with implementation of several measures aimed at mitigating
the conflicts between oil and gas encroaching into more urban parts of Colorado. Among the steps
taken was extending the distance a new well can be from a home, requiring meetings with affected
property owners, giving local governments the option to have more time to comment on permit
applications, and inclusion of nuisance mitigation measures. The COGCC implemented a uniform
statewide standard of a 500 foot buffer between new oil and gas wells and existing homes. COGCC
also established a 1,000-foot buffer zone where additional standards apply to any operator trying to
drill within 1,000 feet from an existing home. Within this zone, operators must first appear for a
hearing before the COGCC. Operators also must engage in expanded outreach efforts with nearby
residents and take enhanced measures to minimize disruptions for all structures near a drilling rig.
The setback rules go into effect August 1, 2013.
Water sampling rules went into effect May 1, 2013 and require operators to sample up to four water
wells within a half mile of a new oil and natural gas well prior to drilling, take two more samples
each between six and 12 months of drilling, and conduct additional sampling five to six years after
drilling has been completed.
2. Monitor COGCC and present City Council recommendations to any relevant bills
considered during the 2013 State of Colorado Legislative Session, especially as any
further legislation is considered related to air or water quality.
Results
During the 2013 General Assembly session, at least ten bills were introduced that would have
increased regulations on the oil and gas industry. Only two of these bills were approved by the
Assembly and signed into law by the Governor. The requirements of these bills are as follows:
June 25, 2013 Page 5
• HB13-1278 - Requires operators to notify state regulators and communities when there are
spills of at least one (1) barrel of liquid. The prior threshold for reporting was five (5) barrels
spilled.
• SB13-202 - Directs the Colorado Oil and Gas Conservation Commission to develop a plan
for risk-based inspections and to then pilot this strategy. A risk-based inspection regime
would focus regulatory efforts on processes or operations that carry the most risk of a spill
or hazard.
3. Develop maps that address the following:
• Identify the geological formations present within the City and the Growth Management
Area.
• Identify the locations of oil and shale gas deposits including the various formations
• Map the locations of all wells within those areas and locations currently seeking permits to
drill and include mineral ownership information where available.
• Visually extend the setback criteria into the Growth Management Area.
• Identify areas currently exempt from drilling, and areas that would be exempt if additional
setback criteria were adopted by the COGCC.
Results
Partially completed. Staff found that the State Geologist and other publicly available maps did not
include the area near Fort Collins. Experts at Colorado State University explained this discrepancy
was because of the low likelihood of oil and gas activity in or immediately adjacent to Fort Collins.
4. Evaluate the impact of proposed regulations on existing and future oil and gas
operations and consider code amendments as needed for addressing the differences in
oil extraction compared to gas or methane production. Staff should specifically
consider whether soil gas testing is needed for both.
Results
Not completed.
5. Update the Best Practice Matrix dated August 27, 2012 to include LUC Option A and
B as well as more specific information on street maintenance, financial consequences,
local impact fee, cultural resources, reclamation, and water source disclosure.
Results
Completed.
6. Propose an intergovernmental agreement with Larimer County that ensures any oil
and gas activity within the GMA would be considered new development and as such
annexed into the city and permitted under the city’s development process.
June 25, 2013 Page 6
Results
Provided Larimer County with a copy of the approved Operator Agreement and invited further
discussion regarding implementation.
7. Negotiate and present a proposal for adopting an operator agreement with Prospect
Energy, the owner and operator of the Fort Collins Field.
Results
Completed.
8. Re-engage the boards and stakeholder groups and seek their recommendations
regarding the proposed LUC amendments (Option A or B).
Results:
Not completed.
9. Provide additional information regarding surface use agreements, especially as the
agreement relates to habitat fragmentation and restoration; include examples.
Results
The Natural Areas Department is developing a model surface use agreement that includes strict
requirements relating to habitat fragmentation and restoration.
10. Identify areas that may be considered for a Designated Outside Activity Area, and have
setbacks from oil and gas activities in alignment with High Density Area setbacks.
Results
None identified under current COGCC definitions.
ATTACHMENTS
1. Monitoring and Inspection details
2. Operator Agreement Comparison Graph; State & Federal
3. Timeline for “Citizens for a Healthy Fort Collins”
4. Powerpoint presentation
6/12/2013
Assessment and Inspection of Oil and Gas Operations in Fort Collins
I. Fort Collins Field
Task 1 – Baseline site assessment and initial inspection of Prospect Energy’s existing
operations in the Fort Collins Field
Description: The first part of this task involves the City conducting actual sampling of
environmental parameters to determine if they have been impacted by present or past
activity at existing well pad sites located within city limits. The second part of this task
includes an initial inspection of Prospect Energy’s operations at these sites to determine
compliance with the conditions of the Operator Agreement. The City may find it difficult
to find contractors willing to perform compliance inspection services due to conflicts of
interest with other clients.
a. Water Quality and Waste Management: There are 2 parts to this task that
require different types of technical expertise from a qualified consultant.
i. Part 1 - assesses actual groundwater conditions and involves a
comprehensive review of site hydrogeology and selection of 8 existing
groundwater wells for sampling of the COGCC Rule 609 parameters plus
dissolved metals. The advantage of this approach is that relevant data on
actual site conditions is gathered and analyzed and is available for public
dissemination. In addition to complying with industry best practices for
groundwater sampling, this task would include a data quality review and a
final report of investigation results and is estimated to cost $25,000. It is
not likely that there will be conflict of interest issues associated with a
contractor providing these services.
ii. Part 2 - assesses waste management practices and involves selecting a
consultant with RCRA inspection experience of oil and gas sites and
familiarity with COGCC rules and the local Operator Agreement. A rough
estimate of costs is from $10,000 to $15,000 for one inspection. It would
also be beneficial to ensure the inspections are acceptable to COGCC if
enforcement actions are required. Initial industry inquiries suggest this
will present a conflict of interest for many contractors.
b. Air Quality: Baseline assessment and initial inspection of oil and gas operations
within city limits involves sampling, visiting the sites, and reviewing pertinent
documents.
i. Part 1 - A baseline assessment of air quality could include a review and
analysis of existing air monitoring data within the vicinity to determine
background air quality conditions. It could also include a range of air
sampling and monitoring methods from representative grab samples with
during specific activities to longer term or continuous monitoring with
ATTACHMENT 1
2
6/12/2013
stationary, portable, or mobile sites located near residences around oil and
gas well pad sites. Other considerations include conducting a short-term
fence line monitoring study for VOCs and HAPs, or participating in the
Front Range study being conducted by CSU. Estimated costs for this part
range from $10,000 to $250,000 depending on the goals and objectives of
the monitoring. Please see Attachment A – Air Monitoring Options for
more information.
ii. Part 2 – An initial inspection of existing operations with regard to air
quality would involve selecting a contractor with knowledge of state and
federal air quality regulation and permitting requirements, familiarity with
the air quality provisions of the Operator Agreement, and expertise in air
pollution control for the oil and gas industry. The inspection would
include both onsite observation of operations and equipment and review of
applicable permits to determine the status of compliance with provisions
related to air quality. The cost of an initial inspection could range from
$5,000 - $10,000.
c. Other Areas for Site Assessment and Inspection: The operator agreement
includes requirements for best management practices in several areas in addition
to air and water. Initial assessment and inspection of the following areas should
be included in this task, and will likely add to the costs described above:
i. Cultural and Historic Resources
ii. Emergency Preparedness
iii. Natural Resources
iv. Noise
v. Pipelines and Flowlines
vi. Transportation and Circulation
vii. Weed Control, reclamation, rehabilitation
viii. Visual and Access control – fencing, screening, color
Task 2 – Contractor services for City representation at site visits, inspections and
emergency responses in the Fort Collins Field
Description: This task includes procuring contractor services to perform the following
services on behalf of the City. The City will need to develop a scope of work and a
request for proposal and provide budget support for this task. Costs for the tasks below
will likely be based on an hourly rate and may range from $200 to $500 per hour (or
based on a negotiated per visit charge). Initial industry inquiries indicate that the City
may find it difficult to find contractors willing to perform compliance inspection services
or serve as the City’s representative due to conflicts of interest with other clients.
Represent the City at visits to oil and gas well pad sites to observe operations
as voluntarily requested by the Operator,
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6/12/2013
Accompany state agency (COGCC and CDPHE) and Larimer County
Department of Health staff on routine inspections at well pad sites in the Fort
Collins Field,
Represent the City at any emergency response actions on well pad sites in the
Fort Collins Field
Provide technical expertise to the City in the following areas:
a. Water Quality: Familiarity with federal, state, and local regulations
(e.g., Operator Agreement) regarding water quality protection. Oil and gas
industry experience and expertise in groundwater and soil gas sampling
procedures, laboratory methods, and hydrogeology are required.
b. Waste Management: Familiarity with federal, state, and local
regulations (e.g., Operator Agreement) regarding waste management. Oil
and gas industry experience and RCRA inspection expertise required.
c. Air Quality: Expertise in air quality requirements for the oil and gas
sector, FLIR camera certification, ability to conduct SUMA canister air
sampling and other methods for air monitoring.
II. Undeveloped Area (UDA)
Task 3 – Baseline site assessment and initial inspection of Prospect Energy’s future
development and operations in the UDA
a. Water Quality: This task involves hiring a qualified consultant to provide
oversight of the Operators’ baseline sampling of groundwater at new well locations. It
involves conducting a permit review, providing oversight of field sampling
procedures, conducting a data quality review of laboratory results, and providing a
report that summarizes the Operator’s compliance with Rule 609 and Operator
Agreement requirements. The estimated combined costs for tasks a. and b. of this
section are $8,000.
b. Waste Management: Oversight of compliance with state and local (Operator
Agreement) requirements for waste management are primarily preventive in nature
when a new oil and gas site is first constructed and begins production. This task
would involve hiring a qualified consultant to complete the following tasks:
i. Evaluate applicant compliance with USEPA SPCC Regulations @ 40
CFR 112.
ii. Evaluate Applicant compliance with Oversight of Applicant/City
requirements for spill control.
iii. Provide initial report on spill control compliance.
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6/12/2013
The estimated combined costs for tasks a. and b. of this section are $8,000.
c. Air Quality: This task is essentially the same as that described under Task 1 part
b. Please see Attachment A for additional air monitoring recommendations.
Task 4 – Contractor services for City representation at site visits, inspections and emergency
responses for future development in the UDA
This task is essentially the same as Task 2, except that it applies to the UDA and includes
additional air monitoring.
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Attachment A – Air Monitoring Options
A variety of ambient air quality monitoring equipment and methods are available for measuring
air pollutants from inexpensive grab samplers and portable equipment that can measure
pollutants from a specific activity or a particular point in time to sophisticated systems that meet
federal reference methods and can provide continuous measurements. The selection of air
monitoring equipment and methods at or near oil and gas operations is highly dependent on the
goals and objectives of the air monitoring study and the ultimate end use of the data. The costs
are also dependent on the type and number of pollutants to be measured and the method of
analyzing the sample. Examples of air monitoring and sampling systems with typical costs and
purposes are described below.
This is not intended to be an exhaustive list of all air monitoring systems available that could be
deployed at oil and gas development sites, but rather provides a cursory examination of the range
of available system and typical costs and purposes.
Episodic Monitoring
Purpose: The purpose of this type of monitoring is to gather immediate or short term data with
which to make decisions regarding worker exposure, emergency response, or evacuations. This
type of monitoring can also be useful for determining the types and concentrations of pollutants
emitted during a specific event or activity. This equipment can also be used to detect leaks and
effectiveness of control equipment. An example of this type of monitoring for oil and gas
activities within Fort Collins would include deployment of SUMA canisters and hand held
hydrogen sulfide monitors during a well completion that lasts for 7 days.
Limitations: The data obtained from this type of monitoring is not typically used for
determining impacts to human health from long term exposures or risk assessments. It is also
not typically used in long term trend analyses or air modeling studies.
Equipment: Equipment used for this purpose includes vacuum canisters, hand held monitors,
grab sampling bags, and personal monitors.
Costs: Costs are provided for an example scenario at and oil and gas well pad site that involves
measuring hydrogen sulfide and up to six organic compounds using SUMA canisters and hand
held monitors for a 7-day well completion event: $5,000 - $10,000
Short-term Monitoring
Purpose: The purpose of this type of monitoring is to assess the types, sources, and
concentrations of air pollutants in an area over a defined period of time such as a season, quarter,
or year. A system of portable or mobile monitors can be deployed around a study area to measure
concentrations of air pollutants. The data can be used to determine which pollutants may be
emitted at levels of concern, where the location of highest impact may be, and depending on the
methodology used can be used in health impact assessments.
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6/12/2013
Limitations: Depending on the methodology used, this system may not be appropriate for
determining compliance with emission standards or for long term trends, risk assessments, or
modeling studies.
Equipment: Typically, a monitoring system is designed for this purpose that includes
meteorological monitoring equipment as well as portable or mobile air monitors for specific
pollutants. An example of a system that might be appropriate near oil and gas activities in Fort
Collins would include:
Multiple portable monitoring stations equipped with hydrogen sulfide sensors
methane/non‐methane detectors at each station that could trigger deployment of a SUMA
canister at high non‐methane concentrations
Meteorological equipment that includes wind speed and direction
Real time reporting of data to a publicly accessible web based viewing system
Costs: Estimated costs for a system that could be deployed around the Fort Collins field with up
to three stations as described above: initial cost = $150,000, annual operation and analysis cost =
$50,000
Continuous Long-term Monitoring
Purpose: This type of monitoring provides continuous monitoring data over a long period of
time typically 3 or more years. This is typically used for regulatory compliance with emission
standards and ambient air quality standards. Depending on the methodology used, the data can
be used in modeling and human health risk assessment studies. The data can be used for long
term trends analyses and for determining the effectiveness of air quality improvement strategies.
Limitations: This type of system can be cost prohibitive for some purposes and requires
significant operation and maintenance investment. Some systems require certified operators,
calibration equipment and procedures, and sophisticated sample and data analysis.
Equipment: A range of stationary and mobile systems are available for this purpose. Systems
include stationary monitors that comply with federal reference methods, compact air monitoring
stations, and light emitting fence-line monitoring systems. These are typically multi-pollutant
monitoring systems that include meteorological monitoring and can measure criteria pollutants,
hazardous air pollutants, and a range of volatile organics in real time. This type of system may
be appropriate for the City to consider around the undeveloped area (UDA) to establish baseline
concentrations of potential air pollutants of concern and long term trends in concentrations
during development of that field. This system could also be useful in determining contributions
from other sources of air pollutants such as major industrial sources and oil and gas activities in
Weld County during certain meteorological events.
Costs: Estimated costs for a stationary monitoring system to assess regional concentrations of air
pollutants of concern including ozone and some hydrocarbons around the UDA: initial costs =
$200,000 - $500,000, annual operation and analysis costs = $75,000 - $200,000.
ATTACHMENT 2
Attachment #2
Oil and Gas Operations
Comparison Table – Operator Agreement compared with Federal and State Regulations
Updated June 11, 2013
Note: This comparison matrix only highlights the requirements set forth in the operator agreement with Prospect Energy. Additional federal
and state regulations apply to their operation. More information, and available resources, can be found at the City’s Oil and Gas Website at
www.fcgov.com/oilandgas.
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
1. Regulations
Requires that most stringent state or federal
regulations apply.
N/A Meets
2. Setbacks for new wells
Must meet the COGCC requirements for
setbacks; in the UDA, a minimum setback of
1,000’ is required on the south and west
borders.
N/A Exceeds Resource Conservation
and Recovery Act (RCRA),
Safe Drinking Water Act
(SDWA), and Clean Water
Act (CWA) all include siting
requirements that protect
water bodies.
Statewide uniform setback – 500’ from
building units; 1,000’ from institutional
buildings
3. Conceptual Review
Requires pre‐submittal meeting with City staff
at least 30 days prior to entering state
permitting process.
N/A Exceeds Not applicable because
this is a local requirement.
Not applicable
4. Mailed Notice
Requires notification of surface owner, all
landowners within ½ mile of the operation,
neighborhood organizations and anyone within
500’ of a proposed gathering line.
N/A Exceeds No equivalent regulation Requires notification to surface owners
within 500’ of the proposed operation
5. Posted Notice
Requires a sign be posted on the property.
N/A Exceeds No equivalent regulation No equivalent regulation
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 2
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
6. Neighborhood Meetings
Must be conducted in accordance with City
standards.
N/A Exceeds No equivalent regulation If an operation is proposed within 1,000 feet
of a building the operator must meet with
anyone who asks.
7. Notification to the City and the public
regarding commencement of operations
N/A Exceeds No equivalent regulation Operators must notify emergency dispatch
and the Local Government Designee (LGD) in
the case of flaring.
8. Inspections
Added requirement that the City inspect the
operation at any time, with 24 hours advanced
notice (see also Emergency Response section).
N/A Exceeds RCRA, SDWA, CWA
establish environmental
protection requirements.
COGCC and Colorado Department of Public
Health and Environment (CDPHE) conduct
compliance inspections and enforcement
under state rules that meet federal
regulations.
9. Containment Berms
Requires steel‐rim berms around all tanks and
separators that must be lined. Tertiary
containment is required when within 500’ up‐
gradient of a surface water body.
N/A Exceeds RCRA sets secondary
containment requirements
for storage vessels.
Requires new wells to have steel‐rim berms
and secondary containment liner within five
hundred (500) feet of building units after
August 1.
10. Closed Loop Pitless Systems
No pits are allowed.
N/A Exceeds Pits regulated under RCRA Pits allowed under Rule 902
Pits not allowed if VOC emissions >5
tons/year and located within 1,320’ of
building unit under Rule 805.b.(2).C
11. Anchoring
Requires anchoring of equipment. At new
wells, guy lines must be identified with a bright
color and be in certain locations.
Exceeds Exceeds No equivalent regulation Only requires anchoring in sensitive areas,
e.g., in geologic hazards and floodplains (Rule
603).
12. Burning
No open burning.
Meets Meets No equivalent regulation Burning may be allowed but must comply
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 3
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
14. Chemical Disclosure and Storage
Requires uploading of chemicals to Frac Focus
and no permanent storage.
N/A Exceeds RCRA requires chemical
disclosure and
maintenance of MSDS on
site.
State requires chemicals to be uploaded to
Frac Focus (www.fracfocus.org) for public
disclosure on any new well that uses
hydraulic fracturing.
15. Color
Requires facilities to blend with the
surrounding landscape. Applies to existing
wells when repainting occurs.
Exceeds Meets No equivalent regulation COGCC has the same regulation as the City.
16. Cultural and Historical Resource Protection
Must report discovery of a resource and
mitigate any disturbances.
N/A Exceeds Without federal funding or
federal permits, no
equivalent regulation is
known to staff.
No equivalent regulation
17. Discharge valves
Requires open‐ended discharge valves on all
tanks, pipelines and containers to be secured
when a site is unattended or accessible to the
public.
N/A Exceeds RCRA includes closed
container regulations.
State enforces federal requirements for
closed container requirements.
18. Dust Suppression
Produced water cannot be used for dust
suppression; must avoid suppression within
300’ of a waterbody unless the suppressant is
water.
Exceeds Exceeds Produced water not
classified as hazardous
waste so could be used for
dust suppression if
allowed by the state.
Allowed under 900 series Rules
19. Electric equipment
The City stresses the use of Electric Equipment
at all sites; the state specifies a certain distance
at which additional measures must be taken.
Meets Meets No equivalent regulation
known to staff
Oil and Gas Facilities with engines or motors
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 4
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
20. Emergency Preparedness Plan
Requires contact information, notification,
training, risk assessments, response plans, and
outreach to surrounding neighbors.
Exceeds Exceeds Similar standards to what
is proposed, but additional
community engagement in
the Operator Agreement.
Similar standards that are used at the federal
level are employed at the State level.
21. Air Quality
(See below)
21.a General Duty to Minimize Emissions N/A Exceeds No equivalent regulation No equivalent regulation
21.b High‐Low Pressure Vapor Recovery Unit
(HLP‐VRU) on new wells in the UDA
Recovers methane and other production gases.
N/A Exceeds No equivalent regulation No equivalent regulation
21.d No uncontrolled venting of methane
No uncontrolled venting regardless of well
type.
N/A Exceeds 40 CFR Part 60 Subpart
OOOO with exceptions for
safety and feasibility for
natural gas wells
CDPHE Regulation No. 6 Part A
21.d All gas vapors shall be captured to the extent
feasible
N/A Exceeds No equivalent regulation No equivalent regulation
21.d Vapor capture equipment shall operate at
98% efficiency or greater
N/A Exceeds 40 CFR Part 60 Subpart
OOOO requires 95% on
some equipment at
natural gas wells
CDPHE Rule 805.b(2) and CDPHE Reg. 7
requires 90‐95% control depending on
equipment type and uncontrolled emissions
21.e Capture and beneficial use of natural gas is
preferred over flaring
N/A Exceeds No equivalent regulation No equivalent regulation
21.e Flaring shall be continuously monitored N/A Exceeds 40 CFR 60.18(f) No equivalent regulation
21.e No venting of gas may occur except under
COGCC Rule 805(B)(3)(b) or Rule 912
N/A Meets No equivalent regulation COGCC Rule 805 and Rule 912 allow venting
for safety and emergencies
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 5
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
21.f.1 Flare shall be operated with natural gas N/A Exceeds No equivalent regulation No equivalent regulation
21.f.1 Flare shall be operated with 98% or high
Volatile Organic Compound (VOC) destruction
efficiency (DE)
N/A Exceeds 40 CFR Part 60 Subpart
OOOO requires 95% on
some equipment at
natural gas wells.
COGCC requires 90‐95% control required
depending on the source
21.f.2 Flare shall be designed and operated in
compliance with 40 CFR 60.18(f) and CDPHE
Reg. 7 Section XVIIB
N/A Meets Complies with EPA Federal
regulation
Complies with CDPHE regulation
21.f.3 The flare shall be operated with a flame
present at all times when emissions may be
vented to it, pursuant to the methods
specified in 40 CFR 60.18(f).
N/A Meets Complies with EPA Federal
regulation 40 CFR 60.18
Complies with CDPHE Reg. 7 Section
XVII.B.1.c
21.f.4 Ignition Systems.
An automatic pilot system shall be used when
feasible. Other ignition systems may include
the installation and operation of a telemetry
alarm system or an on‐site visible indicator
showing proper function.
N/A Exceeds No equivalent regulation CDPHE Reg. 7 Section XVII.B.1.c requires no
visible emissions and observation of proper
function
21.g Leak Detection and Repair (LDAR)
Requires a LDAR program according to EPA
Method 21. LDAR shall be performed on newly
installed equipment, and then on an annual
basis.
N/A Exceeds EPA 40 CFR Part Subpart
Vva – LDAR Requirements
for several industries that
emit VOCs
COGCC Rule 604.c.(2).f – leak detection plan
required if within designated setback location
21.g A Forward‐Looking Infrared (FLIR) camera
shall be used as the preferred implementation
method of EPA Method 21 as available from
the state; if unavailable, other methods shall be
used in compliance with this method.
N/A Exceeds EPA Method 21 40 – CFR
Part 60, Appendix A‐7 and
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 6
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
21.g Upon request from the City, the Company
shall implement EPA Method 21 upon
additional concerns
N/A Exceeds No equivalent regulation No equivalent regulation
21.g At least once per year, the Company shall
notify the City prior to FLIR camera use in case
the City wishes to observe the method
N/A Exceeds No equivalent regulation No equivalent regulation
21.h One Time Baseline Air Quality Monitoring N/A Exceeds No equivalent regulation No equivalent regulation
21.i One Time Air Sampling During Well
Completion
N/A Exceeds No equivalent regulation No equivalent regulation
21.j Ongoing Air Quality Monitoring Exceeds Exceeds No equivalent regulation No equivalent regulation
21.k Monitoring in Response to Emergencies or
Complaints
The City may require the Company to conduct
additional air monitoring as needed to respond
to emergency events such as spill, process
upsets, or accidental releases or in response to
odor complaints in City Limits
Exceeds Exceeds No equivalent regulation No equivalent regulation
21.l Air Quality Action Days
Requires operator to develop temporary
response actions to poor quality air days
N/A Exceeds No equivalent regulation No equivalent regulation
22.a Green Completions.
Gas gathering lines, separators, and sand traps
capable of supporting green completions as
described in COGCC Rule 805 shall be installed
at any location at which commercial quantities
of gas are reasonably expected to be produced
based on existing adjacent wells within one (1)
mile or well in the Fort Collins Field, whichever
is greater.
N/A Exceeds 40 CFR Part 60 Subpart
OOOO for natural gas
wells
COGCC 604.c.(2).c and COGCC 805.b(3) –
same requirements for wells located within a
Designated Setback Location, effective
August 2013
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 7
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
22.b Uncontrolled venting is prohibited
Uncontrolled venting prohibited regardless of
well location.
N/A Exceeds 40 CFR Part 60 Subpart
OOOO for natural gas
wells, exceptions for
safety and feasibility
COGCC 604.c.(2).c – same requirements as
for wells located within a Designated Setback
Location effective August 2013
22.c.1‐4 Temporary flowback flaring and oxidizing
equipment
Requires specific equipment regardless of
where well is located and where feasible.
N/A Exceeds 40 CFR Part 60 Subpart
OOOO for natural gas
wells, specifies similar or
equivalent equipment for
reduced emission
completions.
COGCC 604.c.(2).c – same requirements as
for wells located within a Designated Setback
Location effective August 2013
23. Exhaust
Requires exhaust to be vented up or in a
direction away from residences.
Meets Meets No equivalent regulation Exhaust from all engines, motors, coolers and
other mechanized equipment shall be vented
in a direction away from all building units
(Rule 802.e)
24. Fencing
Requires permanent fencing around the
operation, which must be visually interesting.
N/A Exceeds No equivalent regulation Required in high density areas, to protect
public welfare, to minimize environmental
impacts, or to protect cropland (Rule 603 and
902).
25. Flammable Material
All land within 25’ of a tank or other structure
must be kept free of weeds or rubbish.
Meets Meets No equivalent regulation Must comply with local fire codes and control
fire hazards.
26. Floodplains
Must comply with Chapter 10 of the Municipal
Code, including the prohibition of hazardous
material critical facilities in the 100‐year
floodplain.
N/A Exceeds No equivalent regulation
for critical facilities,
though SDWA establish
basis for siting
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 8
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
27. Water Quality
(see below)
27. Sample “Available Water Sources” N/A Meets CWA, RCRA, and SDWA
establish authority and
enforcement
requirements for water
quality sampling.
Water wells registered with CO Division of
Water Resources preferred. Also allows
permitted or adjudicated springs or
monitoring wells
27. Number of water sources sampled N/A Meets Federal regulations
establish authority and
enforcement but do not
spell out operational
details.
Cap of 4 water sources
27. Location of water sources sampled N/A Meets Federal regulations
establish authority and
enforcement but do not
spell out operational
details.
Located within ½ mile radius of proposed
well
27. Orientation of sampling locations N/A Meets Federal regulations
establish authority and
enforcement but do not
spell out operational
details.
Both up‐gradient and down‐gradient
sampling required
27. Multiple identified aquifers N/A Meets Federal regulations
establish authority and
enforcement but do not
spell out operational
details.
Sampling of multiple defined aquifers (e.g.,
deepest and shallowest)
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 9
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
27. Timing of sampling
City requires additional sampling intervals
after well completion.
N/A Exceeds Federal regulations
establish authority and
enforcement but do not
spell out operational
details.
1 baseline sampling event prior to site
construction
2 post‐completion sampling events (one
between 6 and 12 months after and one
between 60 and 72 months after)
27. Sampling procedures and analysis
City requires additional parameters to be
tested.
N/A Exceeds CWA and SDWA are the
foundation for all
subsequent rules and
regulations at the state
and local level.
Baseline sampling for drinking water
analytes, dissolved and gaseous petroleum
hydrocarbons, and microbiological
parameters
Post‐completion sampling for same
parameters as baseline sampling
Additional stable isotope analysis of methane
performed if thresholds for methane
exceeded
28. Landscaping
Requires use of existing well pads in the Fort
Collins Field, minimizing impacts to existing
vegetation, and the development of a Visual
Mitigation is required for any new wells.
N/A Exceeds No equivalent regulation No equivalent regulation
29. Lighting
Requires down‐lighting except during drilling
and completion and that a lighting plan be
submitted.
Exceeds Exceeds No equivalent regulation Lighting cannot trespass more than 1000’ off
the operation site, as of August 1.
30. Maintenance of Machinery
Routine field maintenance cannot occur within
300’ of a water body.
Exceeds Exceeds No equivalent regulation No equivalent regulation
31. Mud Tracking
Not allowed to track mud or debris onto public
streets; if mud is tracked, must be cleaned
immediately.
Exceeds Exceeds No equivalent regulation No equivalent regulation
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 10
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
32. Natural Resources
Requires that all natural habitats and features
as identified by the City be accounted for,
protected, as if necessary, mitigated in the site
analysis and design; not just the resources
outlined by the state, e.g., winter migration
corridors for mule deer, bald eagle nests, etc.
N/A Exceeds Must comply with
Endangered Species Act
and other federal
regulations
The state requires certain regulations for
operating within sensitive natural areas, all of
which would apply to Prospect Energy, e.g.,
the requirement to install wildlife crossovers
if open trenches are left open for more than
5 days and are greater than 5’ in width, can
also trigger consultation with the Division of
Parks and Wildlife.
33. Noise Mitigation
A noise mitigation plan must be submitted;
requires noise mitigation measures to be
constructed whenever the operation is at the
edge of either an existing residential
development or area zoned for future
residential development.
N/A Exceeds No equivalent regulation
known to staff
Similar regulations to City Code.
34. Pipelines
Requires pipelines to be certain distances
away from buildings and natural features and
align within existing rights‐of‐way whenever
feasible. Must also bore to minimize impacts.
N/A Exceeds No equivalent regulation
known to staff
Rule 1100 Series contains pipeline
regulations but does not require prescribed
setbacks or suggesting boring to protect
sensitive areas.
35. Recordation of flowlines
Requires flowlines, e.g., transmission and
gathering lines, to be recorded with the
County Recorder.
N/A Exceeds No equivalent regulation
known to staff
Requires that the flowlines can be located in
the field, but not recorded.
36. Recreational Activity Standards
Cannot degrade any existing recreational
standards.
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 11
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
38. Removal of equipment
All well drilling and completion equipment
must be removed from the site within 30 days
of well completion.
Exceeds Exceeds No equivalent regulation Requires equipment to be removed after 90
days.
39. Soil Gas Monitoring
May be used to assess well casing integrity
and potential for methane gas migration
N/A Exceeds CWA, SDWA, and RCRA
establish authority for
environmental sampling to
protect human health and
the environment.
Only required for coalbed methane.
40. Spills
Federal and state regulations apply. Also
requires notification of the City and the
property owner if the spill has the potential to
affect a surface water body or water well.
N/A Exceeds All federal laws apply All state laws apply
41. Stormwater Control Plan
City standards apply for stormwater control.
Exceeds Exceeds SDWA establishes
authority for stormwater
regulations.
Must meet State and Federal regulations
related to stormwater.
42. Temporary access roads.
Requires that any temporary roads be
reclaimed and re‐vegetated.
Exceeds Exceeds No equivalent regulation
43. Trailers
Allows trailers or offices on the site during
active drilling and well completion.
Exceeds Exceeds No equivalent regulation No equivalent regulation
44. Transportation and circulation
A Transportation Impact Analysis be submitted
to the City during the Conceptual Review of
the project; also requires proposed traffic and
access routes as well as a bond to cover any
damage that occurred during the well drilling
and completion phase of the site.
N/A Exceeds No equivalent regulation
known to staff
Must comply with state vehicle and traffic
laws and if a local government requires, a
traffic plan must coordinated with the local
jurisdiction (Rule 334 and Rule 604).
Attachment #2
Comparison Matrix – Operator Agreement to Federal and State Regulations 12
Operator Agreement Requirement
Does the Requirement
Meet or Exceed State and
Federal Regulations? Federal Regulations State/COGCC
Existing Regulations
Wells
New Wells
45. Wastewater and Waste Management
No land treatment or disposal of drilling muds
is allowed. A Spill Prevention, Control and
Countermeasures Plan (SPCC) is required.
Exceeds Exceeds Drilling mud not classified
as hazardous waste under
RCRA, so states can
determine disposal
options. RCRA establishes
authority for SPCC plans,
but a SPCC plan not
required for this facility
because of small size.
Disposal of drilling muds allowed under RCRA
E&P Exemption.
A SPCC plan not required for this facility
because of small size.
46. Water Supply
Requires disclosure of water source and
details on how the water will be transported.
Exceeds Exceeds No equivalent regulation No equivalent regulation
47. Weed Control
Responsible for ongoing weed control at all
operations in compliance with the Larimer
County Noxious Weed Management Plan.
Meets Meets No equivalent regulation Similar regulations as in the Operator
Agreement.
48. Insurance
Requires $10,000,000 per occurrence liability
insurance during drilling and completion. After
completion, requires $1,000,000 per
occurrence, $2,000,000 aggregate, and
general liability of $5,000,000.
N/A Exceeds No equivalent regulation The state has numerous levels of insurance
and bonds, including a $1,000,000 general
liability throughout the life of the operation.
ATTACHMENT 3
Time Line for Citizens for a Healthy Fort Collins Initiative Petition
May 28, 2013 Citizens for a Healthy Fort Collins (CHFC) files notice of intent to
circulate an initiative petition.
June 6, 2013 CHFC withdraws May 28 notice of intent and files a new notice of intent
with a new initiated ordinance.
CHFC submits petition sections for approval as to form; City Clerk
approves form of petition. CHFC has 60 days to collect signatures.
July 16, 2013 First Reading of Ordinance calling a special election on November 5 in
anticipation of successful initiative petition effort.
August 5, 2013 Deadline for CHFC to submit petitions. Clerk has 5 working days to
examine petitions.
August 12, 2013 Deadline for Clerk to finish examination of petitions.
August 20, 2013 Second Reading of Ordinance calling election. If petition is found
sufficient upon first examination, petition is presented to the Council to
adopt or place before voters.
August 27, 2013 Deadline to enter into an intergovernmental agreement with Larimer
County for conduct of election.
September 6, 2013 Deadline to certify ballot language to Larimer County.
November 5, 2013 Special Election (as a part of Larimer County Coordinated Mail Ballot
Election).
1
1
Oil and Gas Regulations Follow Up
Laurie Kadrich
Director, Community Development & Neighborhood Services
Dan Weinheimer
Policy and Project Manager
Lindsay Ex
Senior Environmental Planner
June 25, 2013 Council Work Session
2
Items for City Council
Consideration:
1. Does Council support a formal consideration to
extend Ordinance No. 145? If so, which option?
• Option #1: Extend 5-7 years, apply to Prospect
Energy and conduct a health impact study,
exclude City-owned lands, or
• Option #2: Extend to December 31, 2013 in order
to re-evaluate Land Use Code (LUC) changes,
engage the community in the LUC options and
codify any recommendations.
ATTACHMENT 4
2
3
Items for City Council
Consideration:
2. Does the Council support moving ahead with any
monitoring and/or added inspection options? If so,
should staff prepare a more detailed scope of work
and budget for those options?
– Site assessment for water and air quality
establishing current condition,
– Short or Long-term air quality monitoring
– Review of waste management practices,
– Inspect the current field for compliance to the
Operator Agreement, and/or
– Hire a third party contractor
4
Third Party Contractor:
Third party contractor would:
Visit the site during certain activities
Accompany the State Inspectors
Be the on-site City representative in emergency
situations
In addition to the Poudre Fire Authority and the
Office of Emergency Management
Looking for any Operator Agreement concerns
3
5
Costs of Monitoring and Inspection:
1. Establish current conditions:
• $35,000
2. Review waste management:
• $10-15,000
3. Inspect field for compliance with O/A:
• $5-10,000
4. Hire a third party contractor:
• $8-20,000
6
Short or Long-term Air Quality
Monitoring:
1. Short-term: defined period of time,
season, quarter or year
• $150,000 initial
• $50,000 annually
2. Long-term: continuous over a long
period of time typically 3 or more years
• $200-500,000 initial
• $75-200,000 annually
4
7
Comparison: Operator Agreement
to State & Federal guidelines:
• The Operator Agreement exceeds guidelines in
59 areas:
– 22 in Air Quality
– 7 in Water Quality
– 13 in Earth Quality
– 10 in Quality Information
– 7 in Nuisance Control
8
Air & Water Quality
Air Quality
• Leak detection and repair
program ensures
equipment operates
without leaks
• FLIR camera sees leaks
human eye cannot
• Soil gas monitoring is
required to test for
methane
Water Quality
• No operations allowed in
100-year floodplain
• Required disclosure of
water source and water
transportation
• Must test all known
aquifers
• Added sampling locations
and more often
5
9
Earth & Quality Information
Earth Quality
• Steel-rimmed
containment berms
• Natural habitats and
features must be
protected
• No on-site disposal of
drilling mud allowed
• Sites must minimize
impact to existing
vegetation
Quality Information
• Posted notification on site
• Subscription notification
available
• Mailed notice within ½
mile of location
• Neighborhood meetings
• Chemical disclosure
required
• Emergency plan required
10
Nuisance Control:
• Set-backs are 500’ or greater from existing and
new residential areas
• Electric equipment required to minimize noise and
air emissions
• Lighting must remain on-site unless during drilling
for safety reasons
• Vehicles cannot track mud offsite
• Traffic plan required
• Noise mitigation plan required
6
11
Timeline for Citizen Initiative:
• 7-16-13 First Reading of Ordinance calling a
special election in anticipation of a successful
initiative
• 8-5-13 Petitions must be submitted by this date
• 8-12-13 Clerk must complete petition review by
this date
• 8-20-13 Second Reading of an Ordinance calling
for a special election if petition is found sufficient
• 11-5-13 Special Election – mailed ballot
12
Items for City Council
Consideration:
1. Does Council support a formal consideration to
extend Ordinance No. 145? If so, which option?
• Option #1: Extend 5-7 years, apply to Prospect
Energy and conduct a health impact study,
exclude City-owned lands, or
• Option #2: Extend to December 31, 2013 in order
to re-evaluate Land Use Code (LUC) changes,
engage the community in the LUC options and
codify any recommendations.
7
13
Items for City Council
Consideration:
2. Does the Council support moving ahead with any
monitoring and/or added inspection options? If so,
should staff prepare a more detailed scope of work
and budget for those options?
– Site assessment for water and air quality
establishing current condition,
– Short or long-term air quality monitoring
– Review of waste management practices,
– Inspect the current field for compliance to the
Operator Agreement, and/or
– Hire a third party contractor
N/A Exceeds No equivalent regulation No equivalent regulation
37. Removal of debris
Requires removal of all construction debris.
Meets Meets No equivalent regulation Similar standard
requirements.
Certain regulations apply, but critical facilities
are allowed within the floodplain, if criteria
are met.
40 CFR 60.18(g)
(FLIR camera is an
alternative compliance
method accepted by EPA
COGCC Rule 604.c.(2).f ‐ leak detection plan
required if within designated setback
location.
which are not electrically operated that are
within four hundred (400) feet of Building
Units shall be equipped with quiet design
mufflers or equivalent. All mufflers shall be
properly installed and maintained in proper
working order (Rule 802.f).
with local regulations (Rule 603)
13. Chains
Must be removed before entering City streets.
Exceeds Exceeds No equivalent regulation No equivalent regulation