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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/16/2013 - ITEMS RELATING TO OIL AND GAS OPERATIONSDATE: July 16, 2013 STAFF: Laurie Kadrich, Lindsay Ex, Dan Weinheimer AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 30 SUBJECT Items Relating to Oil and Gas Operations. A. First Reading of Ordinance No. 106, 2013, Establishing 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 of Fort Collins for a Period of Seven (7) Years. OR First Reading Ordinance No. 107, 2013, Establishing 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 of Fort Collins until Midnight, December 31, 2013. B. First Reading of Ordinance No. 108, 2013, Amending the Land Use Code to Include Additional Regulations for Development in Close Proximity to Oil and Gas Operations. EXECUTIVE SUMMARY The purpose of this item is two-fold: first, to establish a Moratorium on the acceptance and processing of land use applications related to oil and gas until either December of 2013 or for a period of 7 years and second, to establish requirements for proposed residential developments in close proximity to existing oil and gas operations. Item #1 - Moratorium: 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 has determined that the seven (7) months established by Ordinance No. 145, 2012, as the duration of the moratorium is insufficient for City staff and City Council to determine the extent to which oil and gas uses may be locally regulated and to properly investigate, develop, and, if appropriate, adopt and implement any additional local regulations related to oil and gas uses in the City in order to protect and preserve the public’s health, safety and welfare. As the Moratorium established by Ordinance No. 145 expires on July 31, 2013, Council will determine whether to establish a moratorium until December 31, 2013 or for seven (7) years. Item #2 - Regulations for Residential Developments in close proximity to existing Oil and Gas Operations: On May 21, 2013, Council adopted the Operator Agreement with the only existing oil and gas operator, Prospect Energy, that requires stringent public health and safety measures be taken during both existing and planned operations within the City of Fort Collins. Neither this agreement nor state regulations address how proposed residential development must respond to existing oil and gas operations. The Land Use Code (LUC) currently contains buffer standards for proposed residential developments within fifty feet (50’) of existing industrial land uses. In order to better buffer proposed residential developments from existing oil and gas operations, the proposed LUC amendments establish a tiered approach to requirements for new residential developments in close proximity to oil and gas operations. Disclosure to future residents is required for any proposed oil and gas development within one thousand feet (1,000’) of an existing operation. If the development is proposed to be closer than five hundred feet (500’) of an existing oil and gas operation, additional screening and protection measures are required. If the subdivision is proposed to be less than three hundred fifty feet (350’) from an existing operation, a Modification of Standard would be required. July 16, 2013 -2- ITEM 30 BACKGROUND / DISCUSSION Item #1 – Moratorium Local governments have considered the use of moratoriums to postpone new oil and gas operations within their jurisdictions, citing the need to craft and adopt local land use regulations. Council adopted such a moratorium on December 18, 2012. While much work was completed during the first seven (7) months of the moratorium, Council requested that staff prepare an extension of Ordinance No. 145, 2012. Staff suggests the following two options be considered: Option #1 Impose a new seven-year moratorium in order to better determine the potential health impacts of various aspects of oil and gas operations and incorporate any findings into local regulations. The moratorium would apply to Prospect Energy as well as all other operators. City-owned lands outside the city limits would be excluded. Option #2 Impose a moratorium until December 31, 2013 in order to re-evaluate Land Use Code (LUC) changes, engage the community in the LUC options, and codify any recommendations. City-owned lands outside the City limits would be excluded, and Prospect Energy would be exempt from the moratorium as long as it operates in accordance with the Operator Agreement approved by the Council by resolution on May 21, 2013. Note: The current moratorium, established by Ordinance No. 145, 2012, 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. As highlighted during the June 25, 2013 Work Session (Attachment 1), a great deal of work was 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 were 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. Attachment 2 provides a more detailed update of the work requested by Council during the time of the moratorium and the work completed. July 16, 2013 -3- ITEM 30 Oil and Gas and Property Values While the state has proposed to study the health effects of oil and gas development, a few studies have also examined the effects of oil and gas development on property values. Staff is aware of a few studies related to oil and gas development and property values: • In one study, negative effects on rural residential property values in Alberta, Canada were found at up to 4 km from the gas development based on presence of sour gas wells and flaring (Boxall et al. 2005, available at http://www.sciencedirect.com/science/article/pii/S0928765505000084). • A second, unpublished Canadian study examined the effect of sour gas activity on rural residential properties (between 1 and 40 acres in size) using econometric models and found that as the density of oil and gas wells increased, property values could be negatively impacted by up to 10 percent within 4 km of the development (Molik et al. 2003, available at http://www.ekcbm.org/files/Property_Value_Study_0.pdf). • A working paper prepared by BBC Research and Consulting in La Plata County presents results of a modelling effort to evaluate how property values are impacted by proximity to coalbed methane wells. The study indicated that the overall area studied had a less than 1% decrease in sales price (2001, available at http://tinyurl.com/n7nh93u). • Finally, a recent article in KUNC suggested that agricultural property values in Weld County have increased 18 percent from the prior year (http://tinyurl.com/led535j). Note: the Canadian studies and the property values from Weld County were focused on gas development and the La Plata study was focused on coalbed methane. Staff could find no studies that discussed the impacts of oil development on property values, which is what is produced in the Fort Collins Field. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation Oil and gas production is currently limited to the Fort Collins Field (Attachment 3), located in the northeast portion of the city. The Fort Collins Field is regulated by the Colorado Oil and Gas Conservation Commission (COGCC) and the recently adopted Operator Agreement between the City and Prospect Energy. The Fort Collins Field has been in production since about 1924. Initially, the Field existed outside Fort Collins city limits and portions of the Field were annexed into city limits, beginning in 1984 (County Club North Annexation). Prospect Energy has been the owner and operator of the Fort Collins Field since approximately 2009. As the city has developed within the boundaries of its Growth Management Area, residential development has occurred around the field. The Land Use Code, the City’s adopted set of standards for regulating land development, contains provisions for residential developments adjacent to existing industrial land uses (Section 3.8.26 of the Land Use Code). These standards are designed to minimize impacts of industrial uses on future residents by providing landscaping, fencing, or other screening options to better separate these land uses. Many citizens have expressed concerns about oil and gas activity in Fort Collins. Some of the concerns expressed reflect a concern about living near oil and gas operations. Currently, the buffer requirements for oil and gas operations are contained within the definition for resource extraction. These standards require screening between the residential development and the operation to separate the land uses. The closer the development is proposed to the industrial use, the more screening is required. The proposed Land Use Code amendments create separate definitions for resource extraction and oil and gas operations. The proposed buffer standards for oil and gas operations (Buffer Yard D) would include the following requirements: • If the subdivision is proposed within one thousand feet (500-1,000') of an existing operation: N Disclosure shall be provided to future residents of the subdivision. The purpose of the disclosure is to inform future residents of the existing operation, the potential hazards associated with the operation, and contact information for the oil and gas operator. July 16, 2013 -4- ITEM 30 • If the subdivision is proposed within three hundred fifty to five hundred feet (350-500') of an existing operation: N If it does not already exist, fencing must be erected between the development and the operation to restrict public access, and N Landscaping, berming, or installation of a wall to aesthetically screen the operation from the future residents shall be provided. • If the subdivision is proposed to be less than three hundred fifty feet (350') from an existing operation: N A Modification of Standard would be required. The applicant would need to demonstrate that the proposed residential development is not detrimental to the public good and that, for example, it is equal to or better than a proposed plan that would comply with the standard (for additional criteria, see Section 2.8.2(H) of the Land Use Code). A map of the areas in the city that could be affected by these proposed changes is attached to this agenda item summary (see Attachment 4). FINANCIAL / ECONOMIC IMPACTS Item #1 – Moratorium: The financial and economic impacts of an oil and gas moratorium were outlined in previous Council Agenda Item Summaries, e.g., the AIS from the December 4 and December 18, 2012 meetings. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation: Increasing the setbacks between proposed residential developments and existing oil and gas operations further minimizes the potential risks of these two land uses in close proximity. However, the financial impacts of amending the Land Use Code include the potential for reduced developable land on property owners. The disclosure requirements are consistent with other City requirements, e.g., radon disclosure, and would not have significant financial ramifications. The aesthetic and fencing improvements could add cost to the project’s development; however, these improvements may also increase property values for the future residents and therefore make the lots or homes more desirable. ENVIRONMENTAL IMPACTS Item #1 – Moratorium: The financial and economic impacts of an oil and gas moratorium were outlined in previous Council Agenda Item Summaries, e.g., the AIS from the December 4 and December 18, 2012 meetings. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation: Increasing the setbacks between proposed residential developments and existing oil and gas operations reduces the risks for future residents living in close proximity to oil and gas operations. The disclosure requirement ensures future residents are informed of the potential risks association with the oil and gas operation. STAFF RECOMMENDATION Item #1 – Moratorium: If Council extends the moratorium, Staff recommends Option #2 to extend the moratorium until December 31, 2013. Item #2 – Regulations for Residential Developments in close proximity to existing Oil and Gas Operation: Staff recommends adoption of the Ordinance on First Reading. BOARD / COMMISSION RECOMMENDATION The Planning and Zoning Board unanimously (5-0) recommended approval of the Land Use Code amendments regarding reciprocal setbacks and buffering requirements during its November 1, 2012 meeting (Attachment 5). These amendments were discussed within the broader context of Land Use Code regulations for oil and gas. July 16, 2013 -5- ITEM 30 PUBLIC OUTREACH Staff has facilitated public discussion of the proposed amendments within the broader oil and gas issue since 2012. For a specific outline of these outreach efforts, please see the Agenda Item Summary from the December 4, 2012 Regular Meeting. Three pending residential developments would be affected by the proposed regulations. Staff has discussed the proposed regulations with all three developers. Staff has also contacted the Chamber of Commerce and the Board of Realtors to discuss the proposed changes. A meeting is scheduled with the Chamber’s Legislative Affairs Committee on July 19 to discuss the proposed regulations and to provide an overall update on oil and gas issues within the city. ATTACHMENTS 1. Work Session Summary – June 25, 2013 2. Work Session AIS – June 25, 2013 (without attachments) 3. Vicinity Map 4. Potentially Affected Areas by the Proposed Standards 5. Planning and Zoning Board – November 1, 2012 Meeting Minutes 6. Powerpoint Presentation ATTACHMENT 1 COPY COPY COPY ATTACHMENT 2 DATE: 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: COPY COPY COPY 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. COPY COPY COPY 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. COPY COPY COPY 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: COPY COPY COPY 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. COPY COPY COPY 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 Collins Fort Field Undeveloped Acreage Prospect City of Energy Fort Oil/Collins Gas Fields CITY GEOGRAPHIC These and were map OF not products FORT designed and INFORMATION COLLINS or all intended underlying for general data SYSTEM are use developed by members MAP for use of PRODUCTS the by the public. City of The Fort City Collins makes for no its representation internal purposes or only, warranty dimensions, as to contours, its accuracy, property timeliness, boundaries, or completeness, or placement and of location in particular, of any its map accuracy features in thereon. labeling or THE displaying CITY OF FORT COLLINS PARTICULAR MAKES PURPOSE, NO WARRANTY EXPRESSED OF MERCHANTABILITY OR IMPLIED, WITH OR RESPECT WARRANTY TO THESE FOR FITNESS MAP PRODUCTS OF USE FOR OR THE UNDERLYING FAULTS, and assumes DATA. Any all responsibility users of these of map the use products, thereof, map and applications, further covenants or data, and accepts agrees them to hold AS the IS, City WITH harmless ALL from made and this against information all damage, available. loss, Independent or liability arising verification from any of all use data of contained this map product, herein should in consideration be obtained of by the any City's users having of these liability, products, whether or direct, underlying indirect, data. or consequential, The City disclaims, which and arises shall or not may be arise held from liable these for any map and products all damage, or the loss, use thereof or by any person or entity. Printed: March 12, 2013 0 1 2 3 4Miles © Fort Collins Field Undeveloped Acreage City of Fort Collins Growth Management Area ATTACHMENT 3 # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # ## # Brightwater Crossing Lind Maple Hill n Pheasant Ridge Hearthfire Water's Edge Richard's Lake Collins Fort Field ervoir er Long Pond R ichard's Lake Douglas Rd Turnberry Rd Oil/Gas Field Residential City of Development Fort Collins Restriction Zones CITY GEOGRAPHIC These and were map OF not products FORT designed and INFORMATION COLLINS or all intended underlying for general data SYSTEM are use developed by members MAP for use of PRODUCTS the by the public. City of The Fort City Collins makes for no its representation internal purposes or only, warranty dimensions, as to contours, its accuracy, property timeliness, boundaries, or completeness, or placement and of location in particular, of any its map accuracy features in thereon. labeling or THE displaying CITY OF FORT Planning and Zoning Special Hearing Board Minutes November 1, 2012 6:00 p.m. Council Liaison: Mayor Weitkunat Staff Liaison: Laurie Kadrich Chair: Andy Smith Phone: (H) 482-7994 Chair Andy Smith called the meeting to order at 6:07 p.m. Roll Call: Campana, Carpenter, Schmidt, Smith, and Stockover Excused Absence: Kirkpatrick and Hatfield Staff Present: Kadrich, Eckman, Ex, Weinheimer, Pierce, Webb, and Sanchez-Sprague Agenda Review CDNS Director Laurie Kadrich reviewed the agenda. Citizen participation: None Chair Smith asked if any member of the audience, the Board or staff wanted to pull an item from consent. No one did. Consent Agenda: None Discussion Agenda: 1. Proposed Land Use Code Regulation for Local Oil and Gas Development _______ Project: Proposed Land Use Code Regulation for Local Oil and Gas Development Project Description: This is a request for the Board to consider making a recommendation to City Council to update its land use regulations concerning oil and gas exploration and develop options for mitigating impacts upon the community. Hearing Testimony, Written Comments and Other Evidence CDNS Director Laurie Kadrich said the City of Fort Collins staff is in the process of reviewing and updating its land use regulations concerning oil and gas exploration and developing options for mitigating impacts upon the community. The City’s goal is to develop strategies and tools that best reflect Fort ATTACHMENT 5 Collins’ community values. In order to accomplish the best outcome, staff has engaged residents through an extensive public engagement process, including boards and commissions and the formation of an advisory committee, composed of representatives from eight City Boards and Commissions, to assist in developing regulations that reflect community values. Staff would like to know: Does P&Z recommend the adoption of the proposed standards for oil and gas operations? Does P&Z recommend the adoption of a dual track (Standard vs. Expedited Review) for oil and gas operations? Their presentation included information on current activity, existing and proposed framework for oil and gas, outreach and feedback, discussion, and next steps. Currently, oil and gas operations are addressed by federal and state regulations and the City of Fort Collins Land Use Code (LUC) Section 3.8.14 (if a use is preempted, it shall be allowed. It is subject to a Type 2 (Planning and Zoning Board) review. At a federal level, existing regulations are: Clean Air Act, Clean Water Act, Resource and Recovery Act, Safe Drinking Water Act, Threatened and Endangered Species Act. Currently, the mechanisms to influence oil and gas operations have been to engage in stakeholder processes related to the development of federal laws and regulations. At a state level, regulation comes from the Colorado Oil and Gas Conservation Commission (COGCC). They oversee oil and gas operations in the state. It is composed of a seven-member board and has 17 inspectors for over 49,000 wells in Colorado. Area of COGCC staff expertise includes geochemistry, hydrology and geology. Additionally, the Colorado Department of Public Health and the Environment (CDPHE), Water Quality Control Division (WQCD) respond to spills, impacts to surface water and the Air Pollution Control Division (APCD) monitor air quality after well completion. The Division of Parks and Wildlife (DPW) can be engaged in permit review for sensitive habitat and species. State regulations address: comprehensive drilling plans; setbacks; noise, dust, and lighting; habitat and wildlife protection; safety, spill remediation and site reclamation; setback and water quality regulations currently under review. Currently, the mechanisms to influence oil and gas operations are: engage in stakeholder processes, local government designee, legislative advocacy, intergovernmental agreement, and designated outside activity areas. Regionally, mechanisms to influence oil and gas operations have been: local government designee, legislative advocacy, and intergovernmental agreements which obtain inspection authority and provide an opportunity to partner regionally for air and water quality monitoring. Locally, staff recommends the mechanisms to influence oil and gas operations are: local government designee, intergovernmental agreements, operator dialogue, regulatory options, designated outside activity areas, and maintain connections with researchers. Options to consider are: operator agreements (construct a single agreement for all operations within the City). It would require approval by City Council and must outline public process such as notice for activities and neighborhood meetings. It addresses similar standards in expedited review and a surface use agreement will be required if on City land. Option 2 is the development review track. It would require the development review for each new operation either by the standard or expedited review process. The standard review process is a public process with written comments with site specific goal based standards, neighborhood meeting, public hearing, and Planning and Zoning Board approval. The expedited review process is a public process with prescriptive standards for which a project must qualify and CDNS Director’ review and approval. This option, in staff’s view, includes proposed regulations in the area of air quality, water quality, natural resource protection, compatibility, transportation, emergency response, and additional concerns, e.g., noise and lighting. ATTACHMENT 5 Staff outlined the differences between the standard and expedited review process for air and water quality, natural resources, emergency response, transportation, and additional regulations (noise, lighting, weed control, spills, and abandoned and ‘plugged’ wells). They described their outreach and feedback process which included: researched what other communities are doing and working with them on partnering opportunities through intergovernmental agreements and shared inspection authority and monitoring. Staff said they met with COGCC staff and local stakeholders. They formed an Advisory Committee made up of members from the Water Board, Energy Board, Air Quality Board, Parks and Recreation Board, Planning and Zoning Board, Economic Advisory Commission, Natural Resources Advisory Board, and Land Conservation and Stewardship Board. Their work focused on water quality, air quality, emergency services, and fees and finances. Outside the Advisory Committee, all affected city boards discussed the proposal and are generally in support of the dual track. Staff reviewed next steps with include consideration by City Council at their December 4 and 18 meetings and the proposal that, if adopted, they would check in with the Planning and Zoning Board at regular intervals on proposed changes to the LUC to ensure regulations are up-to-date. Staff said the Advisory Committee at their November 14 rulemaking meeting will be reviewing setback for new well sites. Under consideration are potential drilling areas (Zones 1, 2 and 3) based on high density setbacks. The proposed setbacks by zone are: Zone 1 – within 350 feet from wellhead/equipment, Zone 2 – from 350 to 700 feet, Zone 3 – from 700 to 1,200 feet. Other setbacks are except as modified, minimum setbacks from buildings, public roads, major above ground utility lines or railroads to be increased from 150 to 200 feet and designated outdoor activity areas will be maintained – 350 foot minimum from approved site. Rules will include notice requirements, comment period and mitigation measure requirements. Staff said in the area of statewide groundwater sampling and monitoring, they collect initial groundwater samples prior to beginning construction at the two closest water wells, springs, or surface water and within 1 mile of proposed location. A new sampling event is required if drilling is delayed one year or more of site construction or if a well is re-stimulated one year or more after the initial sample is taken. Follow-up sampling events are conducted between 12 and 18 months after initial sampling at the time of final site reclamation. It may also be required due to changes in water quality documented by analytical data and at the Director’s discretion in response to complaints from water well owners. Test results will be provided to the well owner and to the COGCC (and posted on website). Staff asked the Planning and Zoning Board to recommend to City Council the adoption of the proposed standards as related to the LUC. They also asked if the board supported the dual track process of standard and expedited review process options. Chair Smith said the board is really focused on the land use components of the proposal. He said staff did a good job of presenting the various layers of regulations that occur in this industry and while we all have strong feelings about the topic, there is a very limited slice that is in the purview of this board. That doesn’t mean they don’t care. He said he thinks the board has done a very good job over the years in being able to be effective within their purview. Chair Smith said this is a legal hearing and he asked that everyone act appropriately. He will moderate the meeting for decorum, tone, and civility so along those lines he asked the audience not to cheer, jeer, or applaud. He said after the completion of public testimony, staff will have a chance to clarify. ATTACHMENT 5 Public Input Bob Osmundson, 1413 Cactus Ct, said he had worked 35 years with the same oil and gas company and sixteen of those years were as a public affairs officer for various western states. He said if there had been a problem, he would have heard about it. He said the industry would like to have one source of government regulations and that the State of Colorado has some of the most strenuous regulations in the nation. They protect our communities, our health and our environment. He asked that we please not over-regulate. He asked that we don’t make it difficult for business to flourish. He said Erie and Windsor have operating agreements and with them their community needs are met. Bill Jenkins, 710 Mathews Street, said he’d like to acknowledge staff’s efforts to find a way to play between potential conflicts with COGCC and the unknown health issues that are out there. He agrees with the written comments submitted by from the Clean Water Action group of the Poudre Canyon Sierra Club. He thinks each well should be scrutinized because there is so much potential for problems. He said Fort Collins has its own value system in terms of environment and health separate from what the COGCC has established for the rest of the state. He also thinks there should be some type of bonding situation where if anything comes up – concrete casing fails or blow-out; there should be some kind of operator financial responsibility. They need to be accountable. Delores Williams, 415 Mason Court, said she appreciates all the work done by staff. She thinks there should only be the expedited process because we’re a first class city and we have the air conversions. We have what some other places don’t have like prevailing winds. She asked how we are going to handle illnesses if nearby residents become ill. She said we are in a desert and each well uses between 1 and 5 million gallons of water. Are we doing away with agriculture? She’s concerned about its effect on global warming. She asked the board to consider the health of their constituents. Nancy York, 130 South Whitcomb, said she too wants to thank staff for their diligence. She thinks all of us are together in wanting to protect the health and environment. She noted that there’s more to come— more definition and more moderation. Her advice is to go for the most stringent possibilities. If it needs to be modified later, we can do that later. She agrees each well require an operator agreement and that there should be time constraints (not abandon it for a while). She thinks public notification should be a given. She thinks there should be baseline monitoring of the soil, water and air for all drilling. There should be full disclosure of the chemicals and the various ‘ingredients’ that go into the fracking method. Leo Bucilato, 2238 Iroquois Drive, said he attended the work session as well as this hearing. He thinks it’s outrageous not so much what was said but what was omitted. There was no mention of the chemicals leaking into the aquifers or the method by which aquifers could be poisoned. In fact, there was no mention of aquifers. There was no mention of negative effects of fracking nor of the potential for negative effects of fracking. He said the ‘fast track’ excludes public hearing—that will disempower the public. He said the ‘fast track’ allows for exemptions or waivers of requirements. Why in this meeting was there no mention of the waivers? In fact, one person has the power to grant waivers to the oil and gas industry—the Director of the CDNS. He said the ‘fast track’ allows the operator to do testing on their own. What are we supposed to do, trust them? He asked why doesn’t the city do it themself or pay a third party to do the testing. It’s difficult for him to understand; he thinks there’s a lot more to be said. Devin Hirning, a southeast Fort Collins resident, said he sent some correspondence to the staff contact at fcgov.com/oilandgas. He said he’s a much better writer than speaker and asked the board to consider his comments. He did want to thank staff because he thinks they’ve made extraordinary efforts. He doesn’t think their proposal is strict enough. He’s put forth ideas in the letter he’s submitted. He thinks the Board asks great questions. He does want to highlight some information circulated by the industry that was looking for people to come to tonight’s meeting to characterize people who offer local support. He has spoken on many occasions on issues that affect residents of southeast Fort Collins. He did want to highlight how much the extraction process has cost the public and read a portion of his letter – ‘ Texas ATTACHMENT 5 has more than 7,800 orphaned oil and gas wells – wells that were never properly closed and whose owners, in many cases, no longer exist as functioning business entities. These wells pose a continual threat of groundwater pollution and have cost the state of Texas more than $247 million to plug.’ He said there are other references. He asked who is going to pay the cost when the industry has come and gone from Fort Collins. He referenced a quote by Headwaters Economics that stated: ‘Some argue that Colorado’s low tax rate and incentives must be retained, or drilling activity will move to neighboring states. Despite these warnings, the academic literature shows that taxes are largely irrelevant to total oil production. Chiefly, the oil industry is a resource dependent industry and cannot move the location of production, like a textile mill or auto manufacturer, to seek out lower labor costs or to win greater tax concessions. According to the American Petroleum Institute, US based oil and gas companies must structure their operations and invest substantial capital where the resource is found rather than where the best tax regime is located.’ He asked that they pay for any situation they create. Tom Hoehn, 281 S. Washington, said he’d like to express his great alarm about the known risks to our health and water from the natural gas industry due to hydro fracking. He’s personally spoken to people in Garfield County and he’s learned about the consequences to their personal health, property values, and water. That has only increased his concern. He’d like to request the board take a stand to protect the health of the citizens and the water of Fort Collins by passing a single mandatory regulation combining both the expedited and standard review by city staff. He’d still like to the board review and he’d still like to have a vote and public input. He also requests that no city water be sold, leased, or rented to oil and gas companies. He requests that the companies operating within city limits be required to disclose all chemicals (both produced by and used) in the entire drilling and fracking processes. Rose Lew, 2014 Westview Road, said she’s been in Fort Collins for 15 years and she’s here both as a concerned citizen and as a professional. She has graduate degrees in environmental science and public health. She worked for 12 years with the US Environmental Protection agency—10 years in DC, 2 years in Denver. She helped developed guidelines on groundwater protection and then reviewed state groundwater protection programs as well as well-head protection area programs. She provided technical assistance to local governments. She is very concerned about fracking. She thinks government and business should be conducted as if we were in a fish bowl. She thinks the problems with fracking started in 2005 and 2006 when Dick Cheney created the national energy policy written by and for the oil and gas industry without any other interests represented. That exempted fracking from at least eight national environmental and health & safety laws. We don’t have all those protections we had up to 2006. Lew said she sees the very excellent and thorough work of staff but some of the things she’s concerned about are the lack of maps of the aquifer system in the area and the relationship of existing or planned wells to the aquifer system. She hasn’t seen any maps of what areas are vulnerable to being taken over because it’s the oil and gas companies that own the mineral rights. She has seen anything that addresses cumulative impacts (air, water quality/quantity) of these wells. Becky Boutz said she lives in Laporte. She said air and water pollution do not stop at the borders of the city. Basically she doesn’t think this technology is safe. She thinks the state is turning a blind eye. She thinks we’re caught in the middle. She wishes we can work together to pressure the state. She believes they have dollar signs in their eyes—they see jobs and revenue stream. She’s seeing increased costs for her health care. She’s also concerned about an early death sentence. She said there are cumulative health effects and we are being a little short sighted. She said everyone is giving feedback that there are adverse impacts and nobody is listening. Drilling is going forward. She spoke of individuals with asthma and cancer right where all the drilling is happening. There will be huge truck traffic—there’s potential for doubling our air pollution. She said well casings fail immediately in 6% of the cases. She said 50-75% of them fail over the life cycle of the well. It’s not safe and together she thinks we should ban it. Rudy Ziti, 1626 Fantail Ct, said he completely understands differences in issues that are partisan. He said this is not a partisan issue. We can agree on one thing. We need energy. Energy development is ATTACHMENT 5 vital to our community. He said Colorado has the most comprehensive regulations in the nation and they make sure that energy development happens in a responsible way that protects citizens and our beautiful state. He said fracking itself has been around since 1949. Perhaps there have been some accidents but he thinks it’s all about balance. He encouraged the board to say yes to good jobs, citizen engagement, and energy independence and no to unnecessary regulations. Chris Gabbar, 6321 Treestead Rd, said she’s lived in Fort Collins for 25 years. She’s here to beg the board not to sacrifice our beautiful city to the oil industry. She wonders how hydraulic fracking will benefit Fort Collins. She said hydraulic fracking is a relatively new technology and there are many questions. We’re living through the modern day equivalent of the gold rush with the oil industry racing to extract natural gas at maximum speed. She said ‘bust’ may be the end result. She said natural gas is mostly methane and it’s 100 times more powerful than CO2 in contributing to the ozone layer. If it’s safe, why is the practice exempt from the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, and other acts? There’s potential threat to local water resources. She said a few months ago Nationwide Mutual Insurance Company decided they would not cover damages by fracking. Risks to Fort Collins are water contamination, air pollution, toxic chemicals with compounds linked to cancer, birth defects, and other serious health problems. Wastewater can bring up dangerous radioactive particles that have been buried underneath the ground for millions of years. Safe disposal of radioactive wastewater is unachievable. Water processing facilities cannot handle this toxic fluid. Cleanup of spills and accidents is often the legal responsibility of land owners and not the fracking companies. Taxpayers will foot the bill for roads, police, EMTs and other infrastructure. Agricultural and tourism are the foundation of Colorado’s economy. Industrializing the state with tens of thousands of gas wells will negatively impact these important economic engines. We are here tonight to ask the board to join with them to keep Fort Collins safe for us and future generations. It’s not safe and it should not be allowed in city limits and natural areas. Marcy Mathews lives in west Fort Collins. She said as you consider oil and gas issues tonight, please remember these 4 key points. Colorado already has the most restrictive, cumbersome regulations in the nation. Fort Collins does not need to put a new layer of regulations on top of the state’s rules. We should work with the state. More oil and gas production means more jobs. Oil and gas production means more revenue. In addition to paying all the taxes we all pay, energy producers pay a huge property tax on the actual oil and natural gas they produce. We pay property tax at 20% of the assessed value. Oil and gas pays at 87.5% of the assessed value. This will be a huge windfall to our city and our schools. If Fort Collins passes restrictive oil and gas regulations even though Colorado already has the toughest rules in America; you chase away jobs, growth, and all that revenue for schools. She said that doesn’t make sense. She asked the board not to ‘fixate’ on all the irrational arguments of drilling opponents but rather focus on the tremendous opportunities that await. Scott Hall, 1600 Stout Street, Denver, said he is the CEO of Black Diamond Minerals. They are the wholly owned subsidiary of Prospect Energy. Prospect Energy is the operator for the Fort Collins oil field which is located between the City of Fort Collins and Wellington. A portion of that field is within the city limits of Fort Collins. They are the only active wells within the City of Fort Collins. He said the primary thing he does is bring energy to market and energy is a beautiful thing. It’s the essence of life. If you think about all the health aspects that people have talked about in the last 120 years, our life expectancy has doubled…from 35 to 77 years at a time we have been greatly increasing our energy consumption. The reason our life expectancy has doubled is because we use energy to help benefit all of us. It’s made our lives better. He’d like the board to keep that in mind. He’d also like the city to know that at any time, he’s available for any type of consultation they want on how oil and gas operations are conducted. He’s also an ‘SB” distinguished lecturer on horizontal drilling and fracturing. He holds US patents in fracturing. He’s written several technical papers on fracturing. He clearly believes it’s a very safe activity. He thinks it’s vital to their industry. He said 63% of our energy comes from oil and gas; another 20% comes from coal. 83% of our energy comes from hydrocarbons. We all want to move to a more sustainable ATTACHMENT 5 environment and we all hope we get there. Wanting to achieve sustainability by ‘punching’ one industry in the nose in order to try and help another is not a cooperative effort to get to that better, sustainable lifestyle. He said the rules the city is looking at are rules that are trying to be implemented in Boulder County and Longmont. We know that the Longmont rules are under litigation for the potential preemption and the potential for ‘taking’ and that’s one of his big concerns. He’s concerned about how much of this takes away value from his ability to effectively develop a field. He noted he also submitted written comments today which he didn’t hear mentioned. Member Schmidt asked Mr. Scott to explain the difference between hydraulic fracking and the fracking that was done in 1949. Scott said there is no difference and there have been over 1.2 million wells fracked in the United States since 1949. The technology is very similar. All you are essentially doing is pumping a sand laden fluid into the ground in order to create a wedge that you can pump sand into. When you stop pumping, the rock closes back in the sand and creates better permeability down the hole. The fractures all stay whole. They have done numerous testing and they’ve learned that all the fracks stay near the pay zones. In Fort Collins, the pay zones are 4,000 to 5,000 feet deep. Member Schmidt asked when they would frack an existing well and would you have to apply for a separate permit. Scott said wells are mostly fracked when they are initially completed. Scott said they recently fracked an existing well to improve its pay zone. Scott said he really supports the Local Government Designee or ‘LGD’ process and would really work with staff on a ‘MOU’ (Memorandum of Understanding) process. Fred Kirsch lives at 414B Meldrum Avenue. He said he’s representing himself as well as the Community for Sustainable Energy (CSE). He’ll work to keep comments within the purview of the board. He thanked staff for working so hard on developing the codes, the board, and those present to make democracy work. He said there’s a map in the packet that shows Fort Collins in its current state and areas that are drillable. He’d like to see that map under expedited conditions as well as the standard review so we can compare what areas might be drilled under each option. He said CSE has 12,000 contributing members in Fort Collins. He said since early October they’ve been knocking on doors to get peoples’ perceptions of oil and gas drilling. They’ve contacted 1000 and over 900 have agreed with the comment that citizens have the right to know what pollution is coming from an oil and gas well in their neighborhood. They think there should not be any more drilling in Fort Collins until there is proper monitoring and an alert system that lets people know immediately when there’s a toxic release. Right now, your nose is the alert system. He shared information on a recent case in Erie. Over a course of 2 months, they finally figured out to file a complaint and within a week the operator was out there making repairs. He said there needs to be an earlier detection system than your nose. Erin Lamb, 1476 Edgewood Ct, said she is a CSU student and a native of Colorado. She loves Fort Collins and she thinks oil and gas development would be a good thing for this community if done properly. She knows we all probably drove our cars here so we obviously we do use gas. She’s been keeping up with the state-wide regulations and she thinks following Windsor and Erie would be a good move for Fort Collins. They are a good frame of reference even though we are not exactly like them. They have great agreements with their operators and their community needs are met. Collaboration is key for Fort Collins. She said oil and gas will bring jobs to this great city and it will boost their economy to make Fort Collins the best it can be. John Reguse, 303 N. Meldrum, said he’s a graduate student at CSU studying physics, specifically solar panels. He thinks natural gas can be a friend of renewable energy however at this time it appears that the impact of hydraulic fracking on the community’s health and environment is unknown. Oil and gas have been around for a billion years, it will be here for another 10 or 20 years or until we can answer these questions. He said he works with heavy metals on a regular basis and volatile organic ATTACHMENT 5 compounds (VOC) are scarier than they sound. Allowing any amount of these compounds in the environment should be unacceptable. Rico Moore, 721 W. Myrtle, said he’d like to respond to a couple of things that have been said and to recommend the board says no to both questions because he thinks they should adopt one regulation that encompasses the most stringent from both the expedited and standard review. He said he had to resign his job at Aims Community College in Greeley after an oil well was drilled on campus and he became ill. He said resources in terms of domestic energy not true. The price of natural gas is extremely low, shipped to the coast and sent to developing Asian markets. Wellbore casing failure – the safety of fracking is not real – 6% of wellbore casings fail upon completion and 60% fail after 20 years. They all fail over time. Moore said the aim of the expedited and standard review is to protect the environmental health of Fort Collins while remaining in line with COGCC. He said its alignment and allegiance is for the health, longevity, and legacy of this land called Fort Collins. The values we hold dear in areas such as our air, water, and earth. He said a recent study showed that 43% of fracking spills contaminated ground water and service water. Another recent study from NOAA (National Oceanic and Atmospheric Administration) shows fracking releases twice as much methane as potent greenhouse gas. He said he visited a site and in every direction he looked there were wells and the smell of burning tires. He suggests to the board that they support and adopt one mandatory regulation that frackers must adhere to. Eric Sutherland, 3520 Golden Currant, said he’s here to express extreme disappointment in his city government with what he’s seen this evening. The idea that you’re holding a carrot out in front of the industry to adopt better practices because of an expedited review process is completely untested. He thinks it’s not going to be enough incentive for them to pursue the ‘better’ course. He thinks they are just wasting their time looking at this dual track process. With reference to PRPA (Platte River Power Authority) he said our Longmont partner is always doing interesting things in their city government and he’s become a student of their government. He said their mayor (Dennis Coons) is a very inspiring leader. What they’re doing in Longmont, he wishes our city would follow. Our desire to protect our citizens really is worth going the extra mile to preserve. He said Fort Collins is bound by state standards as to how much renewable energy we should be purchasing and deliver into their system. He said we’re not. He thinks we should not cede our power to the PUC (Public Utilities Commission). He wishes we would do what Longmont does. He laments the lack of back bone and perseverance of our values in the proposal being presented. Monte Barry said he lives in downtown Fort Collins. He referred to the women who spoke of 19,000 wells in Weld County. He recently took a trip through parts of Firestone and he got to see an oil and gas operation first hand. He was amazed at the setbacks near homes, business, and playgrounds. He would urge the board to visit Firestone. As far as fracking is concerned, it’s his understanding that only ½ of the injected fluids come back out. He thinks it’s “a Haliburton loophole back doored in” deep well injection operation. It needs to be heavily regulated by EPA (Environmental Protection Agency). He’d urge them to consider these factors. John Barnett, 3200 Greenwood Ct, said one of the things he heard tonight was that Colorado had one of the most stringent regulations in the country, please don’t adopt any more stringent regulations than that or you’ll drive business away. Indeed, if that was true, we would not have the drilling boom we have in Weld County. What the State Oil and Gas Commission did was adopt a set of fairly strict regulations because they did so late in the game and they were able to learn lessons from other states. They adopted a one size fits all. They also allowed space in there for other cities to adopt regulations to meet their own needs. We heard from industry representatives that towns like Erie and Windsor are quite satisfied with a fairly low level of additional regulation but if you compare the history of Fort Collins land use regulations with the history of those communities, you’ll know that Fort Collins has always set a higher standard. It’s kind of pioneered a lot of land use concepts and a lot more stringent regulations ATTACHMENT 5 than other communities. In fact, the reality is that Fort Collins is pretty healthy economically. He thinks it’s perfectly kosher to adopt more stringent regulations. He shared a story of growing up in Pennsylvania and impact on coal mining and a long standing fire. He urged the board to adopt strict regulations. He asked that they use public review but use it with the higher standards that you’re giving for the expedited review because that is really going to do a better job protecting the health, safety and welfare in Fort Collins. Leakage and cracks are a land use issue. Grant Hallet, 2301 Sheffeld Drive, said he just wants to echo the sentiment about the precautionary principle the last gentleman spoke on. Waiting for mitigation and adaptation after the disastrous effects have already happened is not enough. He referred to a recent study commissioned by the CI (Climate Institute). The National Resource Council did an 18 month investigation of climate change effects and national security implications. They were supposed to report on it on Tuesday but Hurricane Sandy got in their way. “Oops, I guess we learned.” He asked that they please use precautionary principle and not learn before it’s too late. Board Discussion Chair asked staff to comment. Director Kadrich said there were a couple of things she picked up on that she’d like to further review or re-review and that has to do with the differences in the process between the expedited and the standard review. Very clearly under the expedited review it is similar to the City’s basic development review wherein the Director has the final authority. That is not unique as a part of the LUC. What is unique under this proposal is that there would be notice given to others within a ½ mile distance of where the application was received. Folks could make written comments. There would not be a hearing on this matter and there would be an internal staff review very similar to what is done on other types of development. After all that was done, the director would provide a written finding about how it complied with the LUC and if the application was modified or varied modified in some way. Under the standard review there would also be a notice (a ½ mile area). There would be a neighborhood meeting rather than just accepting written comments. There would be a Planning and Zoning Board public hearing similar to what is being held tonight. In that case, the board, after public testimony and deliberation would make a finding. Kadrich said there is a waiver provision in the code. The waiver provision is not exclusive to the Director. It is determined by the decision maker. It is modeled on what is currently available for a modification of standard. The reasoning behind that has everything to do with different things that could be unique to that operation or different technology that could be present. Any time we write prescriptive LUC, we found that if something happens in the future (technology development, etc.) and the public good is not harmed; we add the ability to consider a modification to standard. The language that outlines waiver criteria can be found on page 3 of the draft code. Member Schmidt asked about the drillable map referred to in public testimony. Is there such a map? Member Carpenter said her notes referred to a mineral rights map and also maps of the aquifer. Kadrich said they do not have maps available tonight with that type of detail. Kadrich said they previously had used maps showing projects using the state’s setback criteria. That criterion was overlaid on the city map to determine what areas would be subject to drilling. She said they do not have that map tonight. Kadrich said what staff is working on is a map that would have that and an overlay for expedited review. She said that map is not available tonight; it has not been made yet. Member Schmidt asked if that map would be used to indicate there would be enough setback to use the expedited review process. Kadrich said what they looked at previously was the result of questions being asked is if you take the state’s setbacks in place today; how does that apply to the city? What area would be subject to potential or future drilling? Under the expedited review, we have a greater setback requirement than the state. Therefore, some have asked the question what area of the City of Fort ATTACHMENT 5 Collins could apply for eligibility for an expedited review. That information has not been put together yet. They plan to share that information with City Council. Member Schmidt said staff (Pierce) had mentioned after work session that most of the drilling goes below the aquifers so that is not a problem with horizontal drilling. Schmidt said for those that mentioned that wells fail; how are those monitored before there’s oil flowing down the street? Pierce said with regard to well casings where they are most likely to fail and affect an aquifer, as you go below ground most of the aquifers or sources of water (500-1,000 feet) are going to be higher and closer to the ground surface than where the hydro carbons are (e.g. 5,000 feet) that they are trying to extract. Pierce said on the vertical portion of the well they have to take the surface casing down below where that aquifer ends so that increases protection for the ground water and aquifer. A lot of emphasis is given to making sure that surface casing is installed properly. She said there are a number of tests that occur to check on the integrity of that seal and that a leak higher up does not impact an aquifer. Member Schmidt asked if older wells (that may have cracks) are inspected on a regular basis or only on an incident basis. Pierce said she does not know the exact inspection requirements for the state but she does know they will not let it go 30 years without ever taking another look. She said there are regular tests like the Bradenhead Test that most operators perform on their surface casings. Member Schmidt asked about a closed system where the wastes are all contained in storage areas and then removed in a responsible fashion. Pierce said when they were talking about closed systems it was mostly in relation to the protection of air quality. When you directly pipe the gas into a sales line with a green completion, you are preventing it from being vented or exposed to the air. Schmidt asked if there are going to be any situations where we’re having hazardous chemicals more frequently trucked on city streets. Pierce said generally the produced water is the largest amount of waste that is taken off site. They do have tank batteries and condensation tanks that store it but at some point it needs to be disposed. It may be trucked off site or it may be trucked to a disposal location. Most often that’s going to be an underground injection control well. That’s a program that’s regulated by COGCC where they permit and operate these facilities. The idea is the waste that is brought up with the hydro carbons is put back into the same area (portions of the formation underground where it originated). Schmidt wondered if we want to say when trucking is required it’s allowed on certain streets and not others. Staff member Lindsay Ex said on the traffic portion of the presentation, they worked with the Traffic and Engineering Departments. A part of the review process (whether expedited or standard) will be to determine where the access routes. Ex said there are designated routes for hazardous materials. Member Schmidt asked staff if they thought the carrot is big enough. Will we get takers on an expedited review? Is the MOU (Memorandum of Understanding) the Operator Agreement as referenced by the Black Diamond representative? Director Kadrich said that is what she would assume. Kadrich said the tools they are trying use are those that other communities who deal with this issue more than Fort Collins. She said they are collecting a number of tools and whether this one (Operator Agreement) is going to draw the most response, she couldn’t say for sure at this point. She said she knows that Boulder County’s goal is to have ½ of their applications go through an expedited review and ½ of them going through a standard review. Kadrich said they’ve tried to approach it as how different it is from the general standard. What have we learned from other operator agreements? What’s happening in the industry and what does staff believe is best to protect the public health and safety of our community? How can we put that together in a process that would make sense for someone to approve outside the Type 2 (Planning and Zoning Board) review. Member Carpenter said there were questions relative to the disclosure of chemicals being used. Is there any place in the state or proposed regulations that requires full chemical disclosure? Staff member Dan Weinheimer said there’s a process that just started this year using website (Frack Focus) – a joint effort of the state and the oil and gas industry. They post information on the chemical constituencies but it ATTACHMENT 5 may not be at the level of detail that some in the community would want. Weinheimer said they are trying to seek more information. Staff member Ex said that would apply in both the expedited or standard process. Member Carpenter asked if there could be anything in the Operating Agreement. Kadrich said yes. Member Carpenter asked about an early detection system. Will the wells have anything like that? Kadrich said there has been some discussion about detection systems at the wells particularly during drilling. Pierce said it depends on the operator and the size of the field. For safety reasons, PIDs (Photo Ion Detectors) and FIDs (Flame Ionization Detectors) are portable devices you can use for detecting a general emissions and volatiles. Carpenter said what’s she’s concerned about is some type of surveillance system for citizens. Pierce said she’s heard people mention that there are affordable on-site surveillance systems. She said her investigations have not found anything cheaper than $250,000 per site for monitoring air quality. If you’re talking about air toxics, the cost would be $500,000 per site. She said they’re open to anything information people may have relative to new technology. Member Stockover asked in the event we hire our own inspectors; is that something they could utilize on a routine basis. Pierce said absolutely. Deputy City Attorney Eckman said relative to the question about notification and chemicals, he referred to page 8 and 9 of the proposed ordinance reference the emergency preparedness plan. He said there are some requirements about coordination with Poudre Fire Authority and the plan on how to react in a dangerous situation. He said paragraph 9 says there should be a provision obligating the operator to have available a current materials safety data sheet for all chemicals used and stored on site. Member Schmidt asked if staff’s had a chance to review the document from Black Diamond, especially Rule 205a Chemical Disclosure citing that we cannot do anything more restrictive than what the COGCC currently has in place. Kadrich said she hasn’t had an opportunity to look at the detailed comments. Member Carpenter asked for clarification on ‘fugitive emissions’. She said under both the standard and expedited process, they would be required to maintain leak detection and repair program or a directed inspection and maintenance program. Does that address concerns raised about leaks and alerts? Pierce said that would be a pollution prevention measure that we are asking operators to use. We’re asking them to spell out their pollution prevention procedures. There are best practices put in place to check release and what you do when you find them. Member Schmidt said she lives by the oil and gas field in northeast Fort Collins and has since 1983 and that oil field has been there since 1923. Years ago we use to have a lot of rotten egg odor. The neighbors would confer on how someone ought to call. She thinks neighborhoods need to have something in place where they know who’s going to report. She referred to public testimony and the comment that the nose detector is one of the fastest ways of knowing something is going wrong. It may be part of the city’s education program. Member Schmidt said it looks like Black Diamond has a lot of issues with what we have in this proposal. She asked Eckman if those things will be worked out. Eckman said the comments that Black Diamond provided on the draft ordinance are really specific and they deserve our review. This is also pending legal review by the City Attorney. The version that goes to City Council may be slightly different from the one being considered by the board but not much. Kadrich said the version on which we received comments looks like an earlier version of the ordinance so there should be another opportunity for them to look at the current version. She agrees with Eckman that they are not prepared to comment on their comments tonight. Chair Smith asked about the practice of abandoning wells in Texas. Specifically to their LUC concern, we do concern ourselves with vacant buildings and big box stores that are causing blight because ATTACHMENT 5 they’ve been unoccupied. Do we have anything in the proposal that deals with that? Eckman said it’s a huge problem in Texas and it costs Texas a lot of money if what’s been reported is true. He thinks part of the solution at the state level is to require bonding when you drill a well if the state would be required to plug an orphaned well. He thinks Colorado has a bonding requirement. Staff indicated yes, the bonding requirement is in place. Kadrich said it’s not a gap they found that needed to be dealt with at the local level. Member Schmidt references the changes made to page 34, paragraph 3 (a) of the draft ordinance. She appreciates they changed the waiver to tie the economic cost and the adversely affect the public health…together. She doesn’t like the idea of a reasonable cost. She thinks that’s too vague. She asked reasonable based on what and thinks it’s too easy to meet the economic problem. She’s just worried that other waiver area is still a little too weak. Chair Smith said he thinks staff is talking about waiving the standard will not adversely public health, safety, welfare and the environment. Unless he doesn’t understand, that’s in the mind of the decision maker. Member Carpenter said she agrees with that—somehow we need to make that a little bit more stringent. A reasonable cost to one person may not be reasonable to another; she’s not sure how you define that. Chair Smith wondered how the board wanted to process the new/recently received materials. Did they want a 10 minute recess? Member Carpenter said the Black Diamond letter is a relatively hefty document received at the last minute. Member Stockover said he’s in agreement with member Carpenter, the materials presented tonight were not given to them with enough time to thoroughly analyze. He thinks we’re far enough down the path to make a recommendation. The new information could be forwarded to City Council and they could consider it before they act upon the board’s recommendation. Stockover felt fairly confident we have enough information to consider. Member Schmidt said she feels the same way given we’re supposed to make a recommendation on two general areas – dual tracks and adoption of the proposed standards. Since this is all pending legislation, it’s her feeling they could make a general recommendation. This ordinance could be a good first step but it needs to be supplemented. Deputy City Attorney Paul Eckman said one thing that’s not in the ordinance that will be added is in the expedited development review where the Director makes the decision (without a hearing); there is an application submitted, staff advise, there is an opportunity for the public to provide written comments so if the decision is appealed to District Court then there would be a good record for the court to review. There will also be language for the Director to make a detailed finding. Member Schmidt asked why it would not be appealed to City Council. Eckman said the idea with expedition is to take that step out. Member Campana said it’s pretty easy to get sucked into wordsmithing this ordinance. He thinks it’s still in draft form. He thinks staff has done a great job in the time they’ve been given. Clearly this is not a finished document. Campana appreciates all the comments and letters that have been received. He thinks he has enough information to be ready to offer a recommendation to City Council. He suggested a term should be added related to geographic specific best practices. Also, not understanding the industry he’s not sure it’s even something they might want. He believes it (the operator agreement) gives us the least amount of staff comment/public input. He thinks the expedited process gives us the most ‘teeth’ but not knowing enough about the industry, he doesn’t know which way an applicant might go. Based on his experience on the Advisory (Oil and Gas) Committee; he thinks staff has done a very good job of pulling together a plan for what could potentially be 17,000 wells. It’s good work. Member Stockover said this is an issue that is way bigger than Fort Collins. We’d be a very elitist society if we said we’ll burn your oil and gas in our cars and homes but we don’t want anything to do with producing it. He said we need to share this issue wholly as a nation not just as a community. He thinks ATTACHMENT 5 we are doing something and we may not have it exactly right but at least we have people coming down and voicing opinions. Stockover said Fort Collins is not a big oil and gas producing community so we need to keep the bigger picture in mind. He said he thinks our job is really just getting starting and pushing it up to the county and state level. He thinks we’re doing the right thing by acting out of awareness. He thinks we’ve had a great amount of research and discussion and we’re taking this very seriously. He said we always have the ability to tweak what we have when we discover something is not right. He thinks it’s more a Colorado than a Fort Collins issue. Member Schmidt said she agrees with some of what Member Stockover said. She said she just feels in general that staff has done a good job of trying to get down to the nitty-gritty and to cover all the bases. She thinks the board’s role as this document changes is to give City Council general guidance in their recommendation. From her perspective, the two tier approach sounds fine with the caveat that we don’t weaken the development review so there are no teeth in the standard review. She’d also like to see neighborhood notification include the posting of an “oil drilling possible here” sign. They could look on a website to see what’s going on. Director Kadrich said Member Schmidt has raised a key issue in her comments. She said the expedited review is a voluntary process. It is not a prescriptive process. Schmidt said her biggest worry is the operating agreements and it may be from her previous position on CAG (Citizen Advisory Group). When the city was just starting with TIF (tax increment financing), some of their first agreements were not very good. She’d hope we really do look at best practices and we have good idea of what is a good agreement so that we don’t have a few bad ones in our learning curve. Member Carpenter said in a way the whole thing is a little odd to be talking about. The problems we’d have (she agrees with many of the things stated tonight during public testimony) are air and water quality. We can’t stop the air at the Fort Collins boundaries. She agrees with Member Stockover in that what really needs to happen here is we need to be talking at the county, state, and federal level to get the regulations that we want. She said what we’ve done here is to do the best we can given a difficult situation. She thinks it’s a good start. She agrees with Member Schmidt in that we do need to send things to City Council. She thinks the Operator Agreements are going to be very important and they should be done well. She would like to encourage the people who came to speak tonight to take their message to their governor, congressman, and president. She said we can talk about aesthetics in Fort Collins. The rest of it is at a different level then where we are. She appreciates the work done by staff. She thinks we’ve come up with the best practice we can come up with for our city. Member Schmidt said as a part of their recommendation, we can encourage City Council to actively work with the county and the state. She’d like to see them proactive in that area to express the concerns of citizens. She does think the city should have an intergovernmental agreement with the county covering at least any land in the GMA (Growth Management Area). Without it we may be annexing problems we really don’t want to have. Chair Smith said he agrees and that is something they talked about last work session. We’d like to have the county agree to what our definitions of development (with regard to oil and gas) are. Member Carpenter said one of the strongest pieces of this proposal is the local government designee to facilitate communications between City Council and the state. Member Campana wondered why we have an operating agreement as an option. Director Kadrich said as staff looked at what best practices across the Front Range and within the State of Colorado, operator agreement came up as a positive way to deal with oil and gas regulations in some communities. Staff wanted to have it available as one of the tools that they could offer to City Council. She doesn’t recall it ATTACHMENT 5 ever being a part of a LUC process. It would be a direct agreement between the governing body and the operator. Campana said that’s a little confusing in that we’re saying it’s a land use issue and other times it can or cannot be. He thinks it’s a land use concern and it should be LUC. He thinks it’s difficult to make the argument both ways. Member Schmidt asked how neighborhood complaints are handled in an operating agreement scenario. Weinheimer said in Windsor they don’t have any local regulations; it’s all operator agreement. You would complain to the state. Schmidt asked if the agreements are filed with the COGCC. Weinheimer said they are retained at a local level (not filed with the state). It would be a responsibility at the local level to make sure the conditions are put forward on each permit. Once they’re on the permit, as long as the COGCC has enforcement authority, they will enforce the permit. Member Campana asked if the standard review is aligned with state regulations. Eckman said with the standard process review, yes. Campana said his opinion is there not be an operator agreement. He recommended we do away with it and have only the standard and expedited review. Chair Smith said he thinks it should be included for Council consideration. Eckman said an operator agreement is an agreement between the city and the operator. It could go beyond what the state requires. Eckman said he thinks may operators feel comfortable with an operator agreement and so that has been an option we have offered. It puts the question before City Council as to whether the operator agreement that was negotiated between the operator and staff is acceptable. It could be more or less stringent than the LUC. Member Carpenter asked if it could be less stringent than the state regulations. Eckman said no, the state regulations will always be followed. Member Schmidt said it could be a mechanism that could be advantageous for the city. She said they could faith in staff to negotiate the best situation by making sure situations unique to an application are addressed. She said it could be a bigger carrot than the expedited review. Chair Smith said he does have a lot of concerns but he believes the ‘game’ is changing –changing technology that we will be facing as a city and the community. He said we will have a lot of conversations and observations about oil and gas in the State of Colorado going forward. More of his concerns are probably best dealt in areas outside this Board’s purview so he won’t even air those concerns as it would taint what he needs to do here. Smith said at the worksession they discussed the possibility of getting frequent (monthly) updates from staff – how many projects we’ve looked at, how many applicants we’ve talked to, what’s working, what’s not working. If we’re tracking …whatever comes from the City Council side, we would have the ability to keep tabs on it. He said they could visit in worksession what those metrics would be on their ‘dashboard and at what point frequency of reporting could be lessened. Chair Smith said he’d like to make sure the city has a very strong voice with the county and at the State House. He said based on the Board’s very specific purview, that staff has done a good job. They’ve been creative in order to accomplish some community objectives that are sensitive to both what industry wants and to what our community demands. He could probably say yes to both questions posed by staff (Does P&Z recommend the adoption of the proposed standards for oil and gas operations? Does P&Z recommend the adoption of a dual track (Standard vs. Expedited Review for oil and gas operations?) with the caveat that we monitor. Member Schmidt made a motion that the Planning & Zoning Board supports the concept of a dual track in the Land Use Code for evaluating for oil and gas operations. Member Campana seconded the motion. Member Stockover thought we’ve firmly put this on the radar for the powers that be and that is a good thing. He’ll be supporting it. ATTACHMENT 5 Motion was approved 5:0. Member Schmidt made a motion that the Planning and Zoning Board recommendation encourages the county to consider oil drilling as a land development issue within the Growth Management Area (GMA) with the associated referral to the city for their review. Member Campana seconded the motion. Member Campana said he supports it in concept because he doesn’t consider oil and gas exploration a development. Chair Smith said to be real specific we could probably pursue through the existing IGA an amendment or whatever is needed for the county to recognize their definition of oil and development more closely fits ours thus triggering the referral process. Member Schmidt said she doesn’t know how specific we can be because she doesn’t know how open the county will be. She certainly wants the city to explore it but she wanted to give staff the latitude when starting the discussion. Chair Smith said that’s the ‘meat’ of his concern. Member Stockover asked Eckman if we didn’t already have that. If passed as an ordinance, wouldn’t we already have that in our IGA? Eckman said no; it would only apply within city limits. Deputy City Attorney Eckman said we are working to some extent with other municipalities within the county to approach this policy in a uniform fashion. He said to the extent we can get some energy behind that, we could approach the county and ask them to join that effort. Member Schmidt said when we’re looking at the GMA because in theory that is the area the city will eventually annex. She thinks it’s very important that we get review. It would be good to have a referral process. Deputy Director Kadrich said the county does not currently have a development review process for oil and gas exploration so the applicant would work with the Colorado Oil and Gas Commission if they want to drill in the county. Kadrich said they county would receive notice from the state that an application has been filed but they do not have a land use code process that applicant would be required to submit. Chairsubmit. Chair Smith said he thinks that would be equitable and fair (given the process for other development in the county) and he would hope the county would respond specifically and favorably to this request. Deputy City Attorney Eckman said the city defines oil drilling as development so if we can persuade the county that they should agree with us that it is development and if it is development contiguous to the city then under our present Intergovernmental Agreement (IGA) that land should be annexed into the city and the oil operation should be processed through our LUC like any other development would be. Member Schmidt would like to amend her motion to encourage the county to consider oil drilling as a land development within the GMA as land development issue (and it was incorporated above). Member Campana seconded the amendment. Motion was approved 5:0. Member Schmidt said as to staff’s other question about the recommendation to adopt a dual track (standard vs. expedited review for oil and gas operations); she’d like to make a motion. Member Schmidt said since the proposed standards are subject to additional review and changes, the Planning and Zoning Board agrees with the direction of the proposed standards for oil and gas operations and encourages the maintenance of transparency with citizens and the seeking of regulations that are as focused as possible on maintaining the health, safety, and welfare of the citizens. ATTACHMENT 5 Member Stockover said he thought we just need a yes or no to the recommendation. He thinks the motion is too interpretive. Do we recommend the adoption or not? Chair Smith said he agrees with Member Stockover that we recommend the adoption of the proposed standards because they are very clear. If there are specific changes, we might want to say that-- we’d want to modify. Member Schmidt said to say we recommend the adoption of the proposed standards when the proposed standards are going to go through changes as they look at the Black Diamond comments and other pending legal review; that’s like putting a rubber stamp on something she doesn’t even know what it ultimately will be. She wants to encourage the direction that staff is going but their language is subject to change. Member Carpenter seconded the motion. Chair Smith said Member Schmidt made a good point about the recommendation changing a bit. Maybe that just let’s Council know why we didn’t say yes or no. Member Schmidt said we could amend the motion at the beginning, adding “since the proposed standards are subject to additional review and changes, the Planning and Zoning Board recommends…” Director Kadrich asked if the board could be more specific (as the regulations are 40 pages long) in saying if you generally support this type of regulation in the LUC. That would be easier for the board and staff to understand than the more general language if the board said they are 90 or 95% there with this proposed draft. Member Schmidt said speaking for herself if staff were to go along with every bit of Black Diamond’s feedback; she thinks the whole thing would be gutted. Schmidt said she really supports the direction staff has gone so far especially with the two tiered track. It adheres as best we can within the state regulations to making sure we’re looking out for the health and welfare of citizens. She thinks that has been the goal of staff and as the changes go forth, she’d like to staff to keep that in mind. Director Kadrich said maybe she’s worrying too much about what the Planning and Zoning Board means when they made this recommendation. Kadrich said what was just said has made it clearer to her. Member Carpenter said she thinks we agree with what they’ve been given by staff. Chair Smith said provided any changes do not weaken the regulations being proposed, we’d support it. Member Schmidt suggested we change the motion to say “we support the oil and gas regulations as long as any changes made in these final processes do not significantly change or weaken the regulations”. Chair Smith said if the final draft was something, in their opinion, significantly different; we could go to the City Council meeting and read something into the record. Member Stockover said if it was not a formally adopted Board position, we’d have to act as individuals. Member Campana said he likes the original motion. Member Schmidt withdrew her motion. Member Carpenter made a motion that the Planning and Zoning Board recommend to City Council the adoption of the ordinance amending the Land Use Code pertaining to oil and gas exploration and production regulations provided no changes weaken or substantially change the document. Member Schmidt asked to make a friendly amendment that the Board recommends the adoption of the ordinance provided no subsequent changes weaken or substantially change the regulations. Carpenter said she accepts the friendly amendment and it was incorporated above. ATTACHMENT 5 Member Schmidt seconded the motion. Deputy City Attorney Eckman asked if the Board would be allowing staff to make changes that had been suggested regarding public input for the basic process and the neighborhood meeting for the operator agreement. Member Schmidt said yes. She said so long as there are not a lot of changes that would weaken it; Council should know the Board may not have the same level of support. Motion was approved 5:0. Other Business: None The meeting was adjourned at 10:00 p.m. Laurie Kadrich, CDNS Director Andy Smith, Chair ATTACHMENT 5 1 Establishing an Oil and Gas Moratorium and Reciprocal Setbacks for New Residential Developments Laurie Kadrich Director, Community Development & Neighborhood Services Lindsay Ex Senior Environmental Planner Dan Weinheimer Policy and Project Manager July 16, 2013 Council Meeting ATTACHMENT 6 2 Items for City Council Consideration: 1. Does Council support a establishing a moratorium? If so, which option? • Option #1: Establish for 7 years, apply to Prospect Energy and conduct a health impact study, exclude City-owned lands, or • Option #2: Establish until December 31, 2013 in order to re-evaluate Land Use Code (LUC) changes, engage the community in the LUC options and codify any recommendations. 3 Items for City Council Consideration: 2. Should the Land Use Code be amended to require residential buffering and set-backs from existing oil and gas operations? 4 Item #1: Ordinance No. 145, 2012: Expires July 31, 2013 • Has provided time to: – Participate in state rule-making processes – Adopt local regulations prohibiting hydraulic fracturing except under certain conditions – Adopt local regulation prohibiting permanent storage of waste materials – Adopt an Operator Agreement with Prospect Energy that exceeds general standards of operations – Draft local regulations for reciprocal set-backs and disclosure requirements 5 Item #1: Ordinance No. 145, 2012: Expires July 31, 2013 • Hasn’t provided time to: – Properly investigate, develop, and if appropriate adopt and implement local regulations, specifically LUC amendments or – Engage the public, other agencies and local boards in reviewing any changes that may be proposed 6 Item #2: Why is this needed? • Citizens have expressed concerns • State regulations do only address set- backs for new oil and gas operations • City regulations only address mitigating impacts when developments are within 50’ of existing industrial land uses 7 Item #2: What is proposed? • Tiered approach • Within 1000’ – Disclosure required • 350-500’ – Fencing – Screening • Less than 350’ – Modification of Standard required 8 Item #2: Recommendation • Planning and Zoning Board – Unanimous recommendation for the Land Use Code amendments discussed during their November 1, 2012 meeting – Set-backs and buffering were discussed in the broader context of Land Use Code regulations 9 Items for City Council Consideration: 1. Does Council support a establishing a moratorium? If so, which option? • Option #1: Establish for 7 years, apply to Prospect Energy and conduct a health impact study, exclude City-owned lands, or • Option #2: Establish until December 31, 2013 in order to re-evaluate Land Use Code (LUC) changes, engage the community in the LUC options and codify any recommendations. 10 Items for City Council Consideration: 2. Should the Land Use Code be amended to require residential buffering and set-backs from existing oil and gas operations? OPTION 1 - SEVEN YEAR MORATORIUM -1- ORDINANCE NO. 106, 2013 OF THE COUNCIL OF THE CITY OF FORT COLLINS ESTABLISHING 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 OF FORT COLLINS FOR A PERIOD OF SEVEN YEARS WHEREAS, the City Council recognizes that the oil and gas industry is one of many industries which may legitimately operate within the boundaries of the City, and also recognizes the importance of minimizing, through appropriate regulation, the adverse impacts that oil and gas exploration and extraction or any other industry may have on the health, safety, and welfare of the City and its citizens; and WHEREAS, there has been growing interest in the exploration of oil and gas resources underlying portions of the City, including property owned by the City; and WHEREAS, oil and gas exploration, extraction, production, transportation and related operations and activities, including, without limitation, all those oil and gas activities regulated by the Colorado Oil and Gas Conservation Commission (collectively AOil and Gas Uses@) may negatively impact Fort Collins citizens and the use and integrity of local water supplies and water infrastructure, air quality, roads and transportation infrastructure, wastewater infrastructure, land resources, wildlife and aesthetic values; and WHEREAS, the health and safety issues presented by the exploration for and extraction of liquid and gaseous hydrocarbon resources and related activities have not been adequately explored and it is imperative that those issues be studied by the City, particularly as they relate to the potential for deleterious health and safety effects that may be caused by hydraulic fracturing, to determine whether existing state and local regulations are sufficient to protect the public health, safety, and welfare, or whether different or additional regulations are necessary to address the impacts of such activities; and WHEREAS, if land use applications, permit applications, or any other applications for Oil and Gas Uses are approved within the City limits before City staff and the City Council have an opportunity to thoroughly examine the impact of such uses and take all steps necessary to protect the public health, safety, and welfare, irreparable harm may be done to the residents of the City; and WHEREAS, municipalities throughout Colorado are struggling to address the potential adverse impacts of proliferating Oil and Gas Uses in urban and suburban environments on their citizens= health, safety, and welfare, and several municipalities have enacted moratoria to allow a period of time to evaluate those impacts of Oil and Gas Uses in order to assess and determine the appropriate local regulation of such; and OPTION 1 - SEVEN YEAR MORATORIUM -2- WHEREAS, by Ordinance No. 145, 2012, the City Council imposed a seven-month 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 and within any City-owned parks or natural areas outside of the City limits that are open to the public, except for maintenance operations on existing wellheads; and WHEREAS, said seven-month moratorium was not sufficient to allow City staff and the City Council the time needed to further investigate the health and safety issues presented by oil and gas exploration and production activities, including hydraulic fracturing; and WHEREAS, the City Council anticipates that the Colorado Department of Public Health and Environment will be undertaking a comprehensive study of the impacts of oil and gas exploration and production on human health which will likely take at least five years to complete, and the State legislature may also be undertaking its own multi-year study of such impacts; and WHEREAS, the City Council has determined that a moratorium extending through December 31, 2019, is a reasonable period of time and is no longer than necessary for the City to gather additional information regarding the health and safety impacts of oil and gas exploration and production activites, including hydraulic fracturing, and to determine the extent to which Oil and Gas Uses may be locally regulated, and to properly investigate, develop, and, if appropriate, adopt and implement any local regulations related to Oil and Gas Uses in Fort Collins in order to protect and preserve the public=s health, safety and welfare. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the preceding recitals contained in this Ordinance are hereby adopted and incorporated by reference as findings of fact of the City Council. Section 2. That the City Council further hereby finds as follows: a. That the submittal of land use applications, permit applications, or applications requesting approval to conduct oil and gas exploration, extraction, and related operations and activities within the City limits may be imminent, and that the City=s existing regulations in this area do not adequately take into consideration current industry technologies so as to properly mitigate the impacts of these types of activities, to protect and preserve the public health, safety, and welfare. b. That a moratorium until midnight December 31, 2019, on the acceptance or processing of any land use application, permit applications, or any other application requesting approval to conduct oil and gas exploration, extraction, and related operations and activities within the City limits is necessary and reasonable for the purpose of studying the impacts of these types of uses, including the impacts caused by hydraulic fracturing on the health and safety of City OPTION 1 - SEVEN YEAR MORATORIUM -3- residents and for the purpose of determining whether additional land use and zoning regulations are necessary to protect and preserve the public health, safety, and welfare. Section 3. That, to address this situation, there is hereby imposed, as of the effective date of this Ordinance, a moratorium on the acceptance or processing of any land use application, permit application, or any other application requesting approval to conduct an Oil and Gas Use within the City limits; provided, however, that this moratorium shall not apply to applications to conduct maintenance operations on oil and gas wells existing in the City as of the effective date of this Ordinance. This moratorium shall terminate as of midnight December 31, 2019, or on such earlier date as may be established by the City Council by ordinance. Section 4. That this Ordinance shall control over any conflicting ordinance of the City, but only to the extent of the conflict. Section 5. That if any section, paragraph, sentence, clause or phrase of this Ordinance is held to be unconstitutional or invalid for any reason, such decision shall not affect the validity or constitutionality of and shall be severable from the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each part or parts hereof irrespective of the fact that any one part or parts may be declared unconstitutional or invalid. Introduced, considered favorably on first reading, and ordered published this 16th day of July, A.D. 2013, and to be presented for final passage on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: OPTION 1 - SEVEN YEAR MORATORIUM -4- _____________________________ City Clerk OPTION 2 - EXTEND MORATORIUM TO DECEMBER 31, 2013 ORDINANCE NO. 107, 2013 OF THE COUNCIL OF THE CITY OF FORT COLLINS ESTABLISHING 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 OF FORT COLLINS UNTIL MIDNIGHT, DECEMBER 31, 2013 WHEREAS, the City Council recognizes that the oil and gas industry is important to the Fort Collins community, and also recognizes the importance of minimizing, through appropriate regulation, the adverse impacts that oil and gas exploration and extraction or any other industry may have on the health, safety, and welfare of the City and its citizens; and WHEREAS, there has been growing interest in the exploration of oil and gas resources underlying portions of the City, including property owned by the City; and WHEREAS, oil and gas exploration, extraction, production, transportation and related operations and activities, including, without limitation, all those oil and gas activities regulated by the Colorado Oil and Gas Conservation Commission (collectively AOil and Gas Uses@) may negatively impact Fort Collins citizens and the use and integrity of local water supplies and water infrastructure, air quality, roads and transportation infrastructure, wastewater infrastructure, land resources, wildlife and aesthetic values; and WHEREAS, the health and safety issues presented by the exploration for and extraction of liquid and gaseous hydrocarbon resources and related activities may not be adequately addressed in the City's zoning and land use regulations and it is imperative that those regulations be reviewed in light of current regulatory best management practices consistent with the Colorado Oil and Gas Conservation Commission (ACommission@) Rules and with industry technologies to determine whether they are sufficient to protect the public health, safety, and welfare, or whether different or additional regulations are necessary to address the impacts of such activities; and WHEREAS, if land use applications, permit applications, or any other applications for Oil and Gas Uses are approved within the City limits before City staff and the City Council have an opportunity to thoroughly examine the impact of such uses and take all steps necessary to protect the public health, safety, and welfare, irreparable harm may be done to the residents of the City; and WHEREAS, municipalities throughout Colorado are struggling to address the potential adverse impacts of proliferating Oil and Gas Uses in urban and suburban environments on their citizens= health, safety, and welfare, and several municipalities have enacted moratoria to allow a period of time to evaluate those impacts of Oil and Gas Uses in order to assess and determine the appropriate local regulation of such; and OPTION 2 - EXTEND MORATORIUM TO DECEMBER 31, 2013 -2- WHEREAS, by Ordinance No. 145, 2012, the City Council imposed a seven-month 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, except for maintenance operations on existing wellheads; and WHEREAS, by Ordinance No. 057, 2013, the City Council terminated the moratorium with regard to all oil and gas operations conducted by Prospect Energy, LLC, as long as such operations are conducted in accordance with the terms and conditions of that certain Oil and Gas Operator Agreement between Prospect Energy and the City, dated May 29, 2013; and WHEREAS, said moratorium will expire at midnight, July 31, 2013; and WHEREAS, although City staff has been diligently researching best practices in this area and has prepared proposed new regulations, additional research and review are necessary in order for the City Manager and City Attorney and their respective staffs to clarify the extent of the City=s legal authority with regard to local regulation of such Oil and Gas Uses and to formulate any recommended amendments to the City Code to deal with those uses in an appropriate manner; and WHEREAS, the Commission has engaged in a rule making proceeding that resulted in new regulations being established; and WHEREAS, in preparing its regulations, the City should consider the new rules that have been promulgated by the Commission; and WHEREAS, for the foregoing reasons, the imposition of said seven-month moratorium on the submission, acceptance, consideration, and approval of any and all applications for City licenses, permits and other approvals related in any way to Oil and Gas Uses within the City, except on existing well heads, will not allow sufficient time for City staff and the City Council to further investigate the extent of the City=s authority to regulate such uses, to consider any new regulations adopted by the Commission, and to develop and implement appropriate regulations; and WHEREAS, the City Council has determined that a moratorium extending through December 31, 2013, is a reasonable period of time and is no longer than necessary for the City to determine the extent to which Oil and Gas Uses may be locally regulated and to properly investigate, develop, and, if appropriate, adopt and implement any local regulations related to Oil and Gas Uses in Fort Collins in order to protect and preserve the public=s health, safety and welfare; and WHEREAS, existing Oil and Gas Uses in Fort Collins will not be unduly prejudiced by the imposition of such a moratorium, since the ongoing operation of such uses will not be prohibited or terminated by this moratorium; and OPTION 2 - EXTEND MORATORIUM TO DECEMBER 31, 2013 -3- NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the preceding recitals contained in this Ordinance are hereby adopted and incorporated by reference as findings of fact of the City Council. Section 2. That the City Council further hereby finds as follows: a. That the submittal of land use applications, permit applications, or applications requesting approval to conduct oil and gas exploration, extraction, and related operations and activities within the City limits may be imminent, and that the City=s existing regulations in this area do not adequately take into consideration current industry technologies so as to properly mitigate the impacts of these types of activities and protect and preserve the public health, safety, and welfare. b. That a moratorium until midnight December 31, 2013, on the acceptance or processing of any land use application, permit applications, or any other application requesting approval to conduct oil and gas exploration, extraction, and related operations and activities within the City limits, is necessary and reasonable for the purpose of studying the impacts of these types of uses and the new rules promulgated by the Colorado Oil and Gas Conservation Commission, and determining whether additional land use and zoning regulations are necessary to protect and preserve the public health, safety, and welfare. Section 3. That, to address this situation, there is hereby imposed, as of the effective date of this Ordinance, a moratorium on the acceptance or processing of any land use application, permit application, or any other application requesting approval to conduct an Oil and Gas Use within the City limits; provided, however, that this moratorium shall not apply to applications to conduct maintenance operations on oil and gas wells existing in the City as of the effective date of this Ordinance or to any operations conducted under the permission and authority of that certain Amended Operation Agreement between the City and Prospect Energy, LLC dated May 29, 2013. This moratorium shall terminate as of midnight December 31, 2013, or on such earlier date as may be established by the City Council by ordinance. Section 4. That this Ordinance shall control over any conflicting ordinance of the City, but only to the extent of the conflict. Section 5. That if any section, paragraph, sentence, clause or phrase of this Ordinance is held to be unconstitutional or invalid for any reason, such decision shall not affect the validity or constitutionality of and shall be severable from the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance and each part hereof irrespective of the fact that any other parts may be declared unconstitutional or invalid. OPTION 2 - EXTEND MORATORIUM TO DECEMBER 31, 2013 -4- Introduced, considered favorably on first reading, and ordered published this 16th day of July, A.D. 2013, and to be presented for final passage on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk 1 ORDINANCE NO. 108, 2013 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING THE CITY OF FORT COLLINS LAND USE CODE TO INCLUDE ADDITIONAL REGULATIONS FOR DEVELOPMENT IN CLOSE PROXIMITY TO OIL AND GAS OPERATIONS WHEREAS, oil and gas operations have existed within City limits for many years; and WHEREAS, the Land Use Code contains residential setback requirements from existing oil and gas operations that are inconsistent with statewide setback regulations; and WHEREAS, the City Council has determined that the Land Use Code should be amended to increase residential setbacks from existing oil and gas operations to comport with the setback requirements promulgated by the Colorado Oil and Gas Conservation Commission in order to better protect the public health and safety of residents in close proximity to oil and gas operations; and WHEREAS, the proposed regulations require that notice be given to residents and potential buyers of existing oil and gas operations, that fencing to restrict access to the existing operation be provided, and that aesthetic improvements including trees, shrubs, berms, and walls be made so as to further enhance the public health, safety and welfare; and WHEREAS, after extensive public input has been received and upon the favorable recommendation of the Planning and Zoning Board, the City Council has determined that it is in the best interest of the City that these proposed amendments be adopted. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That Section 3.8.26(C)(2) of the Land Use Code is hereby amended to read as follows: (2) There are three (3)four (4) types of buffer yards which are established according to land use intensity as described in Chart 1 below. Buffer yard distances are established in Chart 2 below and specify deciduous or coniferous plants required per one hundred (100) linear feet along the affected property line, on an average basis. Section 2. That Section 3.8.26(C) of the Land Use Code is hereby amended by the addition of a new subparagraph (4) which reads in its entirety as follows: (4) Additional Standards Applicable to Buffer Yard D. The following requirements shall also apply to development located in Buffer Yard D: (a) Measured. For purposes of Buffer Yard D standards, the buffer yard shall be measured as the distance from the outer edge of an 2 existing oil and gas operation site to the nearest wall or corner of any occupied building proposed in the residential development. The term “existing oil and gas operation site” shall include the impact area of any well that has received all required permits prior to submission of the residential development plan, even if drilling has yet to occur on the site. Buffer Yard D areas may include paved areas, notwithstanding subsection (1) above. (b) Disclosure. If any residential development is proposed to be located within one thousand (1,000) feet of an existing oil and gas operation, then at such time as the developer or any subsequent interest holder in the development transfers any proprietary or possessory interest in all or any portion of the development, the person or entity transferring such interest shall provide to the transferee a disclosure statement on a form provided by the City, which statement shall provide information about the potential emission of any hazardous, toxic, or carcinogenic air pollutants associated with oil and gas operations and the health effects associated with such emissions; including, but not limited to, hydrogen sulfide, sulfur dioxide, nitrogen oxides, volatile organic compounds, benzene, toluene, xylenes, and formaldehyde. The disclosure statement shall also include contact information for the oil and gas operator. (c) Fencing. If any residential development is proposed to be located within five hundred (500) feet of an existing oil and gas operation, and if an existing fence does not surround the oil and gas operation, a fence must be erected by the developer along the property boundary between the oil and gas operation and the development that restricts public access to the oil and gas operation. Section 3. That Chart 1 contained in Section 3.8.26 of the Land Use Code is hereby amended to read as follows: 3 Chart 1 Land Use Intensity Categories Land Use Intensity Category Buffer Yard Airports/airstrips Very High C Composting facilities High B Dry cleaning plants Very High C Feedlots Very High C Heavy industrial uses Very High C Light industrial uses High B Junkyards High B Outdoor storage facilities High B Recreation vehicle, boat, truck storage Medium A Recycling facilities High B Agricultural research laboratories High B Resource extraction Very High C Oil and gas operations, including plugged and abandoned wells Very High D Transportation terminals (truck, container storage) High B Warehouse & distribution facilities High B Workshops and custom small industry Medium A Section 4. That Chart 2 contained in Section 3.8.26 of the Land Use Code is hereby amended to read as follows: 4 Chart 2 Buffer Yard Types Type – Base Standard (plants per 100 linear feet along affected property line)* Option Width Plant Multiplier** Option: Add 6' Wall Option: Add 3' Berm or 6' Fence Buffer Yard A: 3 Shade Trees 2 Ornamental Trees or Type 2 Shrubs*** 3 Evergreen Trees 15 Shrubs (33% Type 1, 67% Type 2) 15 feet 20 feet 25 feet 30 feet 35 feet 40 feet 1.00 .90 .80 .70 .60 .50 .65 .80 Buffer Yard B: 4 Shade Trees 4 Ornamental Trees or Type 2 Shrubs*** 3 Evergreen Trees 25 Shrubs (Type 2) 15 feet 20 feet 25 feet 30 feet 35 feet 40 feet 45 feet 1.25 1.00 .90 .80 .70 .60 .50 .75 .85 Buffer Yard C: 5 Shade Trees 6 Ornamental Trees or Type 2 Shrubs *** 4 Evergreen Trees 30 Shrubs (Type 2) 5 Section 6. That the definition “Resource extraction, process and sales” contained in Section 5.1.2 of the Land Use Code is hereby amended to read as follows: Resource extraction, processes and sales shall mean removal or recovery by any means whatsoever of sand, gravel, soil, rock, minerals, mineral substances or organic substances other than vegetation, from water or land on or beneath the surface thereof, exposed or submerged., but does not include oil and gas operations. Introduced, considered favorably on first reading, and ordered published this 16th day of July, A.D. 2013, and to be presented for final passage on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 20th day of August, A.D. 2013. _________________________________ Mayor ATTEST: _____________________________ City Clerk 20 feet 25 feet 30 feet 35 feet 40 feet 45 feet 50 feet 1.25 1.00 .90 .80 .70 .60 .50 .75 .85 Buffer Yard D: 6 Shade Trees 7 Ornamental Trees or Type 2 Shrubs*** 5 Evergreen Trees 35 Shrubs (Type 2) 350 feet 375feet 400 feet 425 feet 450 feet 475 feet 500 feet 1.25 1.00 .90 .80 .70 .60 .50 .75 .85 * "Base standard" for each type of buffer yard is that width which has a plant multiplier. ** "Plant multipliers" are used to increase or decrease the amount of required plants based on providing a buffer yard of reduced or greater width or by the addition of a wall, berm or fence. *** Shrub types: Type 1: 4' - 8' High Type 2: Over 8' High Section 5. That Section 5.1.2 of the Land Use Code is hereby amended by the addition of following new definitions which read in their entirety as follows: Oil and gas operation shall mean exploration for oil and gas, including the conduct of seismic operations and the drilling of test bores; the siting, drilling, deepening, recompletion, reworking, or abandonment of an oil and gas well, underground injection well, or gas storage well; production operations related to any such well including the installation of flow lines and gathering systems; the generation, transportation, storage, treatment, or disposal of exploration and production wastes; and any construction, site preparation, or reclamation activities associated with such operations. COLLINS PARTICULAR MAKES PURPOSE, NO WARRANTY EXPRESSED OF MERCHANTABILITY OR IMPLIED, WITH OR RESPECT WARRANTY TO THESE FOR FITNESS MAP PRODUCTS OF USE FOR OR THE UNDERLYING FAULTS, and assumes DATA. Any all responsibility users of these of map the use products, thereof, map and applications, further covenants or data, and accepts agrees them to hold AS the IS, City WITH harmless ALL from made and this against information all damage, available. loss, Independent or liability arising verification from any of all use data of contained this map product, herein should in consideration be obtained of by the any City's users having of these liability, products, whether or direct, underlying indirect, data. or consequential, The City disclaims, which and arises shall or not may be arise held from liable these for any map and products all damage, or the loss, use thereof or by any person or entity. 0 0.25 0.5 0.75 Printed: June 26, 2013 Miles © Existing Wells # Inactive # Shut-in # Active Fort Collins Field Within 500 ft buffer - Fencing, screening also required Within 1000 ft buffer - Disclosure required Neighborhoods City Limits Growth Management Area ATTACHMENT 4