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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 08/14/2012 - OIL AND GAS EXTRACTION REGULATION UPDATEDATE: August 14, 2012 STAFF: Dan Weinheimer Pre-taped staff presentation: available at fcgov.com/clerk/agendas.php WORK SESSION ITEM FORT COLLINS CITY COUNCIL SUBJECT FOR DISCUSSION Oil and Gas Extraction Regulation Update. EXECUTIVE SUMMARY City Council has directed staff to present options to regulate oil and gas exploration and recommend ways to mitigate the impacts on the community. Staff will present an update on actions to date, lessons learned, non-regulatory options, and seek Council direction regarding potential regulations. Non-regulatory options identified to date include executing an intergovernmental agreement with state regulators to give the City well site inspection authority, petitioning to protect parks and natural areas, developing robust internal and public processes, and negotiating surface use agreements with operators. Regulatory options identified include Land Use Code changes to ensure public protection and City Code changes to define a local permitting process. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Which options do City Council want staff to pursue? 2. What specific areas would City Council like staff to address in developing regulations? 3. Is the public engagement program sufficient? 4. Is the proposed timeline acceptable? BACKGROUND / DISCUSSION Fort Collins is reviewing and updating its land use regulations concerning oil and gas exploration and extraction within the City’s Growth Management Area. This project has involved a significant amount of research, public input and staff education. A multidisciplinary staff team has engaged community stakeholders, environmental groups and the oil and gas industry in order to develop community regulations. The team has met with staff from the State’s regulatory body, toured select operations in the City of Greeley with local officials, and reached out to professors from Colorado State University. Staff’s understanding of the oil and gas extraction process and regulatory options available to Fort Collins has increased exponentially in the course of this research. August 14, 2012 Page 2 An informative website has been created for residents to learn about oil and gas activity and the City’s regulations. The page is available at www.fcgov.com/oilandgas and includes contact information for the Local Government Designee (LGD) and links to relevant presentations, studies and articles. The LGD receives notice of permit activity and can represent City concerns to State regulators during permitting, drilling, and the ongoing production phases of oil and gas operations. An Oil and Gas Regulations Advisory Committee made up of members of City of Fort Collins boards was formed to consider the community impacts from the oil and gas extraction process. Each board self-selected two members to participate in several meetings aimed at assisting staff in developing regulations. The Committee is made up of members from the following boards: Water Board, Natural Resources Advisory Board, Planning and Zoning Board, Air Quality Advisory Board, Energy Board, Economic Advisory Commission, Land Conservation and Stewardship Board, and the Parks and Recreation Board. Staff intends to involve this Committee in reviewing and recommending proposed regulations and policies. Staff developed a matrix of regulations in place in the following communities: Greeley, Broomfield, Longmont, Boulder, Commerce City, Gunnison County, Thornton, Durango, and Aurora. This list includes jurisdictions considered leaders in natural areas (Boulder), creative solutions (Gunnison County), and comprehensive regulations (Broomfield, Aurora and Thornton). It also includes cities with recently implemented regulations that are expected to be challenged (Commerce City and Longmont). Proposed Non-Regulatory Options Feedback from State regulators, conversations with industry and other governmental entities and studying the State regulations provided the basis for the following recommendations. This comprehensive approach yielded a multi-step proposal for addressing oil and gas exploration and extraction. First, staff recommends utilizing existing Colorado Oil and Gas Conservation Commission (COGCC) rules to their fullest potential. This strategy is safe, may be swiftly implemented and allows City officials and the community a great deal of protection and information. By adopting a comprehensive non-regulatory approach, the City would be well-positioned to address areas of community concern such as notice, participation in the permitting process, assurance of public safety, and preservation of quality of life. Options include: • Use the Local Government Designee program to gather information and communicate with State regulators and industry. N Staff will initiate an aggressive approach to using the Local Government Designee program by enhancing communication with Larimer County for permit activity outside the City borders, regularly engaging State regulators and operators and communicating information to Fort Collins residents. • Petition the COGCC to protect Fort Collins parks and natural area assets as Designated Outside Activity Areas. August 14, 2012 Page 3 N The only designated outside activity area that has been approved by COGCC Commissioners is the Sandstone Ranch athletic fields in Longmont. The designated outside activity area, clearly stated as an option for communities in the COGCC rules, extends a 350-foot setback from the designated playground, recreation area, outdoor theater, or other place of public assembly. Staff is not aware of whether other entities have tried and failed to secure the designation. • Approve an intergovernmental agreement (IGA) with the COGCC for local inspection authority at well sites. N This IGA would provide the City with authority to inspect well sites for compliance with COGCC rules. Gunnison County is the only Colorado jurisdiction that has an IGA with the State for inspections – though this approach is favored by COGCC and many have discussed the option. Having inspection authority is important - without it City staff could only inspect for fire and building code violations and would not be granted unfettered access to well sites. Using the IGA, City officials could direct a customized local inspection regime at a frequency of their choosing. Another option to consider in concert with the first set of non-regulatory options is to enter into a contractual relationship with operators. An operator agreement between the City and Prospect Energy is an approach favored by industry. Longmont’s experience with this approach has resulted in concessions from the operator that included increased water quality testing and setbacks of 750 feet from occupied structures – more than double the State’s maximum. Proposed Regulatory Options In addition, staff recommends implementing regulations governing land use, instituting a local permit option, mitigating community impact and addressing citizen concerns. The COGCC fiercely guards its authority to oversee oil and gas activities statewide; a fact that staff was constantly reminded of throughout this process. While it may be true that the COGCC permits operations and controls everything “down hole” or beneath the surface, there are many areas where the City may implement compatible regulations without entering into an operational conflict with the State. Areas clearly defined within the COGCC’s rules typically present communities with an operational conflict if the City adopts more stringent standards. The following is a list of areas that the Colorado Attorney General has stipulated in letters to other jurisdictions that COGCC has regulatory authority over: • Site permitting • Permitting for drilling processes • Maintenance and upkeep of drilling and production equipment • Disposal of exploration and production waste • Well site noise abatement, safety, setbacks from homes • Site reclamation and abandonment • Public water system protection and water quality sampling • Proximity to floodplains • Wildlife protection August 14, 2012 Page 4 Staff believes that there are many areas that cities do have authority to implement regulations without an operational conflict. These areas include: • Transportation and transit of materials • Aesthetics of well sites • Disposition of abandoned wells • Emergency preparedness • Impact Fees • Requiring public hearing and receipt of a local permit City staff is proposing a four-fold approach to address oil and gas exploration and extraction regulations as follows 1. Create subsection 3.8.29 of the Land Use Code entitled “Oil and Gas Development.” In addition, staff would review the Land Use Code to address oil and gas development in the context of other regulations. This would include important protections like public notice, development review procedures, and landscaping required. 2. Revise the submittal application requirements to include additional items not regulated by the Land Use Code 3. Create a local permit option in the City Code that would ensure that the City has a mechanism to issue and revoke permits on the basis of an operator’s compliance with COGCC rules and local regulations. 4. Provide operators with an option in the permit process to voluntarily choose a more stringent set of operating conditions in exchange for a more expeditious permitting process. This option could be attractive to the City in that it would ensure a high level of community protections and to the operator in that they could have oil and gas to market sooner. Division 3.8 of the Land Use Code contains 28 sections that highlight individual issues like accessory buildings and child care centers. Adding supplemental regulations for oil and gas related land uses to this section of the Land Use Code could include a purpose and applicability statement; general standard; design standards like noise, visual impacts, setbacks, and access roads; and operational standards like inspections and monitoring, pollution control planning, site reclamation standards, and emergency response plans. In addition to creating a supplementary regulation for oil and gas development, the entire Land Use Code will be reviewed to ensure oil and gas operations are held to the highest regulatory standards the City has in place. Staff has identified the following areas to be addressed: • Section 2.2.6 Notice – Define Notice in Section 2.2.6(D) to include a separate line item for oil and gas and use the most restrictive notice radius and sign size, e.g., 1,000 feet plus a 12 square foot sign. • Section 2.3.2(H) Regarding Overall Development Plans – Consider requiring a subsection that requires potential areas for oil and gas development to be included. August 14, 2012 Page 5 • Division 2.2.10 Amendments – Include specific requirements addressing whether a proposal to change an approved oil and gas development plan shall be processed as a major or a minor amendment. • Section 3.2.1(D)(4) – Consider different minimum sizes for trees species for oil and gas development, i.e., increase the minimum caliper, height, or container size for screening purposes. • Section 3.8.26 Residential Buffering – Consider adding a buffer standard that implements a setback matching the COGCC’s minimum standards for distance from occupied structures from existing well sites and production equipment for new housing development. This would mean that for proposed developments near wells, a developer would be excluded from constructing a home closer than 150 feet from the existing well or production equipment or a high-density development closer than 350 feet from existing oil and gas equipment. • Article 4 Zone Districts and Review Process – Clarify that all oil and gas development is processed by the Planning and Zoning Board, thus requiring a neighborhood meeting. • Article 5 Definition of Development – Amend subsection of (1)(e) to be more consistent with other communities, i.e., both initial drilling and former oil and gas production sites are development. The local permit option has been adopted in other communities and would work in concert with, not usurping, COGCC permitting. This permit would stem from the Fort Collins City Code rather than the Land Use Code and provide a framework for expected business operation standards. For the community, the value of a locally issued permit would be to ensure a business is conducted to the satisfaction not only of the state but to that of the City, as well. While the City might not be able to layer conditions and regulation over State regulations, a local permit can be revoked when an operator is out of compliance and gives the City another avenue to assure compliance with the highest possible operational standards. The LGD has authority under Rule 522 to file for an order of violation against an operator. While the COGCC Commissioners would need to find a violation, the City could suspend its locally issued permit until the violation is corrected. Staff would need to develop a list of criteria included in submittal requirements for oil and gas developments. These submittal requirements could include the following: • Proposed well sites and existing subsurface lease boundaries • Location of wellhead and all related production facilities • Operator and surface owner names and addresses • Operation plan • List of all permits received to date from other government entities • Seismic operations plan that includes prior notice to LGD and contact information for contractor • Weed control plan • Fire protection and emergency response plan • Pollution protection plan • Water source identification, transportation and disposal plan • Notification of exceptions or variances requested by applicant to COGCC or federal rules. August 14, 2012 Page 6 A final option could be to offer a dual track for permitting. This option would allow a limited and expeditious permitting process for operators willing to negotiate enhanced community protections. Companies willing to provide enhanced setbacks or environmental testing might be able to receive an administrative project approval that affords them quicker permitting. Details of this option would be developed at the request of City Council. The non-regulatory and regulatory options could be adopted in whole or in part. Staff is presenting the options as a comprehensive approach providing Fort Collins with the greatest possible oversight of the oil and gas industry. ATTACHMENTS 1. Benchmarking Matrix 2. Map and matrix with the types of wells within Fort Collins 3. Powerpoint presentation Comparison of Colorado Oil and Gas Regulations 8/1/2012 Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information Broomfield https://www.sp ringsgov.com/u nits/boardscom m/OilGas/Broo mfield%20Oil% 20and%20Gas% 20Regulations% 20(Chapter%20 17‐54).pdf  Site Inspection (fire and building code)  Setbacks for wellhead/equipment o at least 350’ from occupied building or building permitted for construction o at least 75’ from public right of way  Noise o Regulate decibel level o Require noise mitigation in sensitive areas  Visual impacts/Aesthetics o Landscaping o Painting  Seismic operations  Signage  Site reclamation  Geologic hazard/Floodplains  Access Roads  Wildlife  Emergency response costs  Permit requirement  Penalties  Abandoned well sites  Use Permit by Special Review  Approved by City Council  Permit required for additional work (recompletion, deepening, etc)  Site plan o Map water and water flow o Location of wells and injection wells o Location of drill sites o Narrative with 24/7 contact information o Emergency Response Plan Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 2 Longmont http://www.ci.l ongmont.co.us/ pwwu/oil_gas/i ndex.htm  Facility location  Drainage standards  Emergency Preparedness  Haz Mat disclosure, safe handling  Safety and site security  Maintenance of well site, access roads, right of way  Proper disposal of chemicals  Prompt reclamation of sites  Impact fees o Road repair o Bridges o Public health o Safety o Process/analysis of applications o Hiring of consultants  Operation Plan o Drilling o Well completion o Transportation o Resource Production o Post‐operation activities  Setbacks o 750’ from occupied building or one permitted for construction o 750’ from parks, sport fields, playgrounds, residential lots,  Conditional Site Plan Review  Third party technical review (reasonable cost paid by applicant)  Sales/Use Tax permit  Right to Enter/Inspect for City permit conditions  Operator 24/7 contact  Provide performance security in amount determined by city  Liability Insurance  Site access permit for road use o Demonstrate right to access Yes No Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 3 designated outside activity areas o 150’ setback for surface improvements near well facilities o 150’ from abandoned well sites for location of playgrounds and sport fields o Setback to water bodies (same as COGCC)  Visual mitigation  Noise (same as COGCC)  Lighting  Protection of water resources  Water quality testing and monitoring (same as COGCC) o Continue a minimum of 5yrs after operations cease  Closed Loop System  Operations in disposal well (prohibition)  Storm water management (CDPHE compliance)  Spills (comply with federal law)  Air Quality (comply with CO Air Quality Control Program) o Prohibited from emissions in levels known to create health impact o Minimize methane emissions (COGCC rule) Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 4 o Use electric equipment when possible to reduce emissions  Site reclamation  Transportation Impact o May require study of impact to infrastructure and traffic Thornton http://www.city ofthornton.net/ Departments/Ci tyDevelopment /Documents/AR TICLE_X_Oil_an d_Gas_%20Facil ity_Regulations. pdf Setbacks  350’ from occupied buildings  75’ from public right‐of‐ways Visual Impacts  Fencing, Landscaping, Signage Access Roads  Approval from City Engineer  Permit for Public Access Roads (Approval of Traffic Engineer) Development Permit Required & Notice of Activity Permit Includes:  24/7 Contacts  Operating Plan  Listing of all permits  Emergency Response Plan  Schedule of Drilling and Completion Time  Access Plan (Equipment Routes and Loading)  Drainage and Erosion Plan (on‐site and off‐site)  Site Photographs  List of all Equipment Used during drilling  Well location  Gathering and transmission lines location  Sales and Use Tax Permit Yes No No Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 5 Durango  Setbacks  Low Density (150 feet) o Occupied Building o Assembly Building o Existing Public Road o Designated Outside Activity Area o Recreation Facility o Red/Bike Trail o Major Above Ground Utilities Line o Railroad  High Density (350 Feet) o LGD can request production tanks to be located (500 feet) from high density area  Pipeline Setbacks o 50 feet from edge of pipeline easement from all occupied lines and public assembly buildings o 25 feet garden, shed, septic tanks  Floodplain Restriction (COGCC Restrictions)  Drilling Waste Disposal (COGCC Rules)  Seismic Operations ( limited to 7am‐ 7pm) 7 days notice to the City  Use by Special Use Permit o City Inspections  Fire and Building Code  Site Plan Application o Copy of All information for COGCC o Map, Site Layout, Surface Improvements, Right‐of‐way, Drainage, Access Roads, Surface Ownership within 200 feet of well o Emergency Response Plan 24/7 Person Contact o Written Hazmat Plan No No No Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 6 o Method, map and contact information o Signage (COGCC Rules)  Safety Impacts and Mitigation  Recordation of Pipeline Location (Recorded with City Clerk)  Reclamation (COGCC Rule)  Abandonment (COGCC Rule)  Operations in High Density Areas  Building Permit, Liability Insurance ($1 million per occurrence), Performance of Security ($50,000 bond) Aurora  Setbacks o Urbanized area – 350’ from  Occupied building or building permitted  Public Right of Way – 75’ o Non‐Urbanized area – 150’  building or building under construction  Not within 300’ from schools, assembly building or institutions  Production site containment  Visual impacts/aesthetics  Access roads standards and maintenance  Maintenance of equipment  City application  Notice  P‐Z Board hearing  Adverse impact concerns  Waiver process Yes No No Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 7  Flood hazards  On‐site transportation o Transmission via buried pipeline  Air emission  Noise  Wildlife impacts  Signage  Fencing  Landscaping  Difference between permitting in urbanized vs. non‐urbanized areas City of Boulder (Open Spaces) http://www.bo uldercolorado.g ov/files/opensp ace/pdf_regulat ions/oil_and_ga s_regulations.p df  Setbacks o 600’ for Production tanks/equipment from  Buildings  Roads  Above Ground Utility  Railroads  Wildlife  Scenic area  Biking/Ped/horse trail  Permitted Construction  Erosion control plan  Drainage and storm water plan  Water transportation and disposal plan  Imposes County Health regulations o Noise  Application to City Manager o 6mos prior to desired commencement date  Public Hearing required  Comply with COGCC rules  Mitigate pollutants at well site  Adequate public safety services  Open Space Board hearing  Council approval – hearing Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 8 o Dust o Odor o Gas‐flaring o Haul trucks  Reclamation/restoration plan  List of adjacent surface owners  Mitigation plan for trails and watershed  Description of cultural resources o Within city guidelines  Visual mitigation/site location  Site aesthetics/landscaping  Noise barriers  Wildlife impacts  Access plan  Traffic plan for residential zone  Weed control  Spill reporting and mitigation (COGCC rules)  Noise and vibration (decibel specification)  Closed pits  Inspection  Security  Storage tanks  Signage  Water disposal and containment  Access roads  Trails  Subdivisions  Narrative  Emergency response plan  Access to well site  Affected surface owners o Notice  Evidence of easements o Weed control plan  Fire protection agreement or evidence of protection plan  Emergency incident plan  City‐issued building permit  Notice of commencement of operations  Written notice of flaring to Fire Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 9  Maintenance  Air emissions (AQCC rules) Greeley http://greeleyg ov.com/Commu nityDevelopme nt/Documents/ Planning/Forms %20and%20Ha ndouts/Oil%20a nd%20Gas%20F AQ.pdf  Setbacks o Low Density Area: 150’ from well head, road, plat of right‐of‐ way, trail, rail, public utility, homes o High Density Area: 300’ from education building, hospital, nursing home, board and care, jail o Possible City Waiver to Reduce Setback  Flood Plain Restriction  Disposal of Production Waste  Seismic Operations (Map and 24/7 Contact Information)  Signage  Access Roads  Compliance with City, County, State, and Federal with: o Air Quality o Water Quality o Odor Quality  Noise Impact  Visual Impact Use by Special Review Permit Yes No No Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 10  Safety and Wildlife Impact  Recordation of Flow Lines (File with County Clerk)  Reclamation Plan  Abandonment Plan  Operation in High Density Area  Site Plan Application Requirement  Notice to Proceed  Inspection for Fire & Building Code o Inspection Fee Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 11 Gunnison County http://www.gu nnisoncounty.o rg/planning_pdf /Oil_Gas_Temp _Regulations_D raft_Modificati ons.pdf Use by Special Review Permit shall include:  Applicant’s Contact Information  Documentation of Surface Ownership & Mineral Owners  Parcel Location  Identification of previously approved uses  Characteristics and Current Condition of the Operation Location  List of Adjacent Landowners  Vicinity Map  Site Plan Map  Application and Permits  Operation Plan  Linear Features (Identification of water bodies within 150’ of proposed well)  Weed Management Plan  Access & Transportation Routes  Roadway Impact Analysis  Wildlife & Habitat Analysis  Vegetation  Emergency Response Plan  Water Bodies & Drinking Water Supplies Identification  Water Quality Monitoring Plan  Cultural Survey Yes Yes No Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 12  Drainage & Erosion Control Plan  Wildfire Hazards  Geologic Hazards  Existing & Future Land Uses  Operational Conflict defer to highest governmental agency  Technical Infeasibility or Environmental Protection  List of Chemicals Used in Operation Fees  Application Fee set by Review Board Jurisdiction Areas of Regulation Local Permit Process Local Government Designee MOU or IGA with State for Inspections Designated Outside Activity Area Operator Agreement/s Other Information 13 Commerce City Site Requirements • Surface issues such as fencing, approved paint colors, landscaping, lighting, signing • Wildlife mitigation plan • Adherence to drainage and stormwater regulations • Traffic mitigation requirements such as a traffic study and limits on oversized vehicles • General waste management plan Public Concerns • Public notification of operations within a half‐mile (2,500 feet) of site • Odor and dust containment • Noise mitigation measures such as hay bales or insulated motors and limited hours for maximum noise levels • Required to comply with all state and federal regulations or laws (such as air and water quality) Permit Process • Applies to existing wells that are being recompleted. • Administrative approval, with city council hearing appeals. • Prohibits wells within floodplains. • Prohibits injection or disposal wells. • Requires an Extraction Agreement as part of permit. Yes No No Yes, Extraction Agreement Updated 6/19/2012 City of Fort Collins Well Status Overview: The City of Fort Collins has a total of thirty‐two (32) wells within the City limits. The chart below shows the number of wells and drilling status. A major of the wells are located in the northern edge of the City limits (see maps below). Well Status Defined Map Symbol # of wells Producing Pits used after drilling operations and initial completion of a well, including pits at natural gas gathering, processing and storage facilities 8 Shut In A well which is capable of production or injection by opening valves, activating existing equipment or supplying a power source. 3 Plugged and Abandoned The cementing of a well, the removal of its associated production facilities, the removal or abandonment in-place of its flowline, and the remediation and reclamation of the wellsite. 7 Drilled and Abandoned Shall mean a well which is incapable of production or injection without the addition of one or more pieces of wellhead or other equipment, including valves, tubing, rods, pumps, heater- treaters, separators, dehydrators, compressors, piping or tanks. 6 Abandoned Location Any shut-in well from which no production has been sold for a period of twelve (12) consecutive months; any well which has been temporarily abandoned for a period of six (6) consecutive months; or, any injection well which has not been utilized for a period of twelve (12) consecutive months. 1 Injecting Injecting fluids or gas from the surface. 7 Total Number of Wells: 32 *http://cogcc.state.co.us/ ATTACHMENT 2 Updated 6/19/2012 The map below shows the boundary of the City of Fort Collins, as seen in the yellow highlighted areas. The red dots indicated the placement of a well. The green lines are the various highways that run through the City. Please see map symbols for additional details of well status. Updated 6/19/2012 Below is a closer look at the cluster of wells in the northern corner of the Fort Collins boundary. Well Name/ No: Operator Well Status Test Method Expiration Date MESSERSCHIMITT #1 Unknown Plugged and Abandoned unknown 2/24/2000 WHITAKER BLUNK #4 Whiting Oil and Gas Plugged and Abandoned Pumping 11/19/1960 Hearthfire #1 Prospect Energy LLC Producing Pumping 10/7/2012 MSSU #30-14 Prospect Energy LLC Injecting Injecting 2/25/1990 Muddy Sandstone Unit #30-2 Prospect Energy LLC Shut In Pumping 2/19/1979 WHITAKER BLUNK #3 Pomeroy Producing Drilled and Abandoned unknown 12/25/1926 Blunck #2 Fort Collins Prod Plugged and Abandoned Flowing 11/16/1926 Muddy Sandstone Unit #30-2 Prospect Energy LLC Producing Pumping 3/18/1978 MSSU #30-15 Prospect Energy LLC Shut In Injection/ Beam Pump/ Pum 3/21/2013 MSSU #30-5 Prospect Energy LLC Producing Pumping 1/25/1980 MSSU #30-16 Prospect Energy LLC Injecting Injecting 9/26/1992 FT. Collins Muddy Unit #30-4 Prospect Energy LLC Producing unknown 7/22/1979 Muddy Sandstone Unit #30-3 Whiting Oil and Gas Plugged and Abandoned Pumping 2/19/1979 MSSU #31-3 Prospect Energy LLC Injecting Injecting/Beam Pump 12/13/1992 MSSU #30-19 Prospect Energy LLC Producing Beam Pump 9/26/1992 MSSU #30-18 Prospect Energy LLC Producing Beam Pump 9/19/1992 MSSU #31-2 Prospect Energy LLC Injecting Injection/Beam Pump 9/26/1992 MSSU #31-3 Prospect Energy LLC Shut In Injection/Beam Pump 12/13/1992 MSSU #30-10 Prospect Energy LLC Injecting Injection/Pumping 8/23/1985 Muddy Sandstone Unit #30-6 Prospect Energy LLC Producing Pumping 6/21/1960 MSSU #30-17 Prospect Energy LLC Injecting Injection/Pumping 6/18/1988 MSSU #30-7 Prospect Energy LLC Injecting Injection/Pumping 6/21/1980 LIND FARMS INC AMOCO Production Drilled and Abandoned unknown 5/29/1973 PORTNER #1 Fort Collins Prod Drilled and Abandoned unknown 11/8/1957 CHANDLER #1 Unknown Plugged and Abandoned unknown 2/24/2000 Brown #1 54 Oil Company Drilled and Abandoned unknown 10/2/1925 Harmony Commercial Indust #1 AMOCO Production Abandoned Location unknown 11/15/1981 TIMNATH #1 UNIOIL Plugged and Abandoned Pumping 4/1/1983 WEBSTER #1 Associated Oil & Gas CO Plugged and Abandoned Flowing 3/23/1925 HUMMELL #1 Allison Drilling Company IDrilled and Abandoned unknown 12/17/1954 DEINES #1 Toltek Drilling CO Plugged and Abandoned unknown 1/8/1983 STATE #1 National Assoc Petr Co Drilled and Abandoned unknown 7/4/1963 8/9/2012 1 1 Oil and Gas Exploration and Extraction City Council Work Session August 14, 2012 2 Overview • Progress to date – Public input – What we have learned • Non-Regulatory Options • Regulatory Options • City Council Direction • Timeframe ATTACHMENT 3 8/9/2012 2 3 Questions • Which options does City Council want staff to pursue? • What specific areas would City Council like staff to address in developing regulations? • Is public engagement program sufficient? • Is the proposed timeline acceptable? 4 Lessons Learned • Community concerns • Other cities and counties • State regulators • Industry 8/9/2012 3 5 Public Input Summary • Environmental Groups – Protect public health – Strengthen state regulations – Provide public notification and input – Conduct baseline air and water quality testing • Industry Group – Conduct baseline water quality testing – Utilize LGD and be engaged – Institute reciprocal setback from well sites 6 Public Input Summary • Oil and Gas Advisory Committee – Will Fort Collins sell water? – Is City considering a legislative fix? – Has City identified subsurface ownership? – Where can the City influence process? 8/9/2012 4 7 Non-Regulatory Options • Local Government Designee • Designated Outside Activity Areas • IGA with Oil and Gas Conservation Commission – local inspection authority • Surface Use/Operator Agreement • Partnerships – Colorado State University – Air Quality Control Commission – Cities within Larimer County 8 Land Use Code Options • Create subsection 3.8.29 of the Land Use Code entitled “Oil and Gas Development” – Review other sections of the Code to include protections like public notice, development review procedures, landscaping required • Residential buffering near existing well sites • Utilize Project Development Plan (PDP) • Review existing code to ensure highest regulatory standards 8/9/2012 5 9 Municipal Code Option • Create local permit option – Complement COGCC rules – Permit individual wells – Fees to inspect, planning review, permit approval – Empowers suspension of permit with violation 10 Additional Option • Dual track permitting – Administrative permit vs. PDP option – Expeditious permit – Require industry concessions – This is an untested option 8/9/2012 6 11 Proposed Completion Timeline • August 14th Council Work Session • Draft regulations • Planning and Zoning Hearing – October 18th • First reading City Council – November 20th • Second Reading City Council – December 4th 12 Questions • Which options does City Council want staff to pursue? • What specific areas would City Council like staff to address in developing regulations? • Is public engagement program sufficient? • Is the proposed timeline acceptable? Department  Notice of P/A of well  Building permit required  Liability security (COGCC)  Pollution violation – notice to City Manager within 10 days of incident required  Applicant Fee o Site Plan o Vicinity map – 1mi radius of wellhead  Water  Floodplain Yes No No Yes, Sandstone Ranch athletic fields Yes Lawsuit filed by Attorney General claiming several provisions of local regulations are preempted including excluding oil and gas operations from residential zones (approved by fire district) o Fire Protection Plan o List of permits obtained by federal, state, local agencies o Operating plan o Weed control plan o Source of water to be used in drilling operations  Notice to proceed from City Engineer once Council approves  Charge application and well site (fire and building inspection) fees Yes No No ATTACHMENT 1