HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/15/2012 - FIRST READING OF ORDINANCE NO. 048, 2012 ESTABLISHDATE: May 15, 2012
STAFF: Karen Cumbo AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 23
SUBJECT
First Reading of Ordinance No. 048, 2012 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.
EXECUTIVE SUMMARY
Although there has not been a great deal of oil and gas drilling in Larimer County until recently, the discovery of the
resource-rich Niobrara formation in this region, and the increased use of horizontal hydraulic fracturing (“fracking”) and
directional drilling increase the likelihood of oil and gas drilling in the City of Fort Collins. The State of Colorado has
largely pre-empted the regulation of oil and gas drilling, even within municipal boundaries, but City staff is monitoring
the recent legislative discussions as well as drilling activity, and proposes the development of regulations, and a
moratorium on any oil and gas drilling until those regulations are adopted.
BACKGROUND / DISCUSSION
While Larimer County has not played a significant role in oil and gas industry issues until recently, two recent
developments may result in significant changes and have raised considerable public concern. The first is the
successful exploration of the Niobrara formation, which lies deep under much of northeastern Colorado, and the
second is the advancing technology of hydraulic fracturing (“fracking”), including horizontal fracking, and directional
drilling, to extract the resource from within deeply located shale deposits.
Until these recent developments, concern in Fort Collins was largely limited to impacts on the Natural Areas. The City’s
Natural Areas Department began working with representatives of the oil and gas industry two years ago to develop
a permit process and Best Management Practices (see Attachment 2) for use in connection with large City-owned
properties in unincorporated Larimer County and Weld County.
Oil and gas exploration and production is regulated by the State in Colorado. Local jurisdictions are extremely limited
in their ability to control the location, procedures, and impacts of oil and gas drilling in and around their boundaries.
Local regulations cannot present an “operational conflict”, and a combination of the state’s laws, and several court
cases resulted in the preemption of local control of setbacks and many other types of impacts. The City’s current
regulations in the Land Use Code are minimal, and are outlined in the attached memo (Attachment 1). Attachment
1 also identifies key topic areas for consideration of City regulations.
Given the increasing public concern, City staff formed a multi-disciplinary team to identify the issues of greatest
concern and explore options to protect the interests of the City of Fort Collins and its citizens. This team includes
representatives from Utilities, Natural Areas, the Office of Sustainability, the City Attorney’s office, the City Manager’s
office, Poudre Fire Authority, and Planning, Development and Transportation.
There is also statewide interest in the impacts, regulation, and enforcement of oil and gas drilling, particularly fracking.
Several bills were introduced and subsequently killed during the current (2012) legislative session. The Governor
established a task force to address the issues of greatest concern to local governments, the Oil and Gas Commission,
and the industry. The President of the Colorado Municipal League (CML) Board represented cities’ interest on the task
force, and Longmont Councilmember Brian Bagley was also appointed. The task force completed its work without
much significant progress.
The City of Fort Collins’ staff team researched the regulations of other Colorado municipalities and counties, and is
actively participating in the statewide conversation to benefit from the years of experience of other local governments
and find the best ways to protect the interests of the City of Fort Collins and its residents. Utilities explored the legal
and technical issues around the provision of water or wastewater treatment to the oil and gas industry, and identified
May 15, 2012 -2- ITEM 23
the parameters of such services and any necessary steps for further consideration. No City service is currently
provided, and none is recommended at this time.
The City of Fort Collins is also participating in the Local Designee program offered by the Colorado Oil and Gas
Conversation Commission (COGCC). This agency, which issues permits and regulates all oil and gas drilling in the
state, notifies local representatives of permit applications in their region, and provides an opportunity to comment.
Larimer County also forwards notices received by the County’s designated contact for permit applications in the City’s
Growth Management Area.
ENVIRONMENTAL IMPACTS
Oil and gas drilling within the city could have significant impacts on air quality and water quality, and there is also
concern about the increased risk of spills and releases of hazardous materials due to an increase in use, storage and
transportation of such materials. In addition to these impacts, well pads and service roads are fragmenting wildlife
habitat on a massive scale in northeastern Colorado and in other communities throughout the western United States.
The City’s Natural Areas are threatened by this fragmentation. In addition, there are high volumes of truck and heavy
equipment associated with oil fields. While there is conflicting technical information regarding air and water quality
threats, there is little doubt that oil and gas drilling would negatively affect the environment in the community and does
not support the City’s goals for sustainability.
STAFF RECOMMENDATION
There has been no application for a well permit within the City’s boundaries yet, although there is a producing well not
far from Natural Areas’ property. It is likely that extraction interest in this area will increase. Staff therefore
recommends:
1. Establishment of a moratorium on drilling permit applications, by ordinance, for a period of eight months.
The purpose of this moratorium is to provide time to develop a permitting process for oil and gas drilling,
draft land use regulations, and conduct a robust public discussion on the proposed regulations.
2. Development of a permitting process and appropriate regulations to reflect and protect the community
interests of Fort Collins, to the degree allowed by law.
Staff’s proposed work plan for this effort includes:
• Initial public outreach to identify the key issues (3-4 weeks - target completion June 30)
• A Council work session on the topic that sets the priorities identified both by staff and in the public outreach
efforts (to be scheduled - July)
• Time for staff to draft the regulations (2-3 months - target completion October 10)
• Vetting of the regulations by the public, as well as Boards and Commissions (2 months - target completion
December 7)
• Council work session to discuss the regulations (scheduled for December 11)
• Council Hearing to adopt land use regulations (December 18)
BOARD / COMMISSION RECOMMENDATION
Although some of the City’s Boards and Commissions have provided input, and have expressed concerns about the
potential impacts of oil and gas drilling, no formal action was taken by any of the City’s boards and commissions. They
will be active participants in the drafting and review of regulations.
May 15, 2012 -3- ITEM 23
PUBLIC OUTREACH
Many individuals and groups have expressed their concern about oil and gas drilling, and their involvement will be
sought during the development of regulations.
ATTACHMENTS
1. Memo from Lindsay Ex, Environmental Planner
2. Memo from Daylan Figgs, Senior Environmental Planner
3. Powerpoint presentation
1
MEMORANDUM
Date: March 21, 2012
To: Mayor and City Councilmembers
Thru: Darin Atteberry, City Manager
Diane Jones, Deputy City Manager – Policy, Planning and Transportation
Karen Cumbo, Planning, Development and Transportation Director
Laurie Kadrich, Community Development and Neighborhood Services
Interim Director
From: Lindsay Ex, Environmental Planner
Re: Land Use Code Regulations and Future Regulations regarding Oil and Gas
Development
Topics Addressed
1. Existing regulations in the Land Use Code that reference oil and gas drilling land uses;
2. Key areas that other Colorado cities regulate, e.g., setbacks, hours of operations, screening,
environmental protection, etc.; and
3. A suggested process for amending our Land Use Code to be more thorough in this issue,
including a supplementary regulation in Section 3.8 of the Land Use Code for oil and gas land
uses, a suggested outreach process for identifying and prioritizing key issues for the City of Fort
Collins, and a timeline for the development and outreach of these regulations.
1. Existing regulations in the Land Use Code that reference oil and gas related land uses:
Within the Land Use Code (LUC), both Article III (General Development Standards) and Article IV
(Districts) contain provisions for oil and gas regulations. As oil and gas land uses are regulated by the
State, any regulations imposed by the City cannot present an “operational conflict” with state law. In
Article III, Section 3.8.14 entitled “Preemption Uses,” reads as follows:
“Any use that is not permitted under the provisions of Article 4, but that must be allowed
because of preemption by a sovereign jurisdiction or because of a court order, shall be processed
as a Planning and Zoning Board Review (Type 2 review) and shall be approved, with or without
conditions, as necessary to ensure that such use complies with all general standards as set forth in
Article 3 and zone district standards as set forth in Article 4 as are or may reasonably be
interpreted to be applicable to such use, provided that such standards are not preempted or
ordered by a court not to be applied.”
Planning, Development and
Transportation
Current Planning
281 North College Ave.
P.O. Box 580
Fort Collins, CO 80522-0580
970.221.6750
970.224.6134 - fax
fcgov.com/currentplanning
ATTACHMENT 1
2
Article IV identifies the zoning districts where oil and gas activities are permitted uses. In the LUC, oil
and gas activities are classified under Industrial Uses as “Resource extraction, processes and sales.”
Resource extraction, processes, and sales are permitted uses, subject to a Type II Review (Planning and
Zoning Board Review) in the following zone districts:
Urban Estate District (U-E),
River Conservation District (R-C), though this section does state that “except that such uses are
not permitted in natural area protection buffers.”
Industrial District(I)
However, as oil and gas related uses are regulated by the State, they are considered to be preemptive
uses and may not be able to be confined to the current zone districts for which they are permitted uses.
2. Key areas that other cities regulate
City staff has conducted a preliminary review of the oil and gas-related regulations from Greeley,
Durango, Thornton, and the proposed regulations from Longmont. From reviewing these various
communities’ codes, the following topic areas will be critical for the City to examine as we consider
adopting our own regulations for resource extraction beyond those codes listed above, to the extent local
regulation is permitted:
Setbacks,
Floodplain restrictions,
Disposal of waste materials,
Seismic activity,
Signage,
Access roads,
Environmental requirements, including buffers, noise, odor, water quality, air quality, and
mitigation requirements for each,
Visual screening and site containment,
Recording of flow lines,
Reclamation of the site,
Abandonment of the site,
Operations in “high density” or “high activity” areas,
Building permits and the development review process requirements, including notice and
outreach requirements,
Review criteria,
Monitoring and inspection criteria, period, and process,
Violations and enforcement,
Findings of adverse impact, and
Policies relating to the provision of water or wastewater treatment services.
One innovative solution to oil and gas regulation that the City of Longmont is currently reviewing is the
option of having two sets of standards: one that allows a permitting process to be “fast-tracked” and
another that goes through a standard review process. The fast-tracking process has stricter requirements,
e.g., more significant setbacks, greater screening requirements, etc., but if the oil and gas company
voluntarily agrees to abide by these stricter standards, their review process can be streamlined with an
internal review. If the applicant would like to be regulated by their minimum standards, the more
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extensive review, including public outreach and Planning and Zoning Board approval, would apply. This
type of review process, similar to the City’s Type I and Type II Review, is something that the City of
Fort Collins might want to explore for these types of land uses as well.
There is also an increasing trend, supported by the Oil and Gas Commission, to develop Memoranda of
Understanding (MOU’s) and intergovernmental agreements that would permit local governments to take
on some inspection responsibility from the state. Local governments also have the opportunity to
comment, through the Commission’s Local Designee process, on permit applications to the State. These
approaches, while helpful in some instances, do not address many of the concerns of local communities.
3. Suggested process for amending the City’s Land Use Code to address oil and gas land uses
There are two issues for Council to consider before establishing a moratorium on oil and gas drilling:
A. Determine the particular purpose for the moratorium. In this case, it would be to allow time for
development of a supplementary regulation in Division 3.8 of the Land Use Code that
specifically addresses the key areas outlined above, and more as necessary, as they relate to oil
and gas land uses;
B. Create a timeline and process for the development and outreach of these regulations, so that all
stakeholders within the City are both informed about the proposed changes and also involved in
their development and that can be completed within the moratorium timeframe.
These two items are briefly discussed below.
Development of a supplementary regulation in Division 3.8 of the Land Use Code
Division 3.8 of the Land Use Code contains 28 sections that highlight individual issues that may or may
not apply to a project entering into the development review process. By way of example, the topics areas
covered by these supplementary regulations range from accessory buildings and child care centers to
wireless telecommunication facilities and composting. Staff suggests that this Division of the Land Use
Code is where the supplementary regulations for oil and gas related land uses should be placed.
This new supplementary regulation would cover the range of topics addressed in section two of this
memo (key areas other cities regulate) and any other topics that arise during the public outreach and
code development process, developed with the intention of avoiding “operational conflict” with the State
of Colorado’s oil and gas regulations.
Create a timeline for the development and outreach of these supplementary regulations
In determining the length of the moratorium that should be proposed to Council, staff has reviewed the
timelines of other communities for their development and adoption of the oil and gas related land use
regulations.
Longmont – On January 24, 2012, the City Council of Longmont adopted a 120 day moratorium
on the acceptance and processing of applications for the drilling and production of oil and gas.
Their moratorium is effective from December 20, 2011 through April 17, 2012. Their City Staff
are currently preparing amendments and will present the ordinance to their Council on March
13th and March 27th.
Central City – enacted a ten-month moratorium.
Commerce City – The drilling company (Hilcorp Energy) that was seeking to explore oil and gas
in Commerce City voluntarily agreed to a 30-day moratorium in December 2011. In January and
in late February, staff proposed to the Commerce City Council that a six-month moratorium be
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put in place, but the City Council rejected that proposal, agreeing to hold off on the moratorium
for at least 60 days.
Erie – On March 7th, 2012, Erie’s Board of Trustees approved a 180 day moratorium that
prevents new permits for oil and gas companies. This was a position change for the Board of
Trustees in that approximately six weeks prior, they had decided not to impose a moratorium.
Colorado Springs – Imposed a six-month (180-day) moratorium on November 30, 2011.
As indicated above, there is a range of lengths in moratoriums that communities are establishing, with
approximately six months as the average length established. In order to determine the appropriate length
of a moratorium, staff will need to identify the work to be completed in order to develop and establish
new regulations and estimate the time needed for that work to be completed. However, given the City of
Fort Collins’ established record of extensive involvement of the community in the decision making
process, plans for the work to be carried should include and incorporate public outreach and input
elements in a way that does not unnecessarily extend the length of the moratorium period. Council
might want to discuss a moratorium length of up to ten months, similar to Central City, to ensure this
issue is vetted both internally and throughout the community. Thus, it is staff’s preliminary
recommendation that Council recommend between a six-month and ten-month moratorium on the
acceptance of oil and gas drilling permits to allow staff to engage in a thorough analysis of other
communities’ regulations, the most appropriate regulations for our community, and an opportunity for
an extensive outreach and community input process.
In regards to public outreach, there are numerous mechanisms for involving the community in the
discussions surrounding oil and gas drilling within the City limits. For example, the City of Longmont
has conducted a joint board and commission hearings to ensure that all issues are discussed that could
relate to the issue. In addition, at this joint hearing, the boards participated in a preference survey
designed to assess where the areas of concern were regarding oil and gas, so that regulations could be
tailored to their community. Holding a joint hearing of numerous boards that would want to weigh in on
this issue would be one way to have a cross-boundary dialogue on this issue.
In addition to board and commission engagement, staff will work with the public engagement/outreach
team to develop an outreach effort that is both thorough and effective. For example, preference surveys
also could be conducted at public workshops and through online surveys. A citizens’ advisory group
could be appointed to ensure all citizen engagement techniques are appropriate for developing the
supplementary regulations. Staff has heard Council’s desire that our outreach efforts be more systematic
and effective, and involvement of our residents in the process of developing these supplementary
regulations will be critical to the long-term success of how our community regulates oil and gas
development. Staff welcomes any additional suggestions from Council for how to best engage the public
in the development of these regulations.
Natural Areas Department
1745 Hoffman Mill Road
PO Box 580
Fort Collins, CO 80522
970.416.2815
970.416.2211 - fax
fcgov.com/naturalareas
ATTACHMENT 2
Memorandum
TO: Karen Cumbo, Director of Planning Development and Transportation
THROUGH: John Stokes, Natural Areas Department Director
FROM: Daylan Figgs, Senior Environmental Planner, Natural Areas Department
DATE: March 5, 2012
SUBJECT: Best Management Practices for Oil and Gas Exploration and Production
Best Management Practices for Seismic Surveys
In March 2010, the Natural Areas Department was contacted by representatives in the oil and gas
industry expressing an interest to explore and potentially develop mineral resources on Meadow
Springs Ranch and Soapstone Prairie Natural Area. In response to this request several actions
were taken by the City that include the development of an Access Permit, working with the
Colorado State Land Board to initiate the Mountains to Plains Energy by Design planning
process, and the development of Best Management Practices for Oil and Gas Exploration and
Production, and Best Management Practices for Seismic Surveys.
Impacts associated with oil and gas development that are of most concern to the Natural Areas
Department include site and habitat impacts, site restoration, habitat fragmentation caused by
well pads, roads, and other related infrastructure, impacts to wildlife and other natural resources,
impacts to cultural resources, surface and groundwater contamination, noise and light pollution,
and overall air quality impacts. As such NAD drafted a set of Best Management Practices to
help avoid and/or manage impacts associated with oil and gas exploration and development. In
addition, a second set of Best Management Practices were developed to manage seismic surveys
conducted in relation to oil and gas activities.
In general, the BMP’s call for a comprehensive consultation process in the initial phase of any
oil and gas related activity. The purpose of this phase is first to identify and avoid impacts to
natural and cultural resources within the City property; the second step is to minimize and
mitigate any unavoidable impact by how and when oil and gas activities are conducted. The
BMP’s are intended to follow the full process of oil and gas activities from the initial planning
stages through final reclamation. Included are impact avoidance and mitigation measures for
aquatic and wetland resources, wildlife resources, cultural resources, and air quality.
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The development of the BMPs relied on information contained within the Intermountain Oil and
Gas BMP Project (http://www.oilandgasbmps.org) and the Colorado Department of Parks and
Wildlife Actions to Minimize Adverse Impacts to Wildlife Resources (October 27, 2008).
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1
Oil & Gas Extraction Moratorium
First Reading of Ordinance No. 048, 2012
Karen Cumbo,
Planning, Development & Transportation Director
May 15, 2012
2
Oil & Gas Extraction Moratorium
First Reading of Ordinance No. 048, 2012
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.
ATTACHMENT 3
2
3
Oil & Gas Extraction Moratorium
• Little oil & gas drilling in Larimer County now
– No application for permit within City boundaries yet
• Likely increase in attention to Larimer County &
Fort Collins
• State of Colorado currently pre-empts most
regulation within municipal boundaries
• Staff monitoring legislation
• Proposing a temporary moratorium, until Fort
Collins can develop regulations
4
3
5
Oil & Gas Extraction Moratorium
• Current Conditions
– Exploration & extraction regulated by State
– Growing public concern
– Statewide legislative review
– Local efforts
• Natural Areas permit process & Best Management
Practices
• Participating in statewide review
• Local Designee Program: Colorado Oil & Gas
Conservation Commission
6
Oil & Gas Extraction Moratorium
• Environmental Concerns
– Air & Water Quality
– Hazardous Materials
– Impact to Wildlife Habitat
• Heavy Equipment Impacts
– Roads
– Natural Areas
4
7
Oil & Gas Extraction Moratorium
Staff Recommendation
• Establish a moratorium on drilling permit
applications
– Period of eight months
– Develop a regulatory process that reflects and protects
Fort Collins’ interests
• To the degree allowed by law
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Oil & Gas Extraction Moratorium
• Next Steps (6-8 Months)
– Initial Public Outreach
– Council Work Session Discussion re: Priorities
– Draft Regulations
– Public Outreach and Dialog-Draft Regulations
– Boards & Commissions
– Council Work Session-Draft Regulations
– Council Hearing
ORDINANCE NO. 048, 2012
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
WHEREAS, the City Council recognizes that the mining industry is important to the Fort
Collins community, but believes that it is also important to minimize, through appropriate
regulation, the adverse impacts that mining 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 oil and gas resources underlying portions of
the City; and
WHEREAS, the exploration for and extraction of liquid and gaseous hydrocarbon resources
and related activities present health, safety, and welfare issues which may currently be inadequately
addressed in the City's zoning and land use regulations; and
WHEREAS, the present regulations of the City which relate to oil and gas exploration,
extraction, and related operations and activities in the City need to be updated with respect to
regulatory best management practices consistent with the Colorado Oil and Gas Conservation
Commission Rules, and also be brought up to date with the current technologies of the oil and gas
exploration and extraction industry, in order to better preserve and protect the public health, safety,
and welfare of the citizens and key resources of the City; and
WHEREAS, oil and gas exploration, extraction, and related operations and activities may
negatively impact Fort Collins citizens, the use and integrity of water supplies and water
infrastructure, air quality, roads and transportation infrastructure, wastewater infrastructure, land
resources, wildlife and aesthetic values; and
WHEREAS, Section 1.2.2 the City’s Land Use Code provides that the purpose and intent
of the City's zoning and land use regulations is to, among other things, minimize the adverse
environmental impacts of development; and
WHEREAS, the City’s land use regulations for oil and gas exploration, extraction, and
related operations and activities need to be comprehensively reviewed to determine whether they
are sufficient to protect the public health, safety, and welfare, or whether 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 exploration, extraction, related operations and activities are approved within the City limits
before City staff and the City Council have an opportunity to thoroughly examine the impact of such
activities and take all steps necessary to protect public health, safety, and welfare, irreparable harm
may be done to the residents of the City; and
WHEREAS, to address this situation, the City Council finds and determines that an eight-
month moratorium 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 determining whether additional land use and
zoning regulations are necessary to protect and preserve the public health, safety, and welfare.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby finds 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 are outdated and do not contemplate current industry
technologies to properly mitigate impacts of these types of activities to protect and preserve the
public health, safety, and welfare.
Section 2. That, to address this situation, commencing June 15, 2012, there shall be a
moratorium on the acceptance or processing of any land use application, permit application, or any
other application requesting approval to conduct oil and gas extraction, or related operations and
activities within the City limits. This moratorium shall terminate as of midnight February 15, 2013,
or upon the receipt by the City Council of a recommendation from City staff and legislative action
taken thereon by the City Council, whichever shall first occur.
Section 3. That this Ordinance shall control over any conflicting ordinance of the City,
but only to the extent of the conflict.
Introduced, considered favorably on first reading, and ordered published this 15th day of
May, A.D. 2012, and to be presented for final passage on the 5th day of June, A.D. 2012.
_________________________________
Mayor
ATTEST:
_____________________________
Interim City Clerk
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Passed and adopted on final reading on the 5th day of June, A.D. 2012.
_________________________________
Mayor
ATTEST:
_____________________________
Interim City Clerk
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