HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/05/2013 - SECOND READING OF ORDINANCE NO. 032, 2013, AMENDINDATE: March 5, 2013
STAFF: Laurie Kadrich
Dan Weinheimer
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 29
SUBJECT
Second Reading of Ordinance No. 032, 2013, Amending the City Code to Impose a Ban on Oil and Gas Operations
and Hydraulic Fracturing and Certain Storage of Waste Within the City (Option 1 or 2).
EXECUTIVE SUMMARY
On February 5, 2013 City Council directed staff to prepare City Code changes prohibiting the use of hydraulic fracturing
and certain storage of waste within the city limits. Those changes are reflected in Ordinance No. 032, 2013. On
February 19, 2013, Council amended Ordinance No. 032, 2013 to include a ban on oil and gas operations as well as
hydraulic fracturing. The amended Ordinance was adopted on First Reading by a vote of 5-2 (nays: Kottwitz, Troxell).
Council also directed staff to prepare methods to repeal Ordinance No. 145, 2012 which would remove the moratorium
on the submission, acceptance, consideration and approval of all applications for City licenses, permits and other
approvals in any way to oil and gas uses within the City, or at a minimum permit oil and gas operations if Council
authorizes an “operator agreement” for such.
BACKGROUND / DISCUSSION
Ordinance No. 032, 2013 – Ban
On February 26, 2013 Council directed staff to prepare two options for consideration at the March 5, 2013 meeting.
Option 1 is the amended version from the February 19, 2013 meeting and subsequently bans all oil and gas
operations in the city limits – see definition below. Option 2 is the original option requested by Council on February
5, 2013 and limits a ban to hydraulic fracturing. Both options permit oil and gas operations and hydraulic fracturing
to occur when a Council authorized operator agreement is in place, prohibit storage of waste within the city.
Option 1
Second Reading of Ordinance No. 032, 2013 amending the City Code to impose a ban on oil and gas operations and
hydraulic fracturing and certain storage of wastes within the City (except with a Council-approved operator agreement).
Or
Option 2
Second Reading of Ordinance No. 032, 2013 amending the City Code to impose a ban on hydraulic fracturing and
certain storage of wastes with in the City (except with a Council-approved operator agreement).
“OIL AND GAS OPERATIONS” as defined by the Colorado Oil and Gas Commission: means
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 flowlines 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.
During the Council discussion, questions arose regarding whether the existing moratorium was needed if either of the
above mentioned options were adopted. The following is the information provided previously regarding the purpose
of the moratorium and the work directed by Council to be completed during the time of the Moratorium.
Ordinance No. 145, 2012 - Moratorium
On December 4, 2012, Council considered regulation of oil and gas exploration and production and unanimously voted
to impose a six-month moratorium on the submission, acceptance, consideration and approval of any all applications
March 5, 2013 -2- ITEM 29
for City licenses, permits and other approvals related in any way to oil and gas uses within the City and on City-owned
lands. The moratorium was intended to allow staff and Council time to further investigate the extent of the City’s
authority to regulate such uses and is set to expire July 31, 2013.
City Council direction for additional work during moratorium:
• Monitor and present City Council recommendations to the Colorado Oil and Gas Conservation Commission
(COGCC) during the rulemaking process as described above. Incorporate, as needed any changes into
proposed Land Use Code (LUC) amendments.
• Monitor 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.
• Develop materials including additional location maps that 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. Include mineral ownership information.
• Extend the set-back criteria into the Growth Management Area and create new mapping that identifies areas
currently exempt from drilling and those that would be if additional set-back criteria were adopted by the
COGCC.
• Evaluate the impact of regulations proposed 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. Specifically consider whether soils testing is needed for both.
• 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 resource rule
m reclamation areas and water sourcing.
• Propose an intergovernmental agreement with Larimer County that ensures that 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.
• Negotiate and present a proposal for adopting an operator agreement with Prospect Energy, the owner and
operator of the Fort Collins Field.
• Re-engage the boards and stakeholder groups and seek their recommendations regarding Option A or Option
B.
• Provide additional information regarding surface use agreements especially as the agreement relates to
habitat fragmentation and restoration; include photos and examples.
• Identify areas that may be considered for a Designated Outside Activity area and as such further exempt from
oil and gas activities.
Staff has begun work on many of these items, however, there is still work to be completed for the drafting of LUC
amendments and it is uncertain what actions the Colorado Air Quality Control Commission will be enacting as part of
proposed revisions to regulations affecting oil and gas owners and operators. As part of this process, the Colorado
Department of Public Health and Environment (CDPHE) is holding stakeholder meetings through May 2013. CDPHE
is the agency that governs air quality once an oil or gas well is in production. Revisions made by the COGCC will be
in effect beginning in May for water quality and in August for set-backs. There may also be changes during the 2013
General Assembly that affect local regulations for oil and gas operations.
Staff was also directed to provide information on whether the City is working with the Larimer County Board of Health
regarding air quality impacts from oil and gas development. Lucinda Smith, Director of Environmental Services
provided the following:
“City staff has been in touch with Doug Ryan, Larimer County Department of Health and Environment,
about oil and gas issues. Both City and County staff are supportive of the upcoming Front Range
emissions study. This study is awaiting funding and will enable CSU to conduct a three (3) year study
of oil and gas emissions very similar to the current ongoing study in Garfield County. The project is
expected to begin in July 2013 and continue through June 2016. While no contact between City staff
and the Larimer County Board of Health has occurred, staff members are sharing information that
is of concern to the boards.”
March 5, 2013 -3- ITEM 29
Longmont Resolution Options
Staff was also asked to provide options for Council consideration regarding Resolution 2013-012 (City of Longmont).
Staff suggests the following options:
• Provide Longmont a copy of the Resolution
• Extend an offer to work jointly on legislative changes related to providing clarity on home rule authority
• File an amicus brief
STAFF RECOMMENDATION
If the Council wishes to ban, staff recommends the ban be limited to hydraulic fracturing and storage in the City limits–
Option 2.
Staff recommends that the Moratorium continue except in situations where a Council-approved operator agreement
is in place.
ATTACHMENTS
1. Copy of First Reading Agenda Item Summary - February 19, 2013
(w/o attachments)
2. Copy of First Reading Agenda Item Summary – December 4, 2012 (LUC & Moratorium)
(w/o attachments)
3. Copy of Ordinance No. 145, 2012 establishing the Moratorium
4. Powerpoint presentation
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ATTACHMENT 1
DATE: February 19, 2013
STAFF: Laurie Kadrich, Dan
Weinheimer, Wanda Nelson
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 26
SUBJECT
Items Relating to a Ban of Hydraulic Fracturing and Certain Storage of Waste within the City.
A. First Reading Ordinance No. 032, 2013 Amendment to the City Code Which Would Impose a Ban on
Hydraulic Fracturing and Certain Storage of Waste within the City.
OR
Resolution 2013-011 Submitting to the Registered Electors of the City a Proposed Amendment to the City
Code Which Would Impose a Ban on Hydraulic Fracturing and Certain Storage of Waste Within the City
(Operator Agreement in place).
AND
B. Resolution 2013-012 Requesting Statutory Power to Regulate Oil and Gas Exploration and Production,
Supporting the City of Longmont in its Litigation with the State of Colorado Concerning the Regulation of Oil
and Gas Exploration and Production and Authorizing Negotiations with Larimer County Regarding Oil and Gas
Regulations in the City’s Growth Management Area.
Staff also requests Council direction regarding which option(s) to prepare for future Council consideration
regarding City-owned lands outside the city limits.
EXECUTIVE SUMMARY
On February 5, 2013, City Council directed staff to prepare City Code changes prohibiting the use of hydraulic
fracturing, and limiting the open pit storage of waste or flowback created in connection with the fracturing process in
the city limits. Those changes are reflected in the proposed Ordinance No. 032, 2013. If no action is taken on
Ordinance No. 32, 2013, staff prepared an optional resolution for Council to consider:
• Resolution 2013-011 Submitting to the Registered Electors of the City a Proposed Amendment to the City
Code Which Would Impose a Ban on Hydraulic Fracturing and Certain Storage of Waste With the City
(Operator Agreement in place).
In addition to the options presented banning hydraulic fracturing, staff developed Resolution 2013-012:
• requesting the Governor and Attorney General support the Colorado General Assembly in enacting legislation
that will explicitly grant power for home rule cities in the State of Colorado to regulate oil and gas exploration
and production within municipal boundaries
• supporting the City of Longmont in its litigation with the State of Colorado concerning the power of home rule
cities to regulate the exploration for and production of oil and gas development
• directing negotiation with the Board of Commissioners of Larimer County for the establishment of County
regulations on oil and gas exploration outside the City, but within the Fort Collins Growth Management Area.
BACKGROUND / DISCUSSION
In December 2012, City Council authorized a moratorium preventing any further drilling of oil and gas wells in the city
limits or on City-owned lands until July 31, 2013. Since that time, citizens asked the Council to consider banning
hydraulic fracturing in the city. During the January 22, 2013 Work Session, Council discussed the pros and cons
related to banning hydraulic fracturing (Attachment 10). Following this discussion staff was directed to prepare a
Resolution banning hydraulic fracturing and storage of related waste materials for the February 19, 2013 regular
Council meeting.
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Council also asked that the staff report include more information on local geology, scientific data relative to hydraulic
fracturing, the likelihood of local earthquakes due to fracturing, and the financial impacts of a ban or an adverse
incident if hydraulic fracturing were not banned.
Staff was further directed to pursue an operator agreement with Prospect Energy seeking compliance with the strictest
measures proposed for Land Use Code adoption prior to the implementation of a moratorium. During a Council
meeting on February 5, 2013, staff was asked to prepare an Ordinance banning hydraulic fracturing and open pit
storage except on existing well or operating pad sites, or if the pad site becomes the subject of an operator agreement
with the City. Council also asked staff to develop options for regulating or banning hydraulic fracturing on City-owned
lands outside the city limits.
On February 11, 2013, the Colorado Oil and Gas Commission (COGCC) adopted rule changes moving setbacks from
well pads to 500 feet in most areas and 1000 feet from buildings that house larger numbers of people. This change
reduces the area that may be subject to oil and gas development to 11% inside the City limits.
Geology
Staff was asked to review the geology beneath Fort Collins and adjacent lands to determine what potential oil and gas
resources may exist. Staff reviewed information provided by geologists at Colorado State University (CSU), the
Colorado State Geologist, and the United States Geological Survey (USGS). Most of the academic and professional
mapping and articles available on the North Front Range focus on the Greater Wattenberg Area (GWA); very few
mention Fort Collins or the Fort Collins Field by name. Geologists cite the lack of information as an indication of a low
probability of oil and gas production within the community. In 2009, the Natural Areas Department, as part of the
Energy by Design project, developed a map depicting potential oil and gas development (Attachment 8). Mapping of
oil and gas development potential indicates that the most likely production area is expected in the northern part of Fort
Collins, where the present field exists (Attachment 9). Recent activity in Northern Colorado has focused on the
Niobrara formation ; in Fort Collins, the Niobrara development potential is estimated as “moderate” (Attachments 8
or 9).
Potential Fort Collins Oil and Gas Activity
To determine oil and gas potential, staff reviewed the historic record of drilling in Fort Collins, the current operations,
and the regional geological information.
• The historic record indicates that the Muddy “J” has been the only productive formation in Fort Collins.
Niobrara development has been the focus of the recent activity in the Greater Wattenberg Area.
• Prospect Energy indicates that current operations have targeted the Niobrara formation but those efforts have
not proved economical.
• The geologic record indicates that the Niobrara is located near the surface in Fort Collins and the Niobrara
is not deep enough to yield quality gas or oil.
Fort Collins
The wells drilled within the Fort Collins Field were drilled with several target formations in mind. Initially, wells drilled
in 1925 sought to reach the Hygiene (Pierre Shale) or the Muddy “J” sandstone. This is consistent with the discovery
in 1923 of oil from the Muddy “J” in the Wellington Field to the north of Fort Collins. The Wellington Field was the first
set of wells producing from the Muddy “J” in the Denver Basin. Muddy “J” sandstone near Fort Collins exists at a depth
of approximately 4,500 feet with an average thickness of 25 feet. Going east from Fort Collins, there is greater depth
beginning along Interstate 25. The shallow portions of the rock to the west of the City are not likely to have marketable
oil and gas supplies. Prospect Energy’s operations in the Fort Collins Field are in the Muddy “J” formation. The
company tested the Niobrara in the Fort Collins Field but has not yet found a well that would be profitable. These
results reflect the historical development of oil and gas in Fort Collins where operators attempted to produce oil and
gas from the Lyons, Lakota, Dakota, Codell, Niobrara and the Hygiene formations. A detailed review of Colorado Oil
and Gas Conservation Commission (COGCC) records indicates the Muddy “J” is the only formation that has ever
profitably produced within Fort Collins. As hydraulic fracturing and drilling technology advance it remains possible that
other formations lying beneath Fort Collins might produce oil and gas. For a more detailed analysis, see Attachment
1.
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ENVIRONMENTAL IMPACTS
Air Quality
Several current studies pertinent to the Front Range or Rocky Mountain region were reviewed to support the following
conclusions (citations are provided in Attachment 2):
• Measurable emissions of several pollutants attributable to drilling, construction, material storage and
treatment, production, and transmission activities from oil and gas operations have been detected, including
the following:
N Nitrogen oxides (NOx) and volatile organic compounds (VOCs) which are ozone precursors
N Hazardous Air Pollutants (HAPS) including several carcinogens (primarily benzene and formaldehyde) and
other air toxics associated with chronic and sub-chronic health effects (respiratory and neurologic disease
and head, throat, and eye irritation)
N Particulate matter including dust and aerosols
N Odors (hydrogen sulfide and odiferous hydrocarbons)
N Nitrogen and sulfur compounds that contribute to visibility impairment (haze) and atmospheric deposition
(acid rain)
N Methane, a potent greenhouse gas and ozone precursor.
• Oil and gas development activities can emit raw (non-combusted) natural gas which has a unique signature
that can be differentiated from motor vehicle emissions and other industrial or combustion sources. Elevated
levels of volatile organic compounds associated with natural gas operations (drilling and venting) were found
in the Front Range area.
• Hydrocarbons emitted from oil and gas activities along the Front Range (primarily propane and other alkanes)
comprise some of the highly reactive precursors important in the complex atmospheric chemistry responsible
for winter ozone formation. Winter ozone formation is a recently discovered phenomenon that has clearly
been attributed to emissions from oil and gas development and production activities in the Green River Basin
(Wyoming) and Uintah Basin (Utah).
• Associated impacts to human health including excess cancer risk and chronic non-cancer health impacts have
been measured at locations within 0.5 miles of active well pad sites. Additional studies, many of which are
currently ongoing, will help to define the potential risk to human health, effectiveness of air emission control
strategies, and potential impacts to air quality from oil and gas development activities.
Water Quality Environmental and Health Concerns
• While there is no scientific consensus and studies are few, there is some indication of a potential link between
high-pressure underground injection (i.e., underground injection wells for wastewater) and gas migration near
the well (movement of methane into groundwater.) The associated risk to humans is that methane that is
found in drinking water sources could potentially build up in confined spaces and cause explosions. Methane
gas is not considered toxic if consumed in drinking water and is not regulated by the Environmental Protection
Agency (EPA) under the Safe Water Drinking Act (SWDA).
N A USGS study by Ellsworth near wastewater wells (Class II Underground Injection Control (UIC)
wells) in Menlo Park, CA suggests the high pressure injection might make well cement cracks more
likely. Findings by other researchers suggest a similar finding, but conclude further research is
needed. Although this may have implications for high pressure injection techniques used in hydraulic
fracturing, there is no scientific consensus on the probability of its occurrence or the mechanisms
involved. Local wells classified as UICs are actually injecting at sub-fracturing pressures; see more
below under earthquakes.
• Most shallow water contamination resulting from hydraulic fracturing and conventional oil and gas production
has been linked to surface activities resulting in releases of wastewater due to accidents, poor management
of wastewater storage and disposal, and illicit dumping.
• Most aquifer contamination (i.e., potential drinking water resources) from conventional oil and gas production
has been linked to well casing failures. There is not enough research for hydraulic fracturing operations to
show a similar link.
In response to public concern and industry growth, the US House of Representatives requested in 2009 that the US
EPA conduct scientific research to examine the relationship between hydraulic fracturing and drinking water resources.
The project planning phase involved agency consultation with other federal agencies, state and interstate regulatory
agencies, industry, non-governmental organizations, and others in the private and public sector to determine the focus
of the study regarding potential impacts on human health and the environment. The primary research focused on
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investigating impacts to drinking water resources. The first progress report on the results of this research was
published by the EPA, December 2012, Study of the Potential Impacts of Hydraulic Fracturing on Drinking Water
Resources, Progress Report, EPA 601/R-12/011, Office of Research and Development.
The research consists of 18 research projects and is organized around five stages of the hydraulic fracturing water
cycle:
1. Water acquisition: What are the possible impacts of large volume water withdrawals from ground and surface
waters on water resources?
2. Chemical mixing: What are the possible impacts of hydraulic fracturing fluid surface spills on or near well pads
on water resources?
3. Well injection: What are the possible impacts of the injection and fracturing process on water resources?
4. Flowback and produced water: What are the possible impacts of both types of wastewater surface spills on
or near well pads on water resources?
5. Wastewater treatment and waste disposal: What are the possible impacts of inadequate treatment of hydraulic
fracturing wastewater on water resources?
The results from the study, which are not expected until 2014, are intended to inform the public and provide
policymakers at all levels with high-quality scientific knowledge that can be used in decision-making. The research
involves collection and analysis of existing data from 24,925 wells that have been hydraulically fractured, complex
modeling conducted by the Lawrence Berkeley National Laboratory, toxicity assessments of 1,858 chemicals
associated with hydraulic fracturing, and case studies. The EPA also manages the two most comprehensive databases
on toxicological data that are used for risk assessments nationally and internationally.
The literature reviews for this study are subject to a separate quality review that assesses the soundness, applicability
and utility, clarity and completeness, uncertainty and variability, and evaluation and review of the data and information
before inclusion in the research. Attachment 3 includes references accepted for inclusion in the EPA report that are
organized by research topic related to water quality. This list is a subset of references reviewed to date that cover the
most relevant research topics being investigated; for a complete list refer to the 2012 EPA report cited above. The EPA
has compiled and continues to search for literature relevant to the research questions posed in this report including
a recent Federal Register notice requesting peer-reviewed data and publications relevant to this study. There has not
been any preliminary data released from this effort.
Waste and Wastewater Environmental Concerns
• Hydraulic fracturing produces higher volumes of wastewater that surface as flowback in a shorter period of
time than conventional drilling techniques. This creates more challenges for capture, storage, and disposal
of wastewater and associated emissions than for conventional drilling operations (e.g., more VOC emissions
if not captured adequately, more potential for accidental spills).
• Wastewater management and disposal may be the single most important issue associated with environmental
and human health protection. The Bureau of Land Management has proposed new requirements for
submission of wastewater management plans prior to drilling. Deep injections of wastes in Class II UIC wells,
not fracturing operations, have been linked to earthquakes to date.
Earthquake Potential in Fort Collins
Water disposal in the oil field involves injecting waste water into a deep disposal well. This process usually increases
pressure in the rock above the native state (pre-water disposal) of the rock. Usually there is not any fluid removed
from the rock, only fluid (wastewater) added, thereby increasing reservoir pressure. Many other industries and the
Federal government also use water disposal wells. There have been noted cases of water disposal wells causing
seismic activity. National Academies of Science concluded a study in 2012 and listed three major findings:
1. “the process of hydraulic fracturing a well as presently implemented for shale gas recovery does not pose a
high risk for inducing felt seismic events;”
2. “injection for disposal of wastewater derived from energy technologies into the subsurface does pose some
risk for induced seismicity, but very few events have been documented over the past several decades relative
to the large number of disposal wells in operation”; and
3. “Carbon Capture and Storage (CCS) due to the large net volumes of injected fluids, may have potential for
inducing larger seismic.”
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The factor that appears to have the most direct consequence in regard to induced seismicity is the net fluid balance.
The Bureau of Reclamation stated it has not done any independent studies regarding hydraulic fracturing or deep
injection wells. However, it did state that the work done between 1999 and 2004 on all the Horsetooth Dams was
performed as mitigation for major seismicity that it defines as much greater than what research reveals is a risk due
to deep injection wells. Locally, a process called waterflooding is used and, in general, operators are required to
maintain pressures that are below fracture gradient and even further lower, based on the last mechanical integrity test,
according to COGCC regulations. In other words, at the Fort Collins Field waterflooding (recycled water), the Muddy
formation maintains pressures near or slightly below original reservoir pressures.
Waterflooding started in the Fort Collins Field as a smaller pilot test in September 1979 after obtaining COGCC
approval. Upon success of the pilot, COGCC approved expansion and the expanded project started in July 1985.
According to the current operator, “We’ve been injecting water for a long time at fairly steady rates without any
recorded seismic events.”
Habitat Fragmentation Resulting From Oil and Gas Development
Several current studies pertinent to the Front Range or Rocky Mountain region were briefly reviewed to support the
following conclusions (For further information and citations see Attachment 4):
• Wildlife impacts and habitat fragmentation from oil and gas activities have been documented, largely for the
Greater Yellowstone and Western Wyoming regions. Species studied include mule deer, pronghorn, and
greater sage-grouse. The studies largely focused on how migration patterns and winter habitat use could be
or have been affected by oil and gas development.
N Mule deer migration patterns changed in the initial year of oil and gas development. Migration patterns
did not appear to acclimate three years after well establishment. Instead, mule deer migration
patterns continued to drift further from the well pad development areas. High value habitat areas prior
to the study shifted to low habitat values throughout the study.
N A further study found that mule deer abundance for the herds in the same area had declined by 23%
during 2001-2010, where the oil and gas development had expanded.
N One recent study has also examined the impact of oil and gas development on sagebrush-dependent
songbirds (Gilbert and Chalfoun 2012). Some species, which are generally more tolerant to
disturbance, such as the Horned lark (Eremophila alpestris) did not respond to increases in well
densities. However other species, such as the Brewer’s sparrow (Spizella breweri) and sage sparrow
(Amphispiza belli) which are dependent on sagebrush communities, had significant population
decreases as oil and gas well density increased, suggesting there may be significant impacts to
sagebrush-obligate species. A comprehensive synthesis of oil and gas impacts was recently
compiled by The Wildlife Society in 2012. In addition to the issues addressed above, the report also
identifies increased noxious weed invasions, impacts to waterfowl from wetland impacts, and the
potential for increased competition between deer and elk as highly valued habitat is used for oil and
gas development. The report also highlights that the cumulative effects of habitat fragmentation,
overall loss, and degradation may prove to have the most impact on wildlife.
• Horizontal drilling may reduce the overall impacts of habitat fragmentation, as multiple areas of land can be
accessed from a single well pad. However, it is difficult to know the extent of this reduction without further
study.
• Based on the studies available, habitat fragmentation effects from oil and gas development appear to be
better understood at the landscape level, e.g., how oil and gas development affects pronghorn and mule deer
migration patterns. Thus, the findings from these studies may be best applied at the regional scale, e.g.,
Larimer County and the Rocky Mountain Foothills.
• Staff did not find any research that compared the habitat fragmentation effects of oil and gas development
in rural or open undeveloped lands with those in more traditional urban development.
FINANCIAL AND SOCIAL IMPACTS
A true triple bottom line analysis includes an assessment of environmental, social, and economic impacts. Staff
analysis to date has focused on potential and possible environmental impacts if hydraulic fracturing is allowed. Staff
however, was unable to conclusively determine financial impacts of any health and safety hazard related to hydraulic
fracturing due to the significant number of variables that relate to the hydraulic fracturing process, transportation of
material and waste produced, and removal of waste materials. A social impact analysis has not yet been undertaken
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for this discussion. It is assumed that social impacts of hydraulic fracturing are discussed and addressed in terms of
concerns about health impacts, impacts to property and housing values, and quality of life.
Should hydraulic fracturing be banned, the City would likely need to prepare for the costs associated with a lawsuit
since similar ballot measures have resulted in lawsuits being filed. The City of Longmont is being sued by the State
of Colorado for its regulation of drilling, and by the industry (Colorado Oil and Gas Association (COGA)) for its citizen-
approved ban on hydraulic fracturing.
If the City bans hydraulic fracturing, this action would prohibit any use of this treatment in the Fort Collins Field.
Whether the local operator, Prospect Energy, would be able to present a claim for damages is unknown. There are
other fracturing technologies that have seen limited use and for which there may be limited equipment available for
field use (See Attachment 5).
There could be a loss of local revenues generated from oil and gas development within the city limits. Revenues for
the last two years average $215,460 annually. This revenue is based on state formulas that include well sites, jobs,
roads and other measures to determine the revenues sent to individual communities. It is difficult to estimate what
impact the loss of future wells or reduced production would have on this amount received by the City.
STATUS OF OPERATOR AGREEMENT
Prospect Energy and City staff have discussed possible terms of an agreement but no formal option is ready for
Council review at this time.
OPTIONS FOR RESTRICTING HYDRAULIC FRACTURING ON CITY-OWNED LANDS OUTSIDE THE CITY LIMITS
1. Include restrictions on City-owned lands outside of the city limits in the ban on hydraulic fracturing.
2. Include these restrictions in any Land Use Code requirements following the moratorium.
3. Extend the moratorium on City-owned lands and apply for Designated Outside Activity Areas status through
the COGCC.
4. Utilize the Energy by Design Process for mineral rights owned by the State Land Board (SLB) and extend
those requirements to other mineral owners through the adoption of surface use agreements.
5. Utilize the Energy by Design Process for mineral rights owned by the SLB and develop surface use
agreements for other mineral interests that reflect best practice or meet the Land Use Code during the time
the mineral right is extracted rather than committing to the Energy by Design process at this time.
Natural Areas staff was consulted about the potential for a hydraulic fracturing or drilling ban on lands owned by the
City that are outside the city limits, including Soapstone Prairie Natural Area and other natural areas. Natural Areas
staff recommends against a ban. The recommendation is based on a variety of factors, but in particular relates to
Soapstone and Meadow Springs Ranch (a Utilities property) for the following reasons:
Staff learned that, in the absence of horizontal hydraulic fracturing, there is a some likelihood that smaller companies
will lease minerals and drill vertically. Vertical wellheads could be placed on the ground at densities of one well per
20 to 35 acres. That density of activity would be very destructive to the surface of Soapstone and Meadow Springs.
Hydraulic fracturing densities potentially could be kept to perhaps one five to ten acre well pad (with multiple wellheads)
per section (640 acres), or perhaps even less. This would be far better for the natural, cultural, and scenic resources
the City is trying to protect.
The City Council approved a Memorandum of Understanding with the State Land Board (SLB) regarding a cooperative
effort to undertake an Energy by Design (EBD) process The attached memo (Attachment 7) describes that effort.
The final EBD report was presented to the public in September, and is to be reviewed by the SLB commissioners this
month. The SLB took an unprecedented and major step forward by engaging in the EBD process, partly in response
to the strong urging of the City of Fort Collins. Implementation of Energy by Design would place strict limits on mining
activities, far stricter than any regulation or practice that staff is aware of in the State of Colorado in a similar
environment.
Staff is concerned about the implications of an effort by the City to ban drilling or hydraulic fracturing on these lands
and the negative impact that would have on the collaborative relationship the City has built with the SLB, as well as
on the Energy by Design approach that has been developed and is being reviewed. It is difficult to predict how the
SLB would approach leasing of minerals on the City’s property in this event, but the collaborative approach developed
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through the EBD process would be put in jeopardy. Under the terms outlined in the EBD, mineral owners and /or
lessees will be required to enter into an Operator Agreement or Surface Use Agreement with the City prior to any
surface disturbance associated with exploration or production. This agreement will contain requirements much stricter
than current State regulations and will implement the avoidance and mitigation strategies outlined in Energy by Design.
The State Land Board is a partner in the planning process and will recognize and support the use of EBD. Further,
Council approval is required for the City to enter into the Operator Agreement or Surface Use Agreement.
In summary, Natural Areas negotiated with the SLB to create a potentially much better on-the-ground situation.
Further, Natural Areas believes that patient planning, negotiations, and the use of multiple strategies will obtain the
best possible long-term results. While there are substantial risks associated with this approach, staff believes they
are far less than those posed by a hydraulic fracturing or drilling ban.
STAFF RECOMMENDATION
Staff recommends the following actions:
• Adoption of Ordinance No. 032, 2013, on First Reading and Resolution 2013-012, as opposed to placing the
question on the ballot.
• Limit restrictions to lands within the city’s boundary and not include restrictions on City-owned lands outside
the city boundaries
• Direct staff to continue developing Code language regulating oil and gas exploration to the greatest extent of
its home rule authority
• Direct staff to prepare an operator agreement for Council consideration with Prospect Energy.
BOARD / COMMISSION RECOMMENDATION
There has not been any additional board or commission review since the moratorium was authorized in December
2012.
PUBLIC OUTREACH
There has not been any additional public outreach specific to the Ordinance and Resolutions proposed.
ATTACHMENTS
1. Geology Memorandum, Dan Weinheimer, City of Fort Collins Policy and Project Manager
2. Air Quality Memorandum, Melissa Hovey, City Senior Environmental Planner
3. Water Quality Memorandum, Bonnie Pierce, City Environmental Data Analyst
4. Habitat Fragmentation Memorandum, Lindsay Ex City Environmental Planner
5. Options to Hydraulic Fracturing, Bonnie Pierce, City Environmental Data Analyst
6. Natural Areas Memorandum of Understanding
7. Natural Areas Memorandum, John Stokes, City Natural Areas Director
8. Map Oil and Gas Potential
9. Map (detailed Fort Collins) Oil and Gas Potential
10. January 22, 2013 Work Session Summary
11. Powerpoint presentation
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ATTACHMENT 2
DATE: December 4, 2012
STAFF: Laurie Kadrich
Dan Weinheimer
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 26
SUBJECT
Items Relating to Oil and Gas Exploration and Production Regulations.
A. First Reading of Ordinance No. 144, 2012, Amending the Land Use Code Pertaining to Oil and Gas
Exploration and Production Regulations (Option A or B).
AND/OR
B. First Reading of Ordinance No. 145, 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 of Fort Collins (Option C).
EXECUTIVE SUMMARY
City Council directed staff to evaluate methods by which the City may regulate oil and gas exploration and production.
Since oil and gas operations are governed primarily by the state and federal governments, staff will provide an
overview of what regulations exist and where the City may be effective in both filling existing regulatory “gaps” and
strengthening existing regulations in order to better protect the health and safety of residents. Discussion includes
development review criteria, water and air quality, environmental protections, and emergency services. Staff also
presents information on non-regulatory ways to respond to residents’ concerns including options such as surface-use
and operator agreements, legislative advocacy, regional cooperation, and active participation in related state and
federal rulemaking processes.
Staff is providing three options for Council’s consideration:
• Option A: Dual-track development review process
• Option B: Single-track development review process
• Option C: Moratorium
BACKGROUND / DISCUSSION
Existing oil and gas activity in the city:
Oil production is currently limited to the Fort Collins Field, located in the northeast portion of the city. The Fort Collins
Field is regulated by the Colorado Oil and Gas Conservation Commission and has been in production since about
1925. In the City limits, the field consists of seven producing wells and seven injecting wells within the City limits, all
of which are managed by one operator. Four residential subdivisions have developed around the Fort Collins field,
with an additional subdivision planned in the area.
In addition to the Fort Collins field, well development has historically occurred southward along the I-25 corridor. There
are no active wells in this area today. As all wells were subsequently annexed into City boundaries, there have been
no permits issued to date in the City of Fort Collins.
Two recent developments may result in significant changes in oil and gas exploration in Larimer County. 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 to extract the resource from within deeply located shale
deposits. This has raised considerable public concern.
Existing regulations
Because oil and gas exploration and production is regulated by the state in Colorado, local jurisdictions are limited
in their ability to control the location, procedures, and impacts of oil and gas drilling in and around their boundaries.
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A combination of the state’s laws and several court cases have resulted in the preemption of local control over various
aspects of oil and gas activities, and the scope of that preemption is the subject of ongoing litigation..
Accordingly, existing oil and gas regulations in the Land Use Code are limited to a single paragraph in Section 3.8.14
and 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.”
This section indicates that all oil and gas operations are subject to a Type 2, or Planning and Zoning Board review.
This paragraph also suggests that oil and gas operations are subject to the standards set forth in the Land Use Code,
to the extent that they are not preempted by the state.
DISCUSSION - Proposed Framework for Oil and Gas Operations:
As discussed above, the City has a shared authority with the state and other agencies for controlling how oil and gas
operations occur both above and below ground. Typically, the City’s Land Use Code serves as the primary mechanism
for land development in the City. However, because of the shared authority with the state, staff has identified a number
of methods to address specific community concerns and better address oil and gas operations at local levels. Staff
recommends that the City engage at the federal, state and regional levels, as well, to better affect regulations or ensure
compliance with regulations.
Federal
The federal level options are aimed at influencing the Environmental Protection Agency and other regulatory bodies
to gain more stringent oversight of oil and gas operations. The EPA intends to have a new set of operating criteria
for oil and gas in place in 2015 and City of Fort Collins staff intends to comment on whether those policies are
implemented at a statewide or local level. Significant costs may be incurred by the City if implemented locally rather
than utilizing existing statewide resources.
In addition to influencing governmental agencies at the federal level, the City can also utilize federal research,
programs, and services to ensure oil and gas operations both within the City’s boundaries and at a regional level do
not degrade quality of life.
State
Colorado permits oil and gas activity through the Colorado Oil and Gas Conservation Commission (COGCC). In
addition to the COGCC, two other state agencies have a role in oversight of oil and gas operations – the Colorado
Department of Public Health and the Environment (CDPHE) and the Colorado Department of Parks and Wildlife
(DPW). CDPHE’s oversight is focused upon the potential and actual impacts of oil and gas activity on human health,
specifically with regards to air and water quality. The DPW, a sister agency of the COGCC under the Department of
Natural Resources, has oversight of habitat and wildlife protection.
The state-level options include the following opportunities for City involvement:
• Engage in stakeholder processes – As with the federal level engagement opportunities, the City can
participate in stakeholder processes to affect the rules at the state level that affect oil and gas operations.
• Local Government Designee – This tool establishes a staff representative who participates in the state’s
review of oil and gas applications and provides local comments onto the oil and gas applications at the state
level.
• Intergovernmental Agreement (IGA) with the state – An IGA could allow for the City to have inspection
authority, which would increase the oversight of oil and gas operations within city limits.
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• Advocating for legislative change – The City can engage in legislative discussions to influence the state
and other municipalities. Fort Collins’ Legislative Policy Agenda calls for supporting legislation to provide
communities with more tools to address the industry and more power over local land use.
• Designated Outside Activity Areas – This tool allows for an area, e.g., City Park, to receive the same 350-
foot setback that high density areas receive. The City applies for this designation through the state on areas
in the City that meet certain qualifications, e.g., a certain number of users per day or per year. Longmont has
successfully received approval for two City park complexes.
Regional
Regional solutions include addressing some impacts of oil and gas activity collaboratively with other local
governments. These collaborations include hiring a shared inspector to effectively balance the ability to inspect local
wells with the number of existing wells and anticipated activity. Staff initiated conversations with several jurisdictions
about sharing an inspector.
The regional level also presents a partnership opportunity with other municipalities, counties, and researchers to
address issues that go beyond our city borders, e.g., air quality. Intergovernmental agreements to share monitoring
resources and equipment for air quality are one tool the City could explore. From a research perspective, faculty at
Colorado State University is examining air emissions from well sites in Garfield County beginning in spring 2013
through fall 2015. The results of this study, funded jointly by the County and industry, are anticipated to provide a
better understanding of the toxicity of well emissions. Staff met with the faculty associated with this study, as well as
others at CSU who are examining air emissions and regional impacts from oil and gas operations, and will utilize the
lessons learned from these research efforts to recommend changes to local regulations.
Local
The local solutions include at least five mechanisms to address oil and gas operations to ensure community concerns
are addressed and residents’ quality of life is protected:
• Local Government Designee – This tool establishes a staff representative who participates in the state’s
review of oil and gas applications and provides local comments onto the oil and gas applications at the state
level.
• Operator Agreements – A negotiated agreement between the City and any operator wishing to conduct oil
and gas operations in the City. The agreement could include additional, prescriptive requirements such as
enhanced baseline and ongoing monitoring.
• Intergovernmental Agreement with the state – An IGA could allow for the City to have inspection authority,
which would increase the oversight of oil and gas operations within city limits. It also provides opportunities
for partnering with our surrounding municipalities on a regional basis for inspection authority.
• Surface Use Agreements –A negotiated agreement between the landowner and any operator wishing to
conduct oil and gas operations providing another mechanism to obtain enhanced conditions.
• Land Use Regulations – A set of regulations and control mechanisms that are protective of public health and
the environment. The Land Use Code amendments before Council include Option A (a dual-track
development review process) and Option B (a single-track development review process). The regulatory
options are described in greater depth below.
Land Use Regulations – Review Processes
Two options are presented related to Land Use Code regulations:
• Option A: Dual-track development review process, which includes both an expedited and standard review
process
• Option B: Single-track development review process – This option combines the prescriptive criteria in the
expedited review track with the standard review process. Under this option, all development review
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applications would be processed under a single review track and required to meet the same criteria. All
decisions would be made by the Planning and Zoning Board.
The review processes for the dual-track development review processes are outlined in Table 1 below (see Table 2 for
the single-track review process). The Standard Review process requires the operator to locate a well and operate in
a manner that does not degrade quality of life (e.g., adjacent land uses, natural resources, water quality, air quality,
visual and scenic resources, etc.). The Standard Review process also requires operators to attend a neighborhood
meeting and a hearing in front of the Planning and Zoning Board, pursuant to the Type 2 standards currently outlined
in the Land Use Code. The regulations outlined in the Standard Review process however, are more goal-based than
prescriptive.
Alternatively, the Expedited Review process requires operators (who voluntarily choose this option) to meet specific,
objective criteria prescribed in the review process. By meeting these more prescriptive standards, staff proposes that
public comments only be taken in a written format and that the Director of Community Development and Neighborhood
Services has the final decision-making authority.
This dual-track review process is a model utilized by other local governments to address oil and gas development and
has achieved some success in engaging operators in meeting specific objective criteria.
Table 1: Option A: Dual-track review process, including the standard and expedited review processes, notice
requirements, and decision-making authority.
Element Standard Review Process
(Type 2 Review)
Expedited Review Process
(Basic Development Review)
Regulations Must locate a well and operate in a
manner that does not degrade
quality of life
Must meet ALL specific, prescriptive criteria
Notice
Requirements
Notification sent when an
application is received, prior to a
neighborhood meeting and prior to
the hearing
Notification sent when an application is received and
if an application is approved
Public Comments Written comments can be provided
prior to or at the public hearing
Residents and affected parties can
testify at the public hearing
Written comments can be provided after the
notification that an application has been received
Decision-making
authority
Planning and Zoning Board
approval
Director approval
Setbacks If not located on an existing well pad, all operations
must be 500’ from an occupied structure, water well,
Natural Area or City Park and 150’ from any property
line
Appeals Decisions are appealable to City
Council
Decisions can be appealed in District Court
Table 2: Option B: Single-track review process
Element Review Process
Regulations Must meet ALL specific, prescriptive criteria
Notice Requirements Notification sent when an application is received, prior to a neighborhood meeting and
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Appeals Decisions are appealable to City Council
Land Use Regulations – Proposed Standards
All new oil and gas operations will be subject to the requirements in either the standard review or expedited review
track, (Table 3) unless Option B is adopted by Council and then the standards in expedited review will prevail.
Common areas for oil and gas operators to address in submittals include air quality, water quality, and natural resource
protection. Within each area the standards differ based upon the review process. The conditions offered for standard
review consist largely of plans and information about proposals for preventing or mitigating community impacts.
Table 3: This table outlines the standards for air quality, water quality, natural resources standards, general
standards and reciprocal setbacks associated with both the standard and expedited reviews.
Regulation
Option A Option B
Standard Review Expedited Review
Air Quality
Minimize all emissions 95% VOC
(Volatile Organic
Compounds)
destruction
98% VOC destruction 98% VOC destruction
Flares and combustion
devices
-No open flares
-Automatic flame
ignition system
-No open flares
-Automatic flame ignition system
with surveillance
-No open flares
-Automatic flame ignition system
with surveillance
Pollution Prevention -Leak Detection
Program Required
-Air Quality Mitigation plan
required
- Leak Detection Program required
-Reduce methane emissions
during maintenance
-Air Quality Mitigation plan
required
- Leak Detection Program
required
-Reduce methane emissions
during maintenance
Containment Must ensure no
significant
degradation
Require Closed Loop Pitless
systems
Require Closed Loop Pitless
systems
Pneumatic Controllers Must ensure no
significant
degradation
Use no or low bleed devices Use no or low bleed devices
Electric Engines Required for
pumping units and
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Regulation
Option A Option B
Standard Review Expedited Review
Water Quality
Water Quality
Monitoring Plan
Must ensure no
significant
degradation of
water quality
Baseline monitoring within ½ mile:
-Sample four sites
-Sample multiple aquifers
-Sample up and down gradient
Baseline monitoring within ½
mile:
-Sample four sites
-Sample multiple aquifers
-Sample up and down gradient
Conduct Subsequent
Monitoring
Must ensure no
significant
degradation of
water quality
Monitor at same locations 1, 3, and
6 years after well completion
Monitor at same locations 1, 3,
and 6 years after well completion
Soil Gas Monitoring Must ensure no
significant
degradation of
water quality
-Monitor soil gas within 90 days of
well completion
-Results may trigger additional
groundwater monitoring
-Monitor soil gas within 90 days
of well completion
-Results may trigger additional
groundwater monitoring
Natural Resources
Natural Resources
Protection
Must ensure no
significant
degradation
-Must be set back 500 feet from a
waterbody, stream, wetland,
Natural Area or Park
-Compliance with all buffer
standards
-Cannot qualify if within 500 feet
of a waterbody, stream, wetland,
Natural Area or Park
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Regulation
Option A Option B
Standard Review Expedited Review
Noise Use an acoustically insulated cover to enclose the motor or engine
All production equipment used shall comply with the noise levels in our Municipal Code
in residential zones
Reciprocal setbacks – applies to future residential development proposals in proximity of oil and gas
operations
Abandoned and
plugged wells
Setback ranges from 20-50 feet from the abandoned and plugged well, based on
screening, berming, and fencing options
Any oil and gas well
that has not been
plugged and
abandoned
Setback ranges from 150-250 feet from all other wells, based on screening, berming
and fencing options
From a safety perspective, the minimum setback should never be less than 150’
FINANCIAL / ECONOMIC IMPACTS
Adoption of the Land Use Code regulations, in either Option A or Option B will require interdisciplinary oversight in the
development review process beyond the typical development review process. For example, additional staff time from
representatives from Environmental Sustainability and Utilities will be required to evaluate the air and water quality
elements of any proposed oil and gas operation.
If Council indicates staff should continue to pursue the non-regulatory options, e.g., the Local Government Designee,
Intergovernmental Agreements for inspection authority, etc., then the financial requirements from the City will increase.
Funds for these efforts have been allocated through the 2013-2014 Budget (Offer 197.2 Oil and Gas Liaison).
ENVIRONMENTAL IMPACTS
While the proposed Land Use Code regulations are designed to protect the City’s quality of life, sense of place, and
public health, oil and gas drilling within the city still 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, there are high volumes of truck and heavy equipment
associated with oil fields.
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, both
within and outside of the City, are threatened by this fragmentation. 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
Staff presents the following options to the Council for consideration:
Option A: Dual-track development review process
This option includes both expedited and standard review.
• The expedited review track requires operators to meet specific, objective criteria and agree to increased
setbacks, e.g., 500 feet from an occupied structure, water body, natural area, or City park and 150 feet from
any property line. By electing to meet these more prescriptive standards, a public hearing and neighborhood
meeting are not required. Instead, notification is provided when an application is received, and if an
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application is approved. Written comments can be submitted to the Director during the review process. The
Director has the final decision-making authority.
• The standard review track requires the operator to locate a well and operate in a manner that does not
significant degrade our quality of life. All standard review applications are subject to a neighborhood meeting
and a public hearing before the Planning and Zoning Board. All Board decisions are appealable to the City
Council.
Option B: Single-track development review process
This option combines the prescriptive criteria in the expedited review track with the standard review process. Under
this option, all development review applications would be processed under a single review track and be required to
meet the same criteria. All decisions would be made by the Planning and Zoning Board.
Option C: Moratorium
Local governments have considered the use of moratoriums to prevent new oil and gas operations within their
jurisdictions, citing the need to craft and adopt local land use regulations and/or to allow the state to address its
rulemaking process as it relates to setbacks and water quality regulations.
Current State Efforts Related to Oil and Gas regulation
The Colorado Oil and Gas Conservation Commission is currently addressing its rules by considering amendments to
water sampling and monitoring as well as addressing well setbacks and noise. The City secured Party Status for both
rulemaking hearings, making Fort Collins the only city with such status and providing the City with an opportunity to
submit comments on the state’s proposals, recommend alternatives, and a greater length of time to speak before the
Commission.
The state is reviewing its existing setback rules. New rules are anticipated to be in place early in 2013. Setbacks for
new wells from existing homes are an important consideration for several reasons – there is uncertainty about
emissions from well sites and the process of drilling and maintaining a well site could cause noise, traffic and light
impacts. The current setbacks for new wells are 150 feet from an occupied structure, 350 feet from a high density area
and 500 feet from some structures like hospitals, schools, and nursing homes. Many groups recommend increasing
the state setbacks from homes to 1,000 or even 2,000 feet. The City of Fort Collins will seek additional setback
distance, greater powers for residents in influencing site location proposals, and protection for community assets like
natural areas and parks.
Water quality is another area that the Commission is currently addressing. The proposal under consideration adopts
an industry-sponsored voluntary program and makes that program mandatory. Under the program, baseline
groundwater quality samples will be collected from two existing groundwater features, such as permitted and registered
groundwater wells or groundwater seeps and springs, which are located within 1/2 mile of the surface location of new
oil and gas well pads, or additional wells on existing well pads. These samples will be collected before drilling begins.
A second sample will be collected from each groundwater feature within one to three years after drilling is completed.
If the state’s rules on water quality monitoring are amended, the City may also need to modify proposed Land Use
Code regulations as presented in Option A or B or in development submittal requirements.
Staff also requests direction on suggested state, regional, and “other” local options, including:
• Engage in stakeholder processes
• Continue with Local Government Designee
• Pursue an intergovernmental agreement with the State for inspection authority
• Pursue an intergovernmental agreement with the County for the GMA
• Advocate for more legislative change
• Consider entering into an operator agreement with the producer of the Fort Collins Field
• Develop a “model” surface use agreement that can be used for any city-owned lands
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BOARD / COMMISSION RECOMMENDATION
City staff presented the proposed Land Use Code regulations and associated non-regulatory options to numerous City
boards and commissions.
Formal recommendations were made by the Water Board (8-1), the Natural Resources Advisory Board (6-1), and the
Air Quality Advisory Board (7-0) to support the Standard (Type II) and Expedited (Basic Development Review)
processes and associated regulations.
The Land Conservation and Stewardship Board voted 6-0 to support the use of standard review when considering
applications on City-owned Natural Areas. The Board further recommended a six month temporary moratorium on new
oil and gas applications to provide staff with additional time to develop additional options.
While the Air Quality Advisory Board indicated support for the Standard and Expedited review, the Board also
expressed additional non-regulatory options that staff should pursue. These recommendations are included in
Attachment 14.
PUBLIC OUTREACH
A multidisciplinary City staff team worked to develop an understanding of the oil and gas industry, community concerns
related to industry practices, and the statewide regulatory processes in place. This group researched industry
exploration and extraction practices, working closely with peer municipalities throughout the Front Range to identify
and incorporate the best practices of other Colorado municipalities into local regulation of the industry. The research
process included local focus group meetings, formation of an Oil and Gas Advisory Committee that included
representatives from eight City boards and commissions, talking with state experts and meetings with Colorado State
University professors and researchers, Colorado Oil and Gas Conservation Commission staff, and the local oil and
gas operators.
The Oil and Gas Advisory Committee was created to gather input from a diverse group of boards and commissions.
The group met three times as public meetings and provided input to staff on draft regulations. The Committee included
self-selected representatives from eight City boards and commissions, including the Air Quality Advisory Board,
Economic Advisory Commission, Energy Board, Land Conservation and Stewardship Board, Natural Resources
Advisory Board, Parks and Recreation Board, Planning and Zoning Board, and Water Board.
Staff conducted meetings with small groups of interested citizens. Residents of the Hearthfire subdivision met with
staff and continued to communicate over the course of the project. Outreach included a focus group with
representatives of local environmental groups before and after the development of draft regulations. Staff met with
Don’t Frack the Fort, a group generated by mutual concern over hydraulic fracturing in the community, four times.
Staff attended numerous public meetings on the subject of oil and gas development hosted by other groups.
ATTACHMENTS
1. Maps associated with Oil and Gas activity
2. Council Work Session Summary, August 14, 2012
3. Matrix comparing best practices of communities
4. Oil and Gas Manual*
5. Oil and Gas Development Review Guide*
6. Advisory Group Summary
7. Letter to Larimer County
8. Public Comments
9. Planning and Zoning Board minutes, November 1, 2012
10. Water Board minutes, October 18, 2012
11. Water Board memo re: proposed Land Use Code regulations
12. Land Conservation and Stewardship Board minutes, October 10, 2012
13. Land Conservation and Stewardship Board minutes, November 14, 2012
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14. Natural Resources Advisory Board minutes, October 17, 2012
15. Air Quality Advisory Board minutes, October 15, 2012
16. Air Quality Advisory Board minutes, November 19, 2012
17. Powerpoint Presentation
(*NOTE: Attachment 4, Oil and Gas Manual, and Attachment 5, Oil and Gas Development Review Guide, are
draft documents and only illustrate Option A, the dual-track review process. If Option B is adopted by Council,
the documents will be revised accordingly.)
ATTACHMENT 3
1
Second Reading
Ordinance No. 032, 2013
Laurie Kadrich
Director, Community Development & Neighborhood Services
Dan Weinheimer
Policy and Project Manager
March 5, 2013 City Council Meeting
ATTACHMENT 4
2
Items for City Council
Consideration:
Option 1: First Reading Ordinance No. 032: Amend
City Code to Ban Oil and Gas Operations and
Hydraulic Fracturing and Storage within the City
(operator agreement in place).
OR
Option 2: Impose a Ban on Hydraulic Fracturing and
Storage within the City (operator agreement in
place).
And
Repeal Ordinance No. 145, 2012
3
What are Oil & Gas Operations?
• Means 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 flowlines 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. Colorado Oil and Gas Commission
(COGCC) definition
4
What is Hydraulic Fracturing?
• A treatment used by the oil and gas industry to
stimulate oil and gas recovery by:
– Injecting fluids, including chemicals, under pressure into
the well
– Designed to fracture geological formations
– Enhance production of oil & gas
– Commonly referred to as “fracking”
5
Well Activity
City Limits &
City-owned
Natural Areas
6
New
COGCC
Rules
89.33%City
Limits
Excluded
from Drilling
(effective 8/1/13)
7
Moratorium Ordinance No. 145, 2012
• Included City-owned property
• In effect until July 31, 2013
• Purposes:
– Primary: to study the impact of uses and new
rules expected by the COGCC and determine
whether additional land use and zoning
regulations are necessary.
– Develop legislative policies
– Draft intergovernmental and operator
agreements
– To complete a new Public Engagement
process for LUC regulations
8
Status of rule-making
• New rules have been adopted for set-back
criteria, August 2013
• Water quality in May 2013
• Rule-making is underway for Colorado
Department of Public Health and Environment -
Air Quality
• General Assembly Bills
– May 8, 2013 Session Ends
9
County Board of Health
• Discussion occurring at a Staff level
• Both are supportive of the Front Range Emissions
study
• Staff are sharing information that is of concern to
both City and County boards
10
Items for City Council
Consideration:
First Reading Ordinance No. 032: Amend City Code
to Ban Oil and Gas Operations and Hydraulic
Fracturing and Storage within the City (operator
agreement in place).
OR
Impose a Ban on Hydraulic Fracturing and Storage
within the City (operator agreement in place).
And
Repeal Ordinance No. 145, 2012
11
Items for City Council
Consideration:
Provide direction to staff on what option(s) to
consider for supporting Resolution 2013-012
supporting the City of Longmont:
1.Provide the City a copy of the Resolution
2.Extend an offer to work jointly on legislative changes related
to providing clarity on home rule authority
3.File an amicus brief
OPTION 1
ORDINANCE NO. 032, 2013
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING THE CODE OF THE CITY OF FORT COLLINS
TO IMPOSE A BAN ON OIL AND GAS OPERATIONS AND
HYDRAULIC FRACTURING AND CERTAIN
STORAGE OF WASTE WITHIN THE CITY
WHEREAS, in December 2012, the City Council authorized a moratorium preventing any
further drilling for oil and gas in the City until July 31, 2013; and
WHEREAS, since that time, citizens have requested that the City Council consider imposing
a ban on hydraulic fracturing in the City; and
WHEREAS, the City Council has determined that in order to preserve the health, safety and
welfare of the City residents, oil and gas operations and hydraulic fracturing should be banned within
the City, as well as the storage in open pits of solid or liquid wastes and/or flowback created in
connection with the hydraulic fracturing process; and
WHEREAS, the City Council has further determined that in order to respect the rights of
existing oil and gas operators in the City, the proposed ban on oil and gas operations and hydraulic
fracturing and storage should not apply to any oil or gas wells or pad sites existing within the City
as of February 19, 2013, provided that the operators of such wells and/or pad sites enter into
satisfactory agreements with the City to regulate their existing and future operations.;
WHEREAS, because the City Council has imposed a ban on all oil and gas operations in the
City, the moratorium imposed by Ordinance No. 145, 2012, should be repealed.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section. 1. tThat Chapter 12 of the Code of the City of Fort Collins is hereby amended
by the addition of a new Article VIII which reads in its entirety as follows:
ARTICLE VIII.
OIL AND GAS OPERATIONS AND HYDRAULIC FRACTURING
Sec. 12-135. Oil and gas operations/Hhydraulic fracturing/open pit storage
prohibited.
All oil and gas operations (as that term is defined in the Rules and Regulations of the
Colorado Oil and Gas Conservation Commission) including, without limitation, Tthe
use of hydraulic fracturing to extract oil, gas or other hydrocarbons, and the storage
in open pits of solid or liquid wastes and/or flowback created in connection with the
hydraulic fracturing process isare prohibited within the City.
Sec. 12-136. Exemptions.
The prohibitions contained in §12-135 shall not apply to any oil or gas wells or pad
sites existing within the City on February 19, 2013, provided that any such wells or
pad sites become the subject of an operator agreement between the operator of the
same and the City, whichas long as such agreement includes strict controls on
methane release and, in the judgment of the City ManagerCouncil, adequately
protects the public health, safety and welfare.
Section 2. That Ordinance No. 145, 2012, of the Council 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 is hereby
repealed.
Introduced, considered favorably on first reading, and ordered published this 19th day of
February, A.D. 2013, and to be presented for final passage on the 5th day of March, A.D. 2013.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
Passed and adopted on final reading on the 5th day of March, A.D. 2013.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
OPTION 2
ORDINANCE NO. 032, 2013
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING THE CODE OF THE CITY OF FORT COLLINS
TO IMPOSE A BAN ON
HYDRAULIC FRACTURING AND CERTAIN
STORAGE OF WASTE WITHIN THE CITY
WHEREAS, in December 2012, the City Council authorized a moratorium preventing any
further drilling for oil and gas in the City until July 31, 2013; and
WHEREAS, since that time, citizens have requested that the City Council consider imposing
a ban on hydraulic fracturing in the City; and
WHEREAS, the City Council has determined that in order to preserve the health, safety and
welfare of the City residents, hydraulic fracturing should be banned within the City, as well as the
storage in open pits of solid or liquid wastes and/or flowback created in connection with the
hydraulic fracturing process; and
WHEREAS, the City Council has further determined that in order to respect the rights of
existing oil and gas operators in the City, the proposed ban on hydraulic fracturing and storage
should not apply to any oil or gas wells or pad sites existing within the City as of February 19, 2013,
provided that the operators of such wells and/or pad sites enter into satisfactory agreements with the
City to regulate their existing and future operations.;
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that Chapter 12 of the Code of the City of Fort Collins is hereby amended by the addition
of a new Article VIII which reads in its entirety as follows:
ARTICLE VIII.
HYDRAULIC FRACTURING
Sec. 12-135. Hydraulic fracturing/open pit storage prohibited.
The use of hydraulic fracturing to extract oil, gas or other hydrocarbons, and the
storage in open pits of solid or liquid wastes and/or flowback created in connection
with the hydraulic fracturing process is prohibited within the City.
Sec. 12-136. Exemptions.
The prohibitions contained in §12-135 shall not apply to any oil or gas wells or pad
sites existing within the City on February 19, 2013, provided that any such wells or
pad sites become the subject of an operator agreement between the operator of the
same and the City, whichas long as such agreement includes strict controls on
methane release and, in the judgment of the City ManagerCouncil, adequately
protects the public health, safety and welfare.
Introduced, considered favorably on first reading, and ordered published this 19th day of
February, A.D. 2013, and to be presented for final passage on the 5th day of March, A.D. 2013.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
Passed and adopted on final reading on the 5th day of March, A.D. 2013.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
-Compliance with all buffer
standards
Existing Vegetation Minimize
disturbance
Preservation of
existing vegetation,
mitigation requirements
Preservation of
existing vegetation,
mitigation requirements
General Conditions that apply to all oil and gas operations, regardless of the review track selected
Emergency Response Must have a plan in compliance with the International Fire Code
- Include emergency contact information for the operator
- Trigger/threshold levels identified to determine when a state of emergency
should be declared
- Spills shall be immediately reported
- Establish a process for the operator to notify neighbors regarding risks and
establish a communication process
Transportation - Access roads and access points shall be provided, reviewed, and approved by the City
- A traffic impact analysis shall be submitted; all street frontage shall be improved in
accordance with the Larimer County Urban Area Street Standards, including street
trees, sidewalk, curb and gutter
- Transportation fees and securities, i.e., bond or letter of credit, provided to ensure no
damage to City streets, including any access routes
Lighting Except during drilling, completion or other activities where worker safety is a concern, all
lighting shall be fully shielded and not spill off the site
Spills Chemical spills and releases shall be reported in accordance with local, state, and
federal laws
Chemical Disclosure All Material Safety Data Sheets (MSDS) shall be provided to the City and Emergency
Personnel
compressors
Required for pumping units and
compressors
Required for pumping units and
compressors
Green Completions
Must ensure no
significant
degradation
Capture gas during completion or
use completion combustion
devices rather than flare or vent
Capture gas during completion or
use completion combustion
devices rather than flare or vent
Air Quality Monitoring Must ensure no
significant
degradation of air
quality
Baseline and well completion
monitoring required, and additional
post-completion testing may be
required if changes in air quality
are identified
Baseline and well completion
monitoring required, and
additional post-completion testing
may be required if changes in air
quality are identified
prior to the hearing
Public Comments Written comments can be provided prior to or at the public hearing
Residents and affected parties can testify at the public hearing
Decision-making
authority
Planning and Zoning Board approval
Setbacks If not located on an existing well pad, all operations must be 500’ from an occupied
structure, water well, Natural Area or City Park and 150’ from any property line