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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/03/2015 - RESOLUTION 2015-098 DIRECTING CITY STAFF TO PARTICAgenda Item 19 Item # 19 Page 1 AGENDA ITEM SUMMARY November 3, 2015 City Council STAFF Dan Weinheimer, Policy & Project Manager SUBJECT Resolution 2015-098 Directing City Staff to Participate in the Ongoing Colorado Oil and Gas Commission Rulemaking Related to the Governor's Oil and Gas Taskforce Recommendations 17 and 20 Endorsing and Adopting the Prehearing Statement Prepared by the City. EXECUTIVE SUMMARY The purpose of this item is to consider a prehearing statement and provide staff direction for the Colorado Oil and Gas Conservation Commission rulemaking. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BACKGROUND / DISCUSSION Governor John Hickenlooper issued Executive Order B2014 005 on September 8, 2014 creating a Task Force on State and Local Regulation of Oil and Gas Operations. The twenty-one member Task Force included representatives from local government, civic organizations, environmental interests, agriculture, and affected industries. In February 2015, consistent with the mandate that proposals required a two-thirds approval of the entire body to be advanced, Task Force sent nine (9) of 36 proposals to the Governor. Two of the Task Force proposals - recommendations 17 and 20 - are subject to upcoming Colorado Oil and Gas Conservation Commission (COGCC) rulemaking. Other proposals could be implemented without rulemaking. Both recommendations are meant to facilitate greater collaboration and information sharing between oil and gas operators and local governments. Recommendation 17 will address local government collaboration with oil and gas operators concerning locations for “Large Scale Oil and Gas Facilities” in “Urban Mitigation Areas,” as defined in COGCC rules. Recommendation 20 will require operator registration with a city’s Local Government Designee (“LGD”), and upon the request of a municipal LGD, submission of operational information for the purpose of incorporating potential oil and gas development into local comprehensive plans. The City has secured “party status” for the rulemaking and a multidisciplinary staff team has been engaged in prehearing preparations. The COGCC plans to conduct the rulemaking hearings November 16 and 17 in Denver. In accordance with the COGCC process, staff has submitted a prehearing statement which was limited to five (5) pages and a redline of the draft rules. A second written statement rebutting other party’s statements must be submitted by November 6. At the hearings parties will be able to offer oral comment and present additional written information. For this rulemaking, COGCC staff announced its intention to adopt new rules to incorporate recommendations 17 and 20. COGCC engaged in a prehearing stakeholder process that included convening groups of local governments (including Fort Collins) and oil and gas operators. These groups provided both oral and written comments. COGCC staff has published draft rules. Fort Collins submission reflects a desire to modify the draft Agenda Item 19 Item # 19 Page 2 COGCC rules in order to reflect community desires for human health, property value and environmental protections. Positive steps included in the implementation of these Task Force recommendations: • Proposal to require an operator contemplating a Large UMA Facility to offer to engage the city at least 90 days before filing for a permit with COGCC • COGCC recommends having local government engaged before a surface use agreement is consummated, allowing some City input into the location of a proposed Large UMA Facility • COGCC proposes to give local governments input into the drilling and operational practices used on- site • COGCC will impose mitigation measures meant to limit impact of Large UMA Facility • COGCC proposes that oil and gas operators register their five-year (5) plan to drill with the Local Government Designee (LGD) • The business plan registration includes the City limits and growth management area (GMA) Areas for Improvement: • Staff considers the proposed definition of a Large UMA Facility as too large - COGCC draft rule equates large to eight (8) wells on a site and staff would recommend four (4) • It is unclear how COGCC arrived at the draft parameters or what nexus the draft rules have to addressing human, property or environmental impacts • COGCC’s definition of Large UMA Facility is limited to mitigating the impacts associated with drilling and does not consider impacts from a Large UMA Facility throughout the lifecycle of a well including long-term air emissions, environmental or habitat impacts • Proposal does not give voice to adjoining property owners for site location or mitigation measures • Mitigation measures are neither spelled out nor do the general categories listed in the draft rule fully address community impacts resulting from large-scale operations • Engagement on long-term planning is limited to cities and excludes counties but most Large UMA Facilities anticipated in unincorporated areas Staff will continue to engage in the COGCC process and keep City Council and the community informed through memoranda, updates to the City’s oil and gas webpage - www.fcgov.com/oilandgas <http://www.fcgov.com/oilandgas>, and other tools. ATTACHMENTS 1. Draft Rules Redline (PDF) 2. Memo re: Update-Colorado Oil and Gas Conservation Commission Rulemaking, October 27, 2015 (PDF) 3. Governors Task Force Recommendations 17 (PDF) 4. Governors Task Force Recommendation 20 (PDF) 5. Powerpoint presentation (PDF) COGCC Staff’s Second Draft Proposed Rules Implementing Governor’s Oil and Gas Task Force Recommendation Nos. 17 and 20 October 23, 2015 Page 1 of 12 Effective Date: Following adoption by the Commission, these proposed new and amended rules will become effective twenty days after publication by the Secretary of State pursuant to 24-4-103(5), C.R,S. All provisions of these rules will be applied prospectively to any Application for Oil and Gas Location Assessment, Form 2A, for a Large UMA Facility that is pending but not yet approved as of, or submitted after, the effective date. For pending applications, pre-application notices and consultations otherwise required by the rules will be waived, but applicable best management practices and mitigation measures will be required. Recommendation No. 17 100 Series LARGE UMA FACILITY shall mean any Oil and Gas Location proposed to be located in an Urban Mitigation Area and on which: (1) the cumulative total measured depth of all new wells planned for the Location exceeds [9045,000 feet]; or (2) the cumulative new and existing on-site storage capacity for produced hydrocarbons and produced water exceeds [4,000] barrels. PROXIMATE LOCAL GOVERNMENTS shall mean Local Government whose territorial limits, or real property in which the Local Government has an ownership interest, are located within a one mile radius from a proposed or existing Oil and Gas Facility. 300 Series 305A. LOCAL GOVERNMENT NOTIFICATION AND CONSULTATION FOR LARGE UMA FACILITIES. a. Notice of Intent to Construct a Large UMA Facility. No less than 90 days prior to submitting a Form 2A to the Commission and before an operator has a final contract with the surface owner for a specific location, an operator proposing a Large UMA Facility shall provide written Notice of Intent to Construct a Large UMA Facility to the following: (1) the local government with land use authority over the proposed Oil and Gas Llocation of a Large UMA Facility; (2) Proximate Llocal Ggovernments with land use authority within [1,000 feetone mile of the proposed Large UMA Facility (for purposes of this Rule 305A, “Proximate Local Governments”); and Comment [BRY1]: See proposed “Proximate Local Government” definition addition to 100 Series above ATTACHMENT 1 Page 2 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 (3) the surface owner of the lands on which a Large UMA Facility is proposed (4) adjoining surface land owners to the parcel of land upon which the site for the Large UMA Facility is proposed. b. Content of Notice of Intent to Construct a Large UMA Facility. A Notice of Intent to Construct a Large UMA Facility shall include the following information: (1) a description and depiction of the proposed Oil and Gas Location and the planned facilities; (2) a description of the siting rationale for proposing to locate the facility within the Urban Mitigation Area, including a prioritized description of other sites being considered; (3) an offer to consult with the local government with land use authority over the proposed location to seek agreement regarding siting the Large UMA Facility, considering alternative locations and potential best management practices; (4) an offer to meet with Proximate Local Governments regarding potential best management practices for the proposed Large UMA Facility; and (5) an offer to meet with the surface owner of the lands on which the operator proposes to locate a Large UMA Facility regarding siting of the proposed facility. c. Consultation between the Operator and the Local Government with Land Use Authority. If the local government with land use authority over the proposed Large UMA Facility accepts an operator’s offer to consult in writing within 45 days of receipt of a Notice of Intent to Construct a Large UMA Facility, the operator shall consult in good faith regarding siting of, and best management practices and mitigation measures to be employed at, the proposed location. (1) The Director will participate in the consultation process between the local government and the operator at the request of either. (2) The surface owner’s siting requests and concerns, and those of adjoining property owners, will be considered as part of the consultation. (3) If the local government and operator are unable to reach agreement regarding the location, best management practices, and mitigation measures Page 3 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 for a proposed Large UMA Facility, the operator shall offer in writing to engage in mediation with the local government. A. If the local government agrees to mediation, the operator and the local government shall jointly select a mediator or mediators and share the cost of mediation. B. Upon selection of a mediator(s), the mediation shall conclude within 45 days unless the operator and local government agree to an extension of time. C. The Director is not a party to the mediation, but at the request of either the local government or the operator, the Director shall provide technical assistance to the parties or the mediator to the extent the Director is able. (4) Nothing in this Rule 305A is intended to or shall be interpreted to alter, impair, or negate any existing authority a local government may have to regulate an Oil and Gas Location, so long as such local regulation is not in operational conflict with the Act or regulations promulgated under the Act. This Rule 305A.c. does not prescribe any particular form of consultation or local land use planning or approval process, nor does it limit or supersede any local government land use planning or approval process. d. Meeting with Proximate Local Governments. (1) Within 20 days of receiving the Notice of Intent to Construct a Large UMA Facility, a Proximate Local Government may request a meeting with the operator and the Director to discuss alternative siting, potential best management practices and mitigation measures for the proposed Large UMA Facility reasonably related to potential significant adverse impacts to public health, safety and welfare, including the environment and wildlife resources, that are within the Commission's jurisdiction to remedy. (2) The Director will schedule the meeting with Proximate Local Government upon request. (3) The Director will provide a written response to a Proximate Local Government’s written request for alternative siting, specific best management practices and mitigation measures at a proposed Large UMA Facility. (4) A Proximate Local Government’s approval of a proposed Large UMA Facility’s site is not required, nor may a Proximate Local Government be an Applicant for a hearing on a Form 2A under Rule 507.b.(7). Page 4 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 e. Meeting with the Surface Owner. At the request of the surface owner of the lands on which the operator proposes to locate a Large UMA Facility, the operator and Director will meet with the surface owner regarding siting of the proposed Large UMA Facility. f. Initiating the Form 2A Process. (1) The Director will reject as incomplete a Form 2A submitted for a Large UMA Facility if the operator has not certified one of the following is true: A. the operator reached agreement regarding siting with the local government with land use authority; B. the local government with land use authority waived the Rule 305A procedures or did not timely respond to the Notice of Intent to Construct; or C. the operator complied with the requirements of subsection 305A.C. of this Rule and was unable to reach agreement with the local government with land use authority regarding siting. (2) An operator may initiate the Form 2A process once any of the following occur: A. The operator and the local government with land use authority reach agreement regarding a proposed Large UMA Facility’s site, and the operator provides written confirmation of the agreement to the Director in accordance with Rule 303.b.(3)K. B. The local government with land use authority waives the Rule 305A procedures and the operator provides written confirmation of the waiver to the Director in accordance with Rule 303.b.(3)K. C. The local government with land use authority fails to respond in writing within 45 days of receiving the Notice of Intent to Construct a Large UMA Facility, and the operator submits a copy of the Notice of Intent to Construct a Large UMA Facility and evidence of receipt by the local government to the Director in accordance with Rule 303.b.(3)K. (3) If the local government and the operator engage in consultation but are unable to reach agreement regarding the location for a proposed Large UMA Facility and the local government rejects the offer to mediate or the mediation does not result in an agreement regarding a proposed Large UMA Facility’s site, the operator may initiate the Form 2A process with its preferred site. Page 5 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 A. After the Director’s technical review is complete, the Director will notice the Form 2A for a Commission hearing. Such a hearing shall be expedited but will be held only after both the 20 days’ notice and the newspaper notice are given as required by Section 34-60-108, C.R.S. However, the hearing can be held after the newspaper notice if all of the entities listed under Rule 503.b. waive the 20-day notice requirement. B. The hearing will be conducted pursuant to Rule 528.a. For purposes of the hearing, the operator will be the Applicant and the local government will be the respondent. 600 Series 604.c.(4) Large UMA Facilities. Large UMA Facilities should be built and operated using the best available technology to avoid or minimize adverse impacts to adjoining land uses. To achieve this objective, the Director will require a combination of best management practices and required mitigation measures, and may also impose site-specific conditions of approval related to operational and technical aspects of a proposed Large UMA Facility. No best management practice, mitigation measure, or condition of approval required pursuant to this Rule 604c.(4) is intended to or shall be interpreted to alter, impair, or negate any existing authority a local government may have to regulate an Oil and Gas Location, so long as such local regulation is not in operational conflict with the Act or regulations promulgated under the Act. Mitigation measures shall take into account the location of impacts including, but not limited to, drilling, well completion and stimulation, anticipated production, and planned on-site storage tanks, in proximity to population, community assets, 100- year floodplain, and environmental habitat areas. A. Required Best Management Practices. A Form 2A for a Large UMA Facility will not be approved until best management practices addressing all of the following have been incorporated into the Oil and Gas Location Assessment permit. i. Fire, explosion, chemical, and toxic emission hazards, including lightning strike hazards. ii. Fluid leak detection, repair, reporting, and record keeping for all above and below ground on-site fluid handling, storage, and transportation equipment. iii. Automated well shut-in control measures to prevent gas venting during emission control system failures or other upset conditions. Page 6 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 iv. Zero flaring or venting of gas upon completion of flowback, excepting upset or emergency conditions, or with prior written approval from the Director for necessary maintenance operations. v. Storage tank pressure and fluid management. vi. Proppant dust control. B. Required Mitigation Measures. The following mitigation measures will be imposed as permit conditions on all Large UMA Facility Oil and Gas Location Assessment Permits to effectively mitigate potential impacts to public health, safety, and welfare, including the environment. i. All Rule 604.c.(3).B Exception Zone Setback mitigation measures are required for all Large UMA Facilities, regardless of whether the Large UMA Facility is located in the Buffer Zone or the Exception Zone. ii. The Director, in consultation with the operator, will impose a time limit on the duration of drilling, completion, and stimulation operations for the location, measured from the move-in-rig-up date to the last day of stimulation operations. In establishing the duration limit, the Director will consider site-specific conditions, including but not limited to: the distance to and number of nearby Residential Building Units; operational features such as the number, horsepower, and fuel source of engines and generators anticipated to be in use; whether stimulation operations will occur on-site or remotely; stimulation water sources and delivery; and volume of heavy truck traffic to and from the location during drilling, completion, and stimulation operations. The Director will to grant a one-time extension of the duration limit, not to exceed 30 days, for bona fide, unexpected technical difficulties or force majeure conditions. Before setting the duration limit, tThe Director shall confer with local governments that receive notice of a Large UMA Facility pursuant to Rule 305A, and the surface owner concerning the duration limit. C. Site Specific Mitigation Measures. In addition to the requirements of subsections A. and B. of this Rule 604.c.(4), the Director may impose site-specific conditions of approval to ensure that anticipated impacts are mitigated to the maximum extent achievable. The following non-exclusive list illustrates types of potential impacts the Director may evaluate, for which site-specific conditions of approval may be required: i. Noise. ii. Ground and surface water protection. Page 7 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 iii. Visual impacts associated with placement of wells or production equipment. iv. Remote stimulation operations. v. Air emissions anticipated from drilling, completion and operation and maintenance of site. In considering the need for site-specific mitigation measures, the Director will consider and give substantial deference to mitigation measures or best management practices agreed to by the operator and local government with land use authority. D. The Director retains discretion to require conditions of approval to address site-specific conditions other than those identified in subsection 604.c.(4)C., above, at any Large UMA Facility. E. Nothing in this Rule 604.c.(4) shall be construed to limit the Director’s discretion to impose conditions of approval on a Form 2A for any Oil and Gas Location based on site-specific conditions. Recommendation No. 20 300 Series 302.c. Operator Registration with Local Governments for Advance Planning 1. When used in this subpart, “local jurisdiction” means a home rule or statutory city, town, territorial charter city, or city and county. 2. Beginning on March 1, 2016, all operators that have filed a Form 1 with the Commission shall register with the Local Governmental Designee (“LGD”) of each local jurisdiction in which it has current or planned oil and gas operations. 3. An LGD may request any operator registered within its jurisdiction to provide the following information to the LGD and the Commission’s Local Government Liaison (“LGL”): a. Based on an operator’s current business plan as of the date of the request, a good faith estimate of the number of wells the operator intends to drill in the next five years in the local jurisdiction [,including the jurisdiction’s growth management area]. [A publicly traded company’s well estimates may be Page 8 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 based on reserves classified as “proved undeveloped” for SEC reporting purposes.] b. A map showing the location within the local jurisdiction [,including the jurisdiction’s growth management area,] of an operator’s existing well sites and related production facilities; sites for which the operator has approved, or has submitted applications for, [drilling and spacing orders,] Form 2s or Form 2As; and, sites the operator has identified for development on its current drilling schedule for which it has not yet submitted applications for Commission permits. c. An operator will provide estimates requested pursuant to this subsection 3 using reasonable business judgment based on information known to the operator at the time the estimates are submitted. Estimates provided by the operator may be subject to change at any time at the operator’s sole discretion. d. Operators shall provide updates to this planning annually using the same good faith estimate of anticipated activities and highlighting changes to previous reporting. Conforming Rule Changes 303.b.(3)K. Certification of Local Government Notification in Urban Mitigation Areas. i. If the proposed Oil and Gas Location is within an Urban Mitigation Area, but is not a Large UMA Facility, the operator shall submit evidence that the local government received the pre-application notice required by Rule 305.a.(1). ii. For a Large UMA Facility, the operator shall certify on the Form 2A that it complied with Rule 305A, or that the local government with land use authority waived the notification and consultation procedures in Rule 305A.a.(1) and 305A.c. The operator shall also submit evidence that the Proximate Local Government received the Notice of Intent to Construct a Large UMA Facility no less than 30 days prior to the operator’s Form 2A submittal. Page 9 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 303.c. PROCESSING TIME FOR APPROVALS UNDER THIS SECTION. (1) In accordance with Rule 216.f.(3), where a proposed Oil and Gas Location is covered by an approved Comprehensive Drilling Plan and no variance is sought from such Plan or these rules not addressed in the Comprehensive Drilling Plan, the Director shall give priority to and approve or deny an Application for Permit-to Drill, Form 2, or, where applicable, Oil and Gas Location Assessment, Form 2A, that is not a Large UMA Facility within thirty days of a determination that such application is complete pursuant to Rule 303.h, unless significant new information is brought to the attention of the Director. The Director shall give priority to a Form 2A proposing a Large UMA Facility that is consistent with a Comprehensive Drilling Plan, or a local government comprehensive plan that specifies locations for oil and gas facilities, and shall approve or deny such an application within sixty days. (2) Request for Hearing. A. An operator may request a hearing before the Commission on a permit application if the Director has not issued a decision on: i. An Application for Permit-to-Drill, Form 2, within seventy-five (75) days of a determination that the application is complete; ii. An Oil and Gas Location Assessment, Form 2A, for a Location that is not a Large UMA Facility within seventy-five (75) days of a determination that the application is complete; or iii. An Oil and Gas Location Assessment, Form 2A, for a Large UMA Facility within one hundred fifty (150) days of a determination that the application is complete. B. Such a hearing shall be expedited but will be held only after both the 20 days’ notice and the newspaper notice are given as required by Section 34-60-108, C.R.S. However, the hearing can be held after the newspaper notice if all of the entities listed under Rule 503.b waive the 20-day notice requirement. 305.a.(1) Urban Mitigation Area Notice to Local Government. For Oil and Gas Locations within an Urban Mitigation Area, an Operator shall notify the local government in writing that it intends to apply for an Oil and Gas Location Assessment. Such notice shall be provided to the Local Governmental Designee in those jurisdictions that have designated an LGD, and to the planning department in jurisdictions that have no LGD. Page 10 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 The notice shall include a general description of the proposed Oil and Gas Facilities, the location of the proposed Oil and Gas Facilities, the anticipated date operations (by calendar quarter and year) will commence, and that an additional notice pursuant to Rule 305.c. will be sent by the Operator. This notice shall serve as an invitation to the local government to engage in discussions with the Operator regarding proposed operations and timing, local government jurisdictional requirements, and opportunities to collaborate regarding site development. A local government may waive its right to notice under this provision at any time by providing written notice to an Operator and the Director. If the local government and operator have reached agreement regarding the site for a proposed Large UMA Facility in accordance with Rule 305A, the notice requirement of this subpart does not apply. 305.d. Comment Period. The Director shall not approve a Form 2A, or any associated Form 2, for a proposed Well or Production Facility during the comment period, and shall accept and immediately post on the Commission’s website any comments received from the public, the Local Governmental Designee, the Colorado Department of Public Health and Environment, or Colorado Parks and Wildlife regarding the proposed Oil and Gas Location. (1) The comment period for a Form 2 or a Form 2A for an Oil and Gas Location that is not a Large UMA Facility is twenty (20) days from posting pursuant to Rule 305.b. A. The Director shall extend the comment period to thirty (30) days upon the written request during the twenty (20) day comment period by the Local Governmental Designee, the Colorado Department of Public Health and Environment, Colorado Parks and Wildlife, the Surface Owner, or an owner of surface property who receives notice under Rule 305.c.(1)(A).iii. B. For Oil and Gas Locations proposed within an Urban Mitigation Area or within five hundred (500) feet of a Building Unit, the Director shall extend the comment period to not more than forty (40) days upon the written request of the Local Governmental Designee received within the original 20 day comment period. (2) For a Large UMA Facility, the comment period is forty (40) days from posting pursuant to Rule 305.b. (3) At the Director’s sole discretion, the comment periods identified above may be extended or re-opened for a period not to exceed twenty (20) days. Page 11 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 (4) The Director shall post notice of an extension granted under this provision on the COGCC website within twenty-four (24) hours of receipt of the extension request. 306.d.(1) Consultation to Occur. A. The Commission shall consult with the Colorado Department of Public Health and Environment on an Application for Permit-to-Drill, Form 2, or an Oil and Gas Location Assessment, Form 2A, where: i. Within fourteen (14) days of notification pursuant to Rule 305, the Local Governmental Designee requests the participation of the Colorado Department of Public Health and Environment in the Commission’s consideration of an Application for Permit-to-Drill, Form 2, or Oil and Gas Location Assessment, Form 2A, based on concerns regarding public health, safety, welfare, or impacts to the environment; ii. The operator seeks from the Director a variance from, or consultation is otherwise required or permitted under, a provision of one of the following rules intended for the protection of public health, safety, welfare, or the environment: aa. Rule 317B. Public Water System Protection; bb. Rule 325. Underground Disposal of Water; cc. Rule 603. Statewide Location Requirements for Oil and Gas Facilities, Drilling, and Well Servicing Operations; dd. Rule 604. Setback and Mitigation Measures for Oil and Gas Facilities, Drilling, and Well Servicing Operations; ee. Rule 608. Coalbed Methane Wells; ff. Rule 805. Odors and Dust; gg. 900-Series E&P Waste Management; or hh. Rule 1002.f. Stormwater Management. All requests for variances from these rules must be made at the time an operator submits a Form 2A. Page 12 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 iii. The operator submits an Application for an Oil and Gas Location Assessment, Form 2A, for a Large UMA Facility. 604.b.(1) Existing Oil and Gas Locations. The Director may grant an exception to setback distance requirements set forth in Rule 604 within a Designated Setback Location when a Well or Production Facility is proposed to be added to an existing or approved Oil and Gas Location if the Director determines alternative locations outside the applicable setback are technically or economically impracticable; mitigation measures imposed in the Form 2 or Form 2A will eliminate, minimize or mitigate noise, odors, light, dust, and similar nuisance conditions to the extent reasonably achievable; the operator has complied with the notice and consultation requirements of Rule 305A, if applicable; the proposed location complies with all other safety requirements of these Commission Rules; and: ATTACHMENT 2 Page 5 Task Force Recommendations Task Force Recommendations The following nine recommendations have been approved by the Colorado Oil and Gas Task Force as its final recommendations to the Governor. Each recommendation included in the Task Force Recommendations exceeded the two-thirds voting threshold established by the Governor. RECOMMENDATION TO FACILITATE COLLABORATION OF LOCAL GOVERNMENTS, COLORADO OIL AND GAS CONSERVATION COMMISSION AND OPERATORS RELATIVE TO OIL AND GAS LOCATIONS AND URBAN PLANNING (Recommendation #17) TOTALS: Yes: 21 No: 0 Barwinski Y Holly Y Quinn Y Buescher Y Kelly Y Rau Y Cleveland Y Kourlis Y Robbins Y Dea Y Lachelt Y Sura Y Fitzgerald Y Moreno Y Toor Y George Y Pearce Y Wedgeworth Y Goldin-Dubois Y Peppler Y Woodall Y Agency: Colorado Oil and Gas Conservation Commission (COGCC) Recommendation: Recommend COGCC rulemaking to address Local Government collaboration with Operators concerning locations for “Large Scale Oil and Gas Facilities” in “Urban Mitigation Areas,” as defined in COGCC rules. The COGCC should initiate a rules making that would address three related issues: First, it would define and adopt a process for enhancing local government participation during the COGCC Application for Permit to Drill (“APD”) process concerning location(s) of Large Scale Oil and Gas Facilities in Urban Mitigation Areas, consistent with the proposal. Second, the rulemaking would also define what constitutes “Large Scale Oil and Gas Facilities” taking into consideration scale, proximity, and intensity criteria. Third, address the authority of, and procedures to be used by the Director of the COGCC to regulate the location when permitting Large Scale Oil and Gas Facilities for the purpose of reducing impacts to and conflicts with communities. This shall include siting tools to locate facilities away from residential areas when feasible. Where siting solutions are not possible, the Director would require mitigations to limit the intensity and scale of the operations, as well as other mitigations, to lessen the impacts on neighboring communities. Process: This process is intended to provide interested local governments a defined and timely opportunity to participate in the siting of such large-scale multi-well oil and gas production facilities, ATTACHMENT 3 Page 6 Task Force Recommendations before an Operator finalizes such locations. This would also provide an opportunity to address location of right-of-way for pipelines, facility consolidation, access routes, and to otherwise mitigate impacts within the Urban Mitigation Area. The purpose of this new rule would be to create an incentive for early resolution of concerns about siting in urban areas, and could be done as part of an Operator’s permitting process at the COGCC. Unless an agreement was already in place with an interested affected local government concerning locations within its boundaries, an Operator must obtain local government consultation during the Operator’s COGCC APD approval process concerning such facilities in Urban Mitigation Areas. Other local governments may continue to use the current local government designee (“LGD”) comment, permit condition and hearing process. Nothing in this recommendation is intended to or shall be interpreted to alter any existing land use authority local government may have over oil and gas operations. As set forth, this process would not apply in cases where the Operator and the local government have already negotiated an MOU, site plan review, comprehensive development plan or have otherwise agreed on the location of a multi-well production facility. When an Operator intends to permit an oil and gas location that meets the criteria for the process, the following steps would be involved: 1. If a local government has in place a comprehensive plan or master plan that specifies locations for oil and gas operations, and if an application would be consistent with the terms of that plan, the COGCC shall include a provision in its rules that provides for expedited consideration of the application. 2. Prior to selecting an oil and gas location, the Operator must offer to meet with the LGD and a designated representative of the COGCC to seek location government consultation concerning locations for such large-scale facilities. Such consultation, cased on the local government planning perspectives, would be designed to anticipate community concerns. Should the local government decide to use this process, the first meeting begins a collaboration by which the Operator and the local government, and recognizing the requests and concerns of the surface owner on whom such facilities may be located, can agree on site location and operational practices. These agreements can be documented in: a. Memorandum of Understanding (MOU) b. Best Management Practices (BMP’s) on the COGCC permit c. Comprehensive Drilling Plan (CDP) d. Unconventional Resource Units e. Local Government Land Use Permit f. Or any other mechanism in which agreement is established 3. Operator and local government are required to work towards a compromise concerning locations, and the Operator is required to submit the agreement reflected in paragraph 1 upon submittal of an Oil and Gas Location Assessment (“OGLA”; Form 2A) to the COGCC, or otherwise indicate whether the local government has approved the location for the multi-well production facility. The COGCC staff and local government liaison would be charged, if necessary, with convening meetings of the local government, Operator, and COGCC staff to consider alternative locations Page 7 Task Force Recommendations for multi-well production facilities and to encourage locations that consider distances between building units and/or high occupancy units 4. A local government’s request concerning location must be based on a set of established set of reasonable standards or criteria addressing land use and surface related issues resulting from the proposed oil and gas operation, balanced with consideration of responsible development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources, and include consideration of surface and mineral owner wished. 5. If a compromise cannot be reached concerning proposed locations within reasonable time frame (to be determined during rulemaking) after the first meeting, but before the OGLA is submitted, the Operate shall offer to engage in mediation with the local government. If the local government agrees to mediation, they shall jointly select a mediator or mediators and shall share in the cost of mediation. Upon selection of a mediator(s), the process shall conclude within 45 days unless the two parties jointly agree to an extension. The parties may request the assistance of COGCC staff, and if they do so the COGCC Director shall exert his or her best efforts to provide the requested technical assistance. If mediation does not occur, the Operator may submit its OGLA and APD for processing and approval. 6. If the parties reach agreement, they may memorialize that agreement in any of the forms outlined above. 7. If the parties are unable to reach agreement, on their own or with the mediation, and the timing process of mediation has lapsed, the Operator will finalize its OGLA with its settled location and then will be required to present its OGLA to the full COGCC at an expedited hearing. The COGCC will hear evidence from the local government, the Operator and the COGCC staff before the OGLA can be approved. In no case will the hearing on the OGLA be greater than 90 days from the first meeting with the local government. In order to approve the OGLA, the COGCC must weigh the data and information presented from both parties as the proposed location(s), including the standards discussed in paragraph 4. Rationale: The Task Force heard concerns from numerous parties about the location of large multi-well production facilities in close proximity to urbanized areas. The scale and intensity of multi-well production facilities that are in close proximity to neighborhoods has led to a need for local governments to represent their constituents to a greater degree than in the past. Local governments have expressed the need for more involvement earlier in the process of permitting oil and gas locations, in particular, to the siting of large-scale multi-oil and gas well production facilities in order to represent land use impacts and community concerns (such as those of nearby homeowners, schools, etc.). The above outlined process allows for local governments to get advance notice from Operators and begin discussions with Operators prior to locations being selected. It provides a mechanism for local governments to influence locations prior to permitting at the COGCC and establishes a mechanism for Page 8 Task Force Recommendations collaboration among local governments, oil and gas Operators, and the COGCC. This recommendation is consistent with COGCC Director Matt Lepore’s suggestion, and that of other Task Force members, including Matt Sura, that the Task Force considers scale, proximity, and intensity in addressing location of multi-well production facilities. Page 9 Task Force Recommendations RECOMMENDATION TO INCLUDE FUTURE OIL AND GAS DRILLING AND PRODUCTION FACILITIES IN EXISTING LOCAL COMPREHENSIVE PLANNING PROCESSES (Recommendation #20) TOTALS: Yes: 21 No: 0 Barwinski Y Holly Y Quinn Y Buescher Y Kelly Y Rau Y Cleveland Y Kourlis Y Robbins Y Dea Y Lachelt Y Sura Y Fitzgerald Y Moreno Y Toor Y George Y Pearce Y Wedgeworth Y Goldin-Dubois Y Peppler Y Woodall Y Agency or General Assembly: Colorado Oil & Gas Conservation Commission (COGCC) Description: Proposal to require operator registration with certain Local Government Designees (“LGD”), and upon the request of a municipal LGD, submission of operational information for the purpose of incorporating potential oil and gas development into local comprehensive plans. Key elements of this recommendation include: 1. Beginning on January 1, 2016, all operators registered with the COGCC shall also register with the LGD of each municipality in which it has current or planned oil and gas operations. Upon the request of a municipal LGD, the operator shall provide the following information, with a copy to the COGCC Local Government Liaison (“LGL”): a. Based on the current business plan of the operator, a good faith estimate of the number of wells (not including non-operated wells) that such operator intends to drill in the next five years in the municipal jurisdiction, corresponding to the operator’s internal analysis of reserves classified as “proved undeveloped” for SEC reporting purposes. b. A map showing the location of the operator’s existing well sites and related production facilities; sites for which operator has, or has made application for, COGCC permits; and, sites identified for development on the operator’s current drilling schedule for which it has not yet made application for COGCC permits. The plan provided to the LGD is acknowledged to be subject to change at the operator’s sole discretion, and shall be updated by the operator if materially altered. 2. The Planning Department of participating municipalities will prepare a comprehensive map of the potential future drilling and production sites within its jurisdiction, overlaid on the existing Comprehensive Plan Map. 3. Beginning on July 1, 2016, and upon material alteration, the municipality will provide the Comprehensive Plan Map, overlaid with future drilling and production sites to each of the registered operators and to the LGL. On such map, the municipality will identify sites that it considers compatible with the current and planned future uses of the area; sites where it anticipates minor ATTACHMENT 4 Page 10 Task Force Recommendations issues to be resolved by negotiation with the operator; and, sites where it anticipates significant conflicts with current and planned future uses as indicated in the Comprehensive Plan. 4. Disputes between local governments and operators will be resolved through mediation as more thoroughly described in Recommendation 13b. Rationale: Local governments throughout the state have complicated and lengthy processes to develop Comprehensive Plans. The plan ultimately reflects the community’s goals and aspirations in terms of land development and preservation. The plan guides public policy in terms of transportation, utilities, land use, open space, recreation and housing. Oil and gas development is within the purview of the State of Colorado, and long-term planning to the extent it is performed, is often disjointed and not coordinated with local governments, most acutely in municipalities. Accordingly, when oil and gas development comes to a municipality, it can result in conflict with the existing, documented, community goals and aspirations. This proposal is to recommend the framework which will facilitate incorporation of drilling plans into municipal comprehensive planning. Oil and Gas Rulemaking November 3, 2015 Dan Weinheimer ATTACHMENT 5 Background • Interest groups initiated state ballot measures • Governor Hickenlooper – Cong. Polis compromise • Governor initiates Task Force (September 2014) • Balance land use issues in a way that minimizes conflicts while protecting communities and allowing reasonable access to private mineral rights • Task Force offers nine recommendations • Rulemaking to implement two recommendations: 1. Recommendation 17 2. Recommendation 20 2 Process 3 Governor’s TF recommendations February 2015 COGCC outreach July and August 2015 Draft rules issued October 22 Prehearing statement October 30 Prehearing rebuttal deadline November 6 Rulemaking hearings November 16 and 17 Recommendation 17 Local Government collaboration with Operators concerning locations for “Large Scale Oil and Gas Facilities” in “Urban Mitigation Areas” 4 Support • 90 day notice • Surface Use Agreement role • City input on drilling and operational practices • Mitigate Large UMA Facility Amend • Clarify scientific basis for COGCC proposal • Size of proposed Large UMA Facility • Mitigate lifecycle impacts of site – not just drilling impacts • Allow comment from adjoining owners Recommendation 20 Register with Local Government; report operational information for the purpose of incorporating oil and gas into local comprehensive plans 5 Support • Operators register with City • Share good faith estimate of five-year (5) operations plan • Planned registration includes growth management area (GMA) Amend • Include counties in rule • Protect local land use authority Themes 1. Protect human health and safety, property rights and environmental resources 2. Link site impacts to the required mitigation throughout lifecycle of the site 3. Clarify mitigation measures COGCC plans to use 4. Encourage engagement with operators on plans and location of sites 5. Protect and preserve local land use authority 6 - 1 - RESOLUTION 2015-098 OF THE COUNCIL OF THE CITY OF FORT COLLINS DIRECTING CITY STAFF TO PARTICIPATE IN THE ONGOING COLORADO OIL AND GAS COMMISSION RULEMAKING RELATED TO THE GOVERNOR’S OIL AND GAS TASKFORCE RECOMMENDATIONS 17 AND 20 ENDORSING AND ADOPTING THE PREHEARING STATEMENT PREPARED BY CITY STAFF WHEREAS, on September 8, 2014, Colorado Governor John Hickenlooper issued Executive Order B2014-005, creating a task force on state and local regulation of oil and gas operations (the “Governor’s Oil and Gas Task Force”), which task force consisted of 21 representatives from local government, civic organizations, environmental interests, agriculture, and affected industries; and WHEREAS, in February of 2015, the Governor’s Oil and Gas Task Force forwarded its report to the Governor, including nine Recommendations, two of which, Recommendations 17 and 20, were intended to facilitate greater collaboration and information sharing between oil and gas operators and local governments, to be instituted through the adoption of regulations by the Colorado Oil and Gas Conservation Commission (“COGCC”); and WHEREAS, Recommendation 17 directs the COGCC to create rules to address local government collaboration with oil and gas operators regarding locations for large scale oil and gas facilities in Urban Mitigation Areas; and WHEREAS, Recommendation 20 directs the COGCC to require oil and gas operators registered with the COGCC to also register with the LGD of each municipality where it has current or planned oil and gas operations and to submit information regarding such existing and planned operations; and WHEREAS, the COGCC has initiated its rulemaking process to create rules as directed by Recommendations 17 and 20, and has scheduled hearings to consider proposed rules for adoption to take place before the COGCC on November 16 and 17; and WHEREAS, staff to the COGCC has published draft rules for consideration by the COGCC at the rulemaking hearings; and WHEREAS, in response to community concern regarding the potential environmental, health and safety impacts of oil and gas development and other related activities, the Council’s adopted Legislative Policy Agenda identifies greater local regulation of oil and gas activities within the municipality as a legislative policy objective of the City; and WHEREAS, City staff has reviewed the proposed COGCC rule and has prepared a prehearing statement for submission to the COGCC setting forth the City’s position on the rules and requesting certain changes, attached hereto as Exhibit “A” and incorporated herein by this reference (the “City Prehearing Statement”). - 2 - NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the City Council hereby endorses the City Prehearing Statement, and directs City staff to represent the City’s interests during the COGCC rulemaking process and at proceedings by the COGCC related to the proposed rules. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 3rd day of November, A.D. 2015. _________________________________ Mayor ATTEST: _____________________________ City Clerk 1 BEFORE THE OIL & GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO IN THE MATTER OF CHANGES TO THE RULES ) CAUSE NO. 1R OF PRACTICE AND PROCEDURE OF THE OIL ) & GAS CONSERVATION COMMISSION ) DOCKET NO. 151100667 OF THE STATE OF COLORADO ) ) TYPE: RULEMAKING CITY OF FORT COLLINS PREHEARING STATEMENT The Mayor and City Council of Fort Collins (the “City”) by and through Brad Yatabe, assistant to the Fort Collins City Attorney Carrie Daggett, respectfully submit the following statement and attached redline of the draft rules for consideration in this rulemaking. I. RECOMMENDATION 17 Clarification of Consultation with Local Governments Proposed Rule 305A requires operators to provide written notice at least 90 days before application to the COGCC for a Form 2A and before consummation of a final surface location. The City supports these proposed rules requiring notice and consultation with local government. A Large UMA Facility will have significant impacts on a community. Such impacts last throughout the lifecycle of the associated wells and do not stop at the initial drilling and completion. Furthermore, these impacts are not restricted to the local government with land use authority. Such impacts are felt by adjacent property owners and by adjacent local governments. The City proposes to address these impacts by amending the 100 Series Rules to define “Proximate Local Governments” as those whose territorial limits or land holdings are within a one mile radius of a proposed Large UMA Facility. The distance correlates to the subsurface distance horizontal wells are typically drilled and acknowledges local government interest in discussion with operators about planned activity and associated mitigation measures intended to protect community members. This definition would correspondingly change Rule 305A.a.(2) by increasing the notice distance from 1,000 feet to one mile. The City proposes to amend 305A to add adjoining surface land owners to the list of those groups receiving notice of a Large UMA Facility. These individuals have health, environment, and financial interests in the site location and in the planned construction of a Large UMA Facility. The City proposes to amend the proposed 100 Series definition of a Large UMA Facility to remove the word “new” from the definition of cumulative total depth. While the drilling and completion period is intense and results in traffic, noise, light, and air emission impacts, the word “new” allows a loophole that ignores the cumulative impacts of a Large UMA Facility. Air emissions, pipelines, and the loss of surface use are sustained impacts that must be accounted for and mitigated. EXHIBIT A 2 The City further proposes amending the 100 Series definition of a Large UMA Facility to reduce the cumulative depth from 90,000 feet to 45,000 feet. This equates to a change from eight wells to four. The City additionally proposes amending the definition of on-site storage to include not just hydrocarbons but also the storage of produced water. There is a surface land use impact from the presence of storage equipment and produced water results in air emissions that negatively impact nearby human and environmental health. Clarification of the Definition of Large-Scale Facilities The primary concern of Fort Collins citizens is that oil and gas facilities placed near to or within residential neighborhoods are incompatible due to public health and safety issues. The implementation of Recommendation 17 provides the COGCC an opportunity to demonstrate its understanding of these impacts and its commitment to not only “prevent waste and conserve oil and gas,” but its charge to “protect public health, safety, and welfare, including the environment and wildlife resources” under COGCC Rule 201. The proposed new and amended rules define a “large UMA facility” as 1) the cumulative total measured depth of all new wells planned for the location exceeds 90,000 feet; or 2) the cumulative new and existing on-site storage capacity for produced hydrocarbons exceeds 4,000 barrels. This definition provides the basis for notification and consultation with local governments and implementation of best management practices and required mitigation measures at these sites. The following comments address the City’s concerns about this definition serving as the basis for these rule additions and amendments: 1. The magnitude of the combined impacts of a facility is more important than the size of the facility. This definition is vital to the effectiveness of protective measures. Therefore, the justification and supporting data for selecting it should be included in the regulations. 2. The definition of Urban Mitigation Area (UMA) should be reconsidered since any detrimental public health impact to the number of people residing in twenty-two residential buildings should not be treated differently than the same impact to only one individual. The scope of COGCC rules does not place more importance on the protection of the public health of the many versus the few. a. It is not clear why the public health of individuals residing in urban areas warrant protective measures, but those in rural areas are not afforded the same protections. b. The increased health risks to sensitive populations (e.g., individuals with respiratory illnesses, pregnant women) in proximity to large UMA facilities are not addressed by these proposed rules. 3. This definition of a large UMA facility relating to cumulative total borehole depth only applies to new wells at a location, not existing wells, and thus creates a loophole to bypass the new requirements while developing more large UMA facilities. 3 4. There is no direct correlation between length of borehole and human health impacts. Other measureable criteria more directly related to public health and safety issues include: a. Estimated emissions of hazardous air pollutants (e.g. benzene) during drilling, flowback, production, and from vehicle traffic resulting in human exposure. b. Proximity of boreholes and amount and location of product and waste storage to surface water bodies and permitted groundwater wells affect the risk of exposure that could result from releases. c. Dust resulting from vehicle traffic and drilling can be measured as particulates that have a human health impact thereby representing more than a nuisance issue. d. The number of storage tanks located at a facility is related to the volume of ozone- forming VOCs released, and many of the oil and gas facilities along the Front Range are located within an ozone noncompliance zone representing increased risk to public health. Storage tanks at locations also result in higher vehicle traffic and VOC emissions. 5. There is no prohibition on siting of Class II UIC wells in UMAs. However, there is mounting public concern and data available to substantiate impacts to communities from seismicity and increased vehicle traffic. Mitigation and Siting of Large-Scale Facilities A large-scale facility should be required to mitigate its impacts. The COGCC must have standard mitigation steps that all operators take to limit truck traffic, dust, odors, release of potentially toxic air emissions, and surface land utilized for development. These mitigation measures should be imposed on a site-by-site basis in proportion to or in order to minimize human health and environmental impacts. The COGCC should impose standard best management practices that are updated as technology advances for all oil and gas facilities regardless of size or location. A science based BMP list is a way to address many community conflicts and to improve the quality of oil and gas development in Colorado. This BMP list should be the established “floor” and the COGCC Director would then consult with surface owners, local governments, and community members to stipulate additional mitigation measures that go further to protect human and environmental health. Clarification That Operators Shall Follow the Local Land Use and/or Siting Process to Obtain the Agreement The City requests that the language in 305A.d.(4) be changed as indicated on the attached redline of the draft rules. Recommendation 17 states that operators shall consult with the local government, and the redline changes clarify that if there is a land use or siting process, then this is the process that operators shall use to obtain the agreement prescribed in the rules. Attachment to City of Fort Collins Prehearing Statement COGCC Staff’s Second Draft Proposed Rules Implementing Governor’s Oil and Gas Task Force Recommendation Nos. 17 and 20 October 23, 2015 Page 1 of 12 Effective Date: Following adoption by the Commission, these proposed new and amended rules will become effective twenty days after publication by the Secretary of State pursuant to 24-4-103(5), C.R,S. All provisions of these rules will be applied prospectively to any Application for Oil and Gas Location Assessment, Form 2A, for a Large UMA Facility that is pending but not yet approved as of, or submitted after, the effective date. For pending applications, pre-application notices and consultations otherwise required by the rules will be waived, but applicable best management practices and mitigation measures will be required. Recommendation No. 17 100 Series LARGE UMA FACILITY shall mean any Oil and Gas Location proposed to be located in an Urban Mitigation Area and on which: (1) the cumulative total measured depth of all new wells planned for the Location exceeds [9045,000 feet]; or (2) the cumulative new and existing on-site storage capacity for produced hydrocarbons and produced water exceeds [4,000] barrels. PROXIMATE LOCAL GOVERNMENTS shall mean any Local Governments whose territorial limits, or real property in which the Local Governments have an ownership interest, are located within a one mile radius from a proposed or existing Oil and Gas Facility. 300 Series 305A. LOCAL GOVERNMENT NOTIFICATION AND CONSULTATION FOR LARGE UMA FACILITIES. a. Notice of Intent to Construct a Large UMA Facility. No less than 90 days prior to submitting a Form 2A to the Commission and before an operator has a final contract with the surface owner for a specific location, an operator proposing a Large UMA Facility shall provide written Notice of Intent to Construct a Large UMA Facility to the following: (1) the local government with land use authority over the proposed Oil and Gas Llocation of a Large UMA Facility; Page 2 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 (2) Proximate Llocal Ggovernments with land use authority within [1,000 feetone mile of the proposed Large UMA Facility (for purposes of this Rule 305A, “Proximate Local Governments”); and (3) the surface owner of the lands on which a Large UMA Facility is proposed (4) adjoining surface land owners to the parcel of land upon which the site for the Large UMA Facility is proposed. b. Content of Notice of Intent to Construct a Large UMA Facility. A Notice of Intent to Construct a Large UMA Facility shall include the following information: (1) a description and depiction of the proposed Oil and Gas Location and the planned facilities; (2) a description of the siting rationale for proposing to locate the facility within the Urban Mitigation Area, including a prioritized description of other sites being considered; (3) an offer to consult with the local government with land use authority over the proposed location to seek agreement regarding siting the Large UMA Facility, considering alternative locations and potential best management practices; (4) an offer to meet with Proximate Local Governments regarding potential best management practices for the proposed Large UMA Facility; and (5) an offer to meet with the surface owner of the lands on which the operator proposes to locate a Large UMA Facility regarding siting of the proposed facility. c. Consultation between the Operator and the Local Government with Land Use Authority. If the local government with land use authority over the proposed Large UMA Facility accepts an operator’s offer to consult in writing within 45 days of receipt of a Notice of Intent to Construct a Large UMA Facility, the operator shall consult in good faith regarding siting of, and best management practices and mitigation measures to be employed at, the proposed location. (1) The Director will participate in the consultation process between the local government and the operator at the request of either. (2) The surface owner’s siting requests and concerns, and those of adjoining property owners, will be considered as part of the consultation. Page 3 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 (3) If the local government and operator are unable to reach agreement regarding the location, best management practices, and mitigation measures for a proposed Large UMA Facility, the operator shall offer in writing to engage in mediation with the local government. A. If the local government agrees to mediation, the operator and the local government shall jointly select a mediator or mediators and share the cost of mediation. B. Upon selection of a mediator(s), the mediation shall conclude within 45 days unless the operator and local government agree to an extension of time. C. The Director is not a party to the mediation, but at the request of either the local government or the operator, the Director shall provide technical assistance to the parties or the mediator to the extent the Director is able. (4) Nothing in this Rule 305A is intended to or shall be interpreted to alter, impair, or negate any existing authority a local government may have to regulate an Oil and Gas Location, so long as such local regulation is not in operational conflict with the Act or regulations promulgated under the Act. This Rule 305A.c. does not prescribe any particular form of consultation or local land use planning or approval process, nor does it limit or supersede any local government land use planning or approval process. However, if the local government requires the operator to proceed with and complete a local siting and/or land use process in order to evaluate the proposed site, the operator must follow that process as part of its obligation to consult in good faith. d. Meeting with Proximate Local Governments. (1) Within 20 days of receiving the Notice of Intent to Construct a Large UMA Facility, a Proximate Local Government may request a meeting with the operator and the Director to discuss alternative siting, potential best management practices and mitigation measures for the proposed Large UMA Facility reasonably related to potential significant adverse impacts to public health, safety and welfare, including the environment and wildlife resources, that are within the Commission's jurisdiction to remedy. (2) The Director will schedule the meeting with Proximate Local Government upon request. Page 4 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 (3) The Director will provide a written response to a Proximate Local Government’s written request for alternative siting, specific best management practices and mitigation measures at a proposed Large UMA Facility. (4) A Proximate Local Government’s approval of a proposed Large UMA Facility’s site is not required, nor may a Proximate Local Government be an Applicant for a hearing on a Form 2A under Rule 507.b.(7). e. Meeting with the Surface Owner. At the request of the surface owner of the lands on which the operator proposes to locate a Large UMA Facility, the operator and Director will meet with the surface owner regarding siting of the proposed Large UMA Facility. f. Initiating the Form 2A Process. (1) The Director will reject as incomplete a Form 2A submitted for a Large UMA Facility if the operator has not certified one of the following is true: A. the operator reached agreement regarding siting with the local government with land use authority; B. the local government with land use authority waived the Rule 305A procedures or did not timely respond to the Notice of Intent to Construct; or C. the operator complied with the requirements of subsection 305A.C. of this Rule and was unable to reach agreement with the local government with land use authority regarding siting. (2) An operator may initiate the Form 2A process once any of the following occur: A. The operator and the local government with land use authority reach agreement regarding a proposed Large UMA Facility’s site, and the operator provides written confirmation of the agreement to the Director in accordance with Rule 303.b.(3)K. B. The local government with land use authority waives the Rule 305A procedures and the operator provides written confirmation of the waiver to the Director in accordance with Rule 303.b.(3)K. C. The local government with land use authority fails to respond in writing within 45 days of receiving the Notice of Intent to Construct a Large UMA Facility, and the operator submits a copy of the Notice of Intent to Construct a Large UMA Facility and evidence of receipt by the local government to the Director in accordance with Rule 303.b.(3)K. Page 5 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 (3) If the local government and the operator engage in consultation but are unable to reach agreement regarding the location for a proposed Large UMA Facility and the local government rejects the offer to mediate or the mediation does not result in an agreement regarding a proposed Large UMA Facility’s site, the operator may initiate the Form 2A process with its preferred site. A. After the Director’s technical review is complete, the Director will notice the Form 2A for a Commission hearing. Such a hearing shall be expedited but will be held only after both the 20 days’ notice and the newspaper notice are given as required by Section 34-60-108, C.R.S. However, the hearing can be held after the newspaper notice if all of the entities listed under Rule 503.b. waive the 20-day notice requirement. B. The hearing will be conducted pursuant to Rule 528.a. For purposes of the hearing, the operator will be the Applicant and the local government will be the respondent. 600 Series 604.c.(4) Large UMA Facilities. Large UMA Facilities should be built and operated using the best available technology to avoid or minimize adverse impacts to adjoining land uses. To achieve this objective, the Director will require a combination of best management practices and required mitigation measures, and may also impose site-specific conditions of approval related to operational and technical aspects of a proposed Large UMA Facility. No best management practice, mitigation measure, or condition of approval required pursuant to this Rule 604c.(4) is intended to or shall be interpreted to alter, impair, or negate any existing authority a local government may have to regulate an Oil and Gas Location, so long as such local regulation is not in operational conflict with the Act or regulations promulgated under the Act. Mitigation measures shall take into account the location of impacts including, but not limited to, drilling, well completion and stimulation, anticipated production, and planned on-site storage tanks, in proximity to population, community assets, 100- year floodplain, and environmental habitat areas. A. Required Best Management Practices. A Form 2A for a Large UMA Facility will not be approved until best management practices addressing all of the following have been incorporated into the Oil and Gas Location Assessment permit. i. Fire, explosion, chemical, and toxic emission hazards, including lightning strike hazards. Page 6 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 ii. Fluid leak detection, repair, reporting, and record keeping for all above and below ground on-site fluid handling, storage, and transportation equipment. iii. Automated well shut-in control measures to prevent gas venting during emission control system failures or other upset conditions. iv. Zero flaring or venting of gas upon completion of flowback, excepting upset or emergency conditions, or with prior written approval from the Director for necessary maintenance operations. v. Storage tank pressure and fluid management. vi. Proppant dust control. B. Required Mitigation Measures. The following mitigation measures will be imposed as permit conditions on all Large UMA Facility Oil and Gas Location Assessment Permits to effectively mitigate potential impacts to public health, safety, and welfare, including the environment. i. All Rule 604.c.(3).B Exception Zone Setback mitigation measures are required for all Large UMA Facilities, regardless of whether the Large UMA Facility is located in the Buffer Zone or the Exception Zone. ii. The Director, in consultation with the operator, will impose a time limit on the duration of drilling, completion, and stimulation operations for the location, measured from the move-in-rig-up date to the last day of stimulation operations. In establishing the duration limit, the Director will consider site-specific conditions, including but not limited to: the distance to and number of nearby Residential Building Units; operational features such as the number, horsepower, and fuel source of engines and generators anticipated to be in use; whether stimulation operations will occur on-site or remotely; stimulation water sources and delivery; and volume of heavy truck traffic to and from the location during drilling, completion, and stimulation operations. The Director will to grant a one-time extension of the duration limit, not to exceed 30 days, for bona fide, unexpected technical difficulties or force majeure conditions. Before setting the duration limit, tThe Director shall confer with local governments that receive notice of a Large UMA Facility pursuant to Rule 305A, and the surface owner concerning the duration limit. C. Site Specific Mitigation Measures. In addition to the requirements of subsections A. and B. of this Rule 604.c.(4), the Director may impose site-specific conditions of approval to ensure that anticipated impacts are mitigated to the maximum extent achievable. The following non-exclusive list illustrates types of potential Page 7 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 impacts the Director may evaluate, for which site-specific conditions of approval may be required: i. Noise. ii. Ground and surface water protection. iii. Visual impacts associated with placement of wells or production equipment. iv. Remote stimulation operations. v. Air emissions anticipated from drilling, completion and operation and maintenance of site. In considering the need for site-specific mitigation measures, the Director will consider and give substantial deference to mitigation measures or best management practices agreed to by the operator and local government with land use authority. D. The Director retains discretion to require conditions of approval to address site-specific conditions other than those identified in subsection 604.c.(4)C., above, at any Large UMA Facility. E. Nothing in this Rule 604.c.(4) shall be construed to limit the Director’s discretion to impose conditions of approval on a Form 2A for any Oil and Gas Location based on site-specific conditions. Recommendation No. 20 300 Series 302.c. Operator Registration with Local Governments for Advance Planning 1. When used in this subpart, “local jurisdiction” means a home rule or statutory city, town, territorial charter city, or city and county. 2. Beginning on March 1, 2016, all operators that have filed a Form 1 with the Commission shall register with the Local Governmental Designee (“LGD”) of each local jurisdiction in which it has current or planned oil and gas operations. Page 8 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 3. An LGD may request any operator registered within its jurisdiction to provide the following information to the LGD and the Commission’s Local Government Liaison (“LGL”): a. Based on an operator’s current business plan as of the date of the request, a good faith estimate of the number of wells the operator intends to drill in the next five years in the local jurisdiction [,including the jurisdiction’s growth management area]. [A publicly traded company’s well estimates may be based on reserves classified as “proved undeveloped” for SEC reporting purposes.] b. A map showing the location within the local jurisdiction [,including the jurisdiction’s growth management area,] of an operator’s existing well sites and related production facilities; sites for which the operator has approved, or has submitted applications for, [drilling and spacing orders,] Form 2s or Form 2As; and, sites the operator has identified for development on its current drilling schedule for which it has not yet submitted applications for Commission permits. c. An operator will provide estimates requested pursuant to this subsection 3 using reasonable business judgment based on information known to the operator at the time the estimates are submitted. Estimates provided by the operator may be subject to change at any time at the operator’s sole discretion. d. Operators shall provide updates to this planning annually using the same good faith estimate of anticipated activities and highlighting changes to previous reporting. e. No information submitted pursuant to this Section by any operator shall be considered confidential and the LGD and LGL may publicly disclose such information. Conforming Rule Changes 303.b.(3)K. Certification of Local Government Notification in Urban Mitigation Areas. i. If the proposed Oil and Gas Location is within an Urban Mitigation Area, but is not a Large UMA Facility, the operator shall submit evidence that the local government received the pre-application notice required by Rule 305.a.(1). Page 9 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 ii. For a Large UMA Facility, the operator shall certify on the Form 2A that it complied with Rule 305A, or that the local government with land use authority waived the notification and consultation procedures in Rule 305A.a.(1) and 305A.c. The operator shall also submit evidence that the Proximate Local Government received the Notice of Intent to Construct a Large UMA Facility no less than 30 days prior to the operator’s Form 2A submittal. 303.c. PROCESSING TIME FOR APPROVALS UNDER THIS SECTION. (1) In accordance with Rule 216.f.(3), where a proposed Oil and Gas Location is covered by an approved Comprehensive Drilling Plan and no variance is sought from such Plan or these rules not addressed in the Comprehensive Drilling Plan, the Director shall give priority to and approve or deny an Application for Permit-to Drill, Form 2, or, where applicable, Oil and Gas Location Assessment, Form 2A, that is not a Large UMA Facility within thirty days of a determination that such application is complete pursuant to Rule 303.h, unless significant new information is brought to the attention of the Director. The Director shall give priority to a Form 2A proposing a Large UMA Facility that is consistent with a Comprehensive Drilling Plan, or a local government comprehensive plan that specifies locations for oil and gas facilities, and shall approve or deny such an application within sixty days. (2) Request for Hearing. A. An operator may request a hearing before the Commission on a permit application if the Director has not issued a decision on: i. An Application for Permit-to-Drill, Form 2, within seventy-five (75) days of a determination that the application is complete; ii. An Oil and Gas Location Assessment, Form 2A, for a Location that is not a Large UMA Facility within seventy-five (75) days of a determination that the application is complete; or iii. An Oil and Gas Location Assessment, Form 2A, for a Large UMA Facility within one hundred fifty (150) days of a determination that the application is complete. B. Such a hearing shall be expedited but will be held only after both the 20 days’ notice and the newspaper notice are given as required by Section 34-60-108, Page 10 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 C.R.S. However, the hearing can be held after the newspaper notice if all of the entities listed under Rule 503.b waive the 20-day notice requirement. 305.a.(1) Urban Mitigation Area Notice to Local Government. For Oil and Gas Locations within an Urban Mitigation Area, an Operator shall notify the local government in writing that it intends to apply for an Oil and Gas Location Assessment. Such notice shall be provided to the Local Governmental Designee in those jurisdictions that have designated an LGD, and to the planning department in jurisdictions that have no LGD. The notice shall include a general description of the proposed Oil and Gas Facilities, the location of the proposed Oil and Gas Facilities, the anticipated date operations (by calendar quarter and year) will commence, and that an additional notice pursuant to Rule 305.c. will be sent by the Operator. This notice shall serve as an invitation to the local government to engage in discussions with the Operator regarding proposed operations and timing, local government jurisdictional requirements, and opportunities to collaborate regarding site development. A local government may waive its right to notice under this provision at any time by providing written notice to an Operator and the Director. If the local government and operator have reached agreement regarding the site for a proposed Large UMA Facility in accordance with Rule 305A, the notice requirement of this subpart does not apply. 305.d. Comment Period. The Director shall not approve a Form 2A, or any associated Form 2, for a proposed Well or Production Facility during the comment period, and shall accept and immediately post on the Commission’s website any comments received from the public, the Local Governmental Designee, the Colorado Department of Public Health and Environment, or Colorado Parks and Wildlife regarding the proposed Oil and Gas Location. (1) The comment period for a Form 2 or a Form 2A for an Oil and Gas Location that is not a Large UMA Facility is twenty (20) days from posting pursuant to Rule 305.b. A. The Director shall extend the comment period to thirty (30) days upon the written request during the twenty (20) day comment period by the Local Governmental Designee, the Colorado Department of Public Health and Environment, Colorado Parks and Wildlife, the Surface Owner, or an owner of surface property who receives notice under Rule 305.c.(1)(A).iii. Page 11 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 B. For Oil and Gas Locations proposed within an Urban Mitigation Area or within five hundred (500) feet of a Building Unit, the Director shall extend the comment period to not more than forty (40) days upon the written request of the Local Governmental Designee received within the original 20 day comment period. (2) For a Large UMA Facility, the comment period is forty (40) days from posting pursuant to Rule 305.b. (3) At the Director’s sole discretion, the comment periods identified above may be extended or re-opened for a period not to exceed twenty (20) days. (4) The Director shall post notice of an extension granted under this provision on the COGCC website within twenty-four (24) hours of receipt of the extension request. 306.d.(1) Consultation to Occur. A. The Commission shall consult with the Colorado Department of Public Health and Environment on an Application for Permit-to-Drill, Form 2, or an Oil and Gas Location Assessment, Form 2A, where: i. Within fourteen (14) days of notification pursuant to Rule 305, the Local Governmental Designee requests the participation of the Colorado Department of Public Health and Environment in the Commission’s consideration of an Application for Permit-to-Drill, Form 2, or Oil and Gas Location Assessment, Form 2A, based on concerns regarding public health, safety, welfare, or impacts to the environment; ii. The operator seeks from the Director a variance from, or consultation is otherwise required or permitted under, a provision of one of the following rules intended for the protection of public health, safety, welfare, or the environment: aa. Rule 317B. Public Water System Protection; bb. Rule 325. Underground Disposal of Water; cc. Rule 603. Statewide Location Requirements for Oil and Gas Facilities, Drilling, and Well Servicing Operations; dd. Rule 604. Setback and Mitigation Measures for Oil and Gas Facilities, Drilling, and Well Servicing Operations; Page 12 of 12 COGCC Staff’s Second Draft Proposed Rules Implementing Task Force Recommendation Nos.17 and 20 October 23, 2015 ee. Rule 608. Coalbed Methane Wells; ff. Rule 805. Odors and Dust; gg. 900-Series E&P Waste Management; or hh. Rule 1002.f. Stormwater Management. All requests for variances from these rules must be made at the time an operator submits a Form 2A. iii. The operator submits an Application for an Oil and Gas Location Assessment, Form 2A, for a Large UMA Facility. 604.b.(1) Existing Oil and Gas Locations. The Director may grant an exception to setback distance requirements set forth in Rule 604 within a Designated Setback Location when a Well or Production Facility is proposed to be added to an existing or approved Oil and Gas Location if the Director determines alternative locations outside the applicable setback are technically or economically impracticable; mitigation measures imposed in the Form 2 or Form 2A will eliminate, minimize or mitigate noise, odors, light, dust, and similar nuisance conditions to the extent reasonably achievable; the operator has complied with the notice and consultation requirements of Rule 305A, if applicable; the proposed location complies with all other safety requirements of these Commission Rules; and: