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HomeMy WebLinkAboutMemo - Read Before Packet - 4/4/2023 - Letter From Lynn Granger Of The American Petroleum Institute (Api) Re: Draft Oil And Gas Regulations Second Reading Comments [April 4, 2023 City Council Agenda Item #24]Lynn Granger Region Director API Midwest/Mountain West Region 202-682-7177 grangerl@api.org April 4, 2023 City Council City of Fort Collins 300 Laporte Avenue Fort Collins, CO 80521 Delivered via email: Kirk Longstein, Senior Environmental Planner, klongstein@fcgov.com Cassie Archuleta, Air Quality Program Manager, carchuleta@fcgov.com RE: Draft Oil and Gas Regulations Dear Council Members, The American Petroleum Institute Colorado (API Colorado) respectfully submits the following additional comments on the proposed oil and gas regulations put forth by the City of Fort Collins (the city). We continue to appreciate the efforts by the city to consider stakeholder feedback over the past several months. The American Petroleum Institute (API) represents all segments of America’s oil and natural gas industry. API was formed in 1919 as a standards-setting organization and has developed more than 800 standards to enhance operational and environmental safety, efficiency and sustainability. Its nearly 600 members produce, process, and distribute most of the nation’s energy. Member companies are producers, refiners, suppliers, marketers, and pipeline operators as well as service and supply companies that support all segments of the industry. Following first reading of the proposed regulations in December, API Colorado noted that several concerns remain with the most recent updated draft. It appears the city continues to seek to limit operations to industrial zones within the city. As city staff has openly stated, this is highly restrictive and would eliminate any usable space for new, or expanded, operations. While Senate Bill 19-181 provided local government with additional authority over oil and gas operations, we remind the city that it is limited to surface impacts only and must be both necessary and reasonable. The authors of Senate Bill 19-181 explicitly, and consistently, emphasized that their legislation did not and does not authorize a blanket prohibition on oil and gas operations. By adopting an ordinance that eliminates usable space for oil and gas operations and pipelines, the city would in effect be instituting a prohibition. Many of the recommendations set forth by the city remain duplicative of regulations at the state level. API Colorado continues to encourage alignment with the Colorado Oil and Gas Commission's (COGCC) rules, including consistent definitions, standards, and practices. COGCC’s process provides multiple opportunities for local governments to collaborate with the COGCC, and we encourage the city to participate in those opportunities. Sent via CityLeaders@fcgov.com RE: Agenda Item #24 Lynn Granger Region Director API Midwest/Mountain West Region 202-682-7177 grangerl@api.org 3.12.1 Purpose and Applicability (B) Applicability In its current form, regulations would apply to siting and reclamation of oil and gas facilities, oil and gas operations, and oil and gas pipelines within city boundaries. As noted above, under Senate Bill 19- 181, local governments may only regulate surface impacts. Any subsurface impacts, including pipelines and the process of plugging wells, are beyond a local government’s authority—a matter the city lacks jurisdiction over. 3.12.3 Oil and Gas Project Development Plan Review Procedures (A)(1) Alternative location analysis As noted in our December 2022 comments, the COGCC’s permitting rules already require alternative location analyses in many instances. Through this process, operators often evaluate and submit multiple alternative locations and propose the least impactful location. The COGCC’s requirements for an alternative location analysis are thorough and exceed the city's proposed requirements. For these reasons, we recommend that the city defer to the COGCC for alternative location analysis, which allows for local government consultation with COGCC staff. (A)(1)(b) Oil and gas pipeline alignment API Colorado proposes the following language change for greater clarity: For oil and gas pipelines, the alternative location analysis shall evaluate a minimum of three potential alignments alternatives for the pipeline, including the following information for each alignment alternative: 1. General narrative description of each alignments alternative; 2. Any location restrictions that the alignments alternative does not satisfy; 3. Any existing surface use agreements or other documentation regarding legal property rights; 4. Off-site impacts that may be associated with each alignments alternative; and 5. Any information pertinent to the applicable review criteria that will assist the Director in evaluating the locations. (A)(2)(c)(6) Existing and approved oil and gas facilities and pipelines City regulations will require operators to be aware of all existing and approved oil and gas facilities and pipelines. For operators to satisfy this requirement, the city must maintain a list of approved, but not yet existing, pipelines. It is unknown if the city manages such a list or if this information is readily available to operators. (B) Step 2 (Neighborhood Meeting) The updated draft requires neighborhood meetings for a proposed oil and gas pipeline. We seek clarification on whether the requirement is applicable for ¾ inch diameter natural gas distribution lines which are commonly used for household connections and commercial developments. Additionally, our concerns remain the same from API Colorado’s previous letter related to the requirement that operators send written notice for a neighborhood meeting to all addresses within one mile of the property line of the parcel of land. Since the term parcel is not defined, it could include far more than the proposed location and cause the distance between a proposed location and other buildings to Lynn Granger Region Director API Midwest/Mountain West Region 202-682-7177 grangerl@api.org exceed one mile. Once again, we recommend that the ordinance use the term proposed location rather than a parcel of land. 3.12.4 Oil and Gas Facility Development Standards (A)(2) Setbacks As noted in the last comment letter, the draft regulations would require measurements to be made from existing or platted buildings approved, or to be approved. Similar to the requirements for pipelines, this would require the city to maintain a list of platted buildings awaiting approval that is accessible to operators. The draft regulations also do not appear to consider variances, which would allow private property owners the ability to have a facility within the 2,000 ft setback. As written, the effect of these regulations will preclude mineral owners from the ability to derive benefits from their property. 3.12.5 Oil and Gas Pipelines While the city’s proposed regulations would limit pipelines to specific zoned areas, the lack of those adjoining zones would also effectively outright prohibit new pipelines. This could also preclude natural gas distribution lines in new housing and commercial developments, and, in particular, within the city’s Growth Management Area. These regulations should not jeopardize residents’ and businesses’ ability to utilize a domestically- produced, cleaner-burning, affordable, and reliable energy source. In addition, it is unclear whether this provision would limit expansion of distribution lines to serve new load, safety improvements, and maintenance activities. (H) Boring technology The regulations would require operators to use boring technology when crossing streams, rivers, irrigation ditches or wetlands with a pipeline. However, we note that varying geology could impact the effectiveness of boring technology. API Colorado suggests the below changes to allow for flexibility based on geological conditions. When feasible and practicable, Operators shall should use boring technology when crossing streams, rivers, irrigation ditches or wetlands with a pipeline to minimize negative impacts to the channel, bank, and riparian areas, except that open cuts may be used across irrigation ditches if the affected ditch company approves the technique. (G) and (I)(1) Pipeline information As previously noted, the city’s provision requesting records submitted to PHMSA or the PUC creates a security issue as certain pipeline information is considered confidential and sensitive information. The U.S. Department of Homeland Security Department treats pipelines as such and limits access to specific levels of mapping detail. Requesting this information also falls outside the jurisdiction of local governments as it is not applicable to siting and surface impacts. Additionally, an existing right-of-way can entail significant safety risks since pipeline locations cannot be precisely known even when mapped and co-locating rights-of-way merits the risk of excavation accidents. 3.12.6 Plugging and Abandonment of Wells and Pipelines and Decommissioning of Oil and Gas Facilities We note the plugging and abandonment process often requires flexibility as rig locations, schedules, and vendor availability can change. Additionally, requiring a neighborhood meeting can delay the plugging and Lynn Granger Region Director API Midwest/Mountain West Region 202-682-7177 grangerl@api.org abandonment process and could extend the process from a few days to months. However, it is key to note that Senate Bill 19-181 gives authority to the COGCC to plug and abandon oil and gas facilities. As such, the city lacks jurisdiction over the plugging and abandonment process. (A)(3) Site investigation a sampling and monitoring plan The city’s proposed sampling and monitoring plan overlaps and is duplicative of the COGCC’s site closure and reclamation requirements. Many of the sampling requirements such as soil, gas, and water monitoring are not only already conducted by the state but are also highly technical in nature. We continue to recommend deferring to the state plugging and abandonment program already in place. (D) Reclamation As noted in API Colorado’s last letter, six months is not a feasible timeline for full reclamation. Seasonal weather challenges can create barriers to fully completing reclamation within this timeline. Additionally, growing seasons may not align with the reclamation period. As such, we suggest the city align its reclamation with the COGCC’s and allow 12 months for the process. 7.2.2 Definitions API Colorado recommends the following changes to definitions to address accuracy and encompass evolving methods of plugging a well. Gathering line shall mean a gathering pipeline or system as defined by the Colorado Public Utilities Commission, Regulation No. 4, 4 C.C.R. 723-4901, Part 4, (4 C.C.R. 723-4901) or a pipeline regulated by the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration pursuant to 49 C.F.R. §§ 195.2 or 192.8. 49 C.F.R. §§ 195.2 or 192.8 and 4 C.C.R. 723-4901 in existence as of the date of this regulation and does not include later amendments. Plugging and abandonment shall mean the cementing plugging of a well, the removal of its associated production facilities, the abandonment of its flowline(s), and the remediation and reclamation of the wellsite. API Colorado once again appreciates the opportunity to submit these comments and looks forward to addressing the issues in a collaborative and thoughtful manner. We understand the city’s desire to protect public health and the environment and share in those goals. Thank you. Sincerely, Lynn Granger Region Director American Petroleum Institute Midwest/Mountain West Region grangerl@api.org