The first oil-and-gas operator agreement since passage of state legislation shifting regulation to local governments was approved late Monday night, raising questions about what Aurora’s future in oil and gas development will look like.
Aurora city lawmakers gave the agreement with ConocoPhillips the green light, but not before three hours of public comment, most of which was in support of the agreement, and heated debate among the council members. The council voted 6-4 to allow ConocoPhillips to operate 45 well sites, possibly up to more than 300 wells, in Aurora.
Adams County and Broomfield — which operates on a similar agreement system like Aurora now has in place — have both enacted moratoriums on oil and gas development. They’ve pointed to concerns about the major change SB19-181 presented to the process as a reason why. But many Aurora lawmakers say they believe the operator agreements are stronger than the state law because they can be made specific to each project.
The legislation, signed into law by Gov. Jared Polis this year, now allows local governments to make the first call on whether to approve oil and gas development instead of the state. It also changes the focus of the state regulation agency, the Colorado Oil and Gas Conservation Commission, to health, safety and environment.
Industry proponents heavily criticized the bill for it’s uncertain economic impacts. GOP lawmakers said they weren’t a part of the stakeholders process as they wanted to be and felt like the entire passage was rushed.
Mayor Bob LeGare said 60 people were signed up to speak on the agenda item. Many of them supporters of oil-and-gas development and work in the industry, others had environmental, health and safety concerns about the proposed development. During the meeting, LeGare asked those who were there in support of the agreement to stand. He estimated that about 160 people stood in favor and about 35 stood in opposition.
ConocoPhillips sought approval of 45 well sites, eight of which are within a quarter-mile of a home in Aurora. Representatives from the company told council members they currently operate approximately 50 wells in the city.
The oil and gas developer is also seeking 10 permits through the administrative approval process with the city. With the approval of the 45 well pad sites was a waiver of reconsideration, essentially speeding up the approval by limiting the chance council would have to reconsider the piece of legislation. ConocoPhillips said at a previous meeting that not including the waiver would hinder their production schedule.
A waiver of reconsideration does not allow a council member to call up the item for the lawmaking body to reevaluate. Council member Nicole Johnston said in a meeting earlier in the evening she is opposed to tacking on waivers of reconsideration on oil and gas operator agreements, adding that she believes council should be able to reconsider the agreements if new information is presented to the members.
The agreement, a binding legal contract, lays out several best management practice provisions, which exceed existing state standards. ConocoPhillips agreed to higher reporting standards than currently required by the Colorado Oil and Gas Conservation Commission, purchasing additional insurance not required by the COGCC and responding to odor complaints within 24 hours, also not regulated by the state. Legal counsel to the city on oil and gas issues said the city’s air quality assurance provisions are some of the strictest in the nation. They also exceed all related state standards.
If stricter state rules regarding oil and gas development are adopted, ConocoPhillips must abide by those rules. But if any rules are weakened at a state or federal level, the company will still have to comply with the terms of the agreement.
Councilwoman Françoise Bergan said she believed Aurora could be a model for operator agreements in other municipalities. Johnston later said she hoped that wouldn’t be the case.
“It’s embarrassing to me how the city council hasn’t insisted in a more robust feedback,” she said. The approved application dictates that there will now be neighborhood meetings about the wells.
All applications approved by the city will still need approval from the state’s oil-and-gas conservation committee, which has a backlog of about 6,000 requests. That’s in part because of an oil rush spurred by Proposition 112, the oil and gas setback ballot initiative that would have limited drilling but was rejected by voters in November 2018.
Some council members cited concerns about how much of an increase there would be in the number of wells and how rushed they felt the process was. But some proponents of the industry pushed what industry involvement means for the city’s coffers.
Last year, the City of Aurora brought in a total of $284,387 from oil and gas sector taxes, including local taxes and state and federal taxes allocated to the city, according to a city spokesperson. From 2014 through 2018, the City received over $1.7 million – $1 million of which was appropriated for affordable housing in the 2019 budget.
Among those who spoke in favor of the agreements were ConocoPhillips employees and contractors of the company. Councilmwoman Allison Hiltz asked LeGare if he could also have those in the audience employed in the industry stand, but LeGare rejected that request.
Aurora Chamber of Commerce CEO Kevin Hougen also spoke in favor of the agreement, which was first presented to the council and public two weeks ago.
“ConocoPhillips has proven time and time again to be a great member of our growing community,” he said, adding that the company’s approach to business stimulates economic development and provides more economic opportunities through buying supplies locally.
But even with praise from industry workers and the local chamber of commerce, which is a member of the energy advocacy coalition Vital for Colorado, the council members weren’t unanimous in whether the body should pass the agreement.
Council members Angela Lawson, Nicole Johnston, Allison Hiltz and Crystal Murillo voted the measure down. Council member Dave Gruber asked the city attorney if either any members who had received money from the oil-and-gas friendly groups, including himself, or the three council members who are Emerge Colorado graduates should vote on the measure. Gruber alleged that because Johnston, Hiltz and Murillo received training from Emerge prior to being elected they abide by an anti-oil and gas pillar.
Hiltz called the comment “uneducated and uninformed” before the city attorney assured the body they could all vote on the agreement.