Colorado to Tighten Drilling Rules

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from The Wall Street Journal,

A worker checks water levels and temperatures earlier this year at an Encana fracking site outside Rifle, Colo. Associated Press

Colorado unveiled new measures to reduce airborne emissions from oil and natural-gas operations amid worries by state residents that increased drilling would hurt the environment or their health.

Gov. John Hickenlooper, a Democrat, unveiled the new rules on Monday, less than two weeks after four communities voted to halt hydraulic fracturing, or fracking. “Natural gas is a crucial part of this country’s future, but we need to address the anxieties and concerns of the public,” Mr. Hickenlooper said in an interview. “People want clean air and clean water where they live, and that is a legitimate expectation.”

The state’s proposed rules include first-in-the-nation regulations to force energy companies to reduce the emission of methane, a potent greenhouse gas linked to global warming that is the major ingredient in natural gas. The rules also attempt to cut emissions of volatile organic compounds, which some scientists say raise ozone levels and contain cancer-causing pollutants.

Most of the proposed rules can be enacted directly by the state’s Air Quality Control Commission, which is expected to clear them in 2014. The rules are backed by three of the largest drilling companies in the state.

“While it is my understanding the oil and gas industry is still reviewing the proposed rules, this appears to be an example of government working in partnership, rather than in an adversarial role, with industry,” said Colorado House Minority Leader Brian DelGrosso, a Republican.

States are increasingly tightening regulations on oilfield activities, in an effort to convince local residents that the activity is safe to live near. While New York and Vermont suspended fracking efforts several years ago, this year both Illinois and California approved new rules to govern the practice, in which drillers use water, chemicals and sand to break up underground rocks and allow fuel to flow to the surface.

“A lot of states are trying to strike a balance between the economic potential of oil and gas development and making sure the industry is well regulated,” said Kristy Hartman, an energy-policy specialist at the National Conference of State Legislatures.

Colorado is home to the Niobrara Shale, dense rock that spreads to the northwest from Denver and that produced 287,200 barrels a day of oil in October, a 37% increase from a year earlier. Drilling rigs have become a common sight in many of Denver’s fast-growing suburbs.

Dan Grossman, regional director of the Environmental Defense Fund, which helped write the regulations, said the energy industry was at risk of losing its “social license” to operate. “Both operators and regulators feel the public lacks confidence that fracking can be done safely,” he said.

Anadarko Petroleum Corp. APC -0.01% Anadarko Petroleum Corp. U.S.: NYSE $90.71 +0.33+0.37% Nov 19, 2013 4:42 pm Volume (Delayed 15m) : 1.61M P/E Ratio 25.85 Market Cap $45.49 Billion Dividend Yield 0.79% Rev. per Employee $2,757,690 9291908910a11a12p1p2p3p 11/06/13 Energy Firms Ready for Battle … 10/15/13 Venezuela to Release Detained … 10/14/13 Venezuela to Charge Ship Capta… More quote details and news » is one of the three big drillers that supports the proposed rules. “Throughout the development of oil and gas resources, industry is taking the steps necessary to protect human health and environment,” said Korby Bracken, the company’s director of environment, health and safety in the Rockies. The other two companies are Encana Corp. ECA.T +2.20% and Noble Energy Inc.

Andrea Roy, a member of Colorado Moms Know Best, said her group thinks more needs to be done. “We can’t depend on the government to do the right thing, we need to pressure them,” she said.

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