Compromise reached in Colorado oil, gas fracking initiative fight

Houston (Platts)--4Aug2014/502 pm EDT/2102 GMT

Colorado Governor John Hickenlooper on Monday announced a compromiseagreement with proponents of two ballot initiatives that would have placed restrictions on oil and gas development in the state.

At a news conference at the Colorado State Capitol in Denver, Hickenlooper announced the creation of a task force "charged with crafting recommendations to help minimize land use conflicts that can occur when sitingoil and gas facilities near homes, schools, businesses and recreationalareas."

Democratic US Representative Jared Polis of Colorado's 2nd CongressionalDistrict, who had been providing financial backing for the two anti-frackinginitiatives, joined Hickenlooper to say he was withdrawing his support of theballot measures.

The 18-member task force -- chaired by La Plata County Commissioner GwenLachelt and Randy Cleveland, president of XTO Energy -- will comprise a broadgroup of stakeholders representing the oil and gas, agricultural, and homebuilding industries, the conservation community, and local government andcivic leaders, a statement from Hickenlooper's office said.

The task force will have the power to make recommendations to thelegislature with a two-thirds majority, or issue majority and minorityopinions.

"Colorado is fortunate to have an abundance of energy resources, and wehave an obligation to develop them in a way that is safe for our residents,supports jobs and the economy, respects private property rights and protectsour environment," Hickenlooper said.

Proponents of the compromise hope it will take the wind out of the sailsof efforts to pass Initiative 88 in November, which would quadruple thesetback distances for oil and gas operations statewide to 2,000 feet, andInitiative 89, which would give local municipalities broad powers to regulateoil and gas operations.

"The work of this task force will provide an alternative to ballotinitiatives that, if successful, would have regulated the oil and gas industrythrough the rigidity of constitutional amendments and posed a significantthreat to Colorado's economy," the governor said.

"Today's announcement is a victory for the people of Colorado and themovement to enact sensible fracking regulations," Polis said. "For the firsttime, citizens will be on equal footing to the oil and gas industry, and ableto negotiate directly for regulations that protect property rights, homesvalues, clean water and air quality."

In a post on his Facebook page, Polis acknowledged that his compromisewith the governor might not sit well with some of his allies amongenvironmental and local citizen activist groups.

"I know for many today's announcement will not go far enough, but Ibelieve it's just the beginning of next chapter," Polis said. "For the firsttime in this fight, citizens will have a seat at the negotiating table."

Earthworks Oil & Gas Accountability Project Director Bruce Baizelexpressed disappointment that Initiative 89, the environmental rights measure,would be withdrawn, but gave a tepid endorsement to the compromise appointmentof the task force.

"Colorado's oil and gas oversight favors the oil and gas industry'sinterests before the public interest," he said in a statement. "That's whyhundreds of thousands of Coloradoans backed ballot initiatives tofundamentally change oil and gas regulation for the better this November.

"The fracking commission announced today by Governor Hickenlooper andRepresentative Polis provides a possibility that Colorado's community andenvironment may yet be protected from the environmental and health threatsassociated with oil and gas development."

--Jim Magill, jim.magill@platts.com
--Edited by Caitlin Laird, caitlin.laird@platts.com

http://www.platts.com/latest-news/natural-gas/houston/compromise-reached-in-colorado-oil-gas-fracking-21017784