Fracking in Colorado
Energy policy • Fracking policy • Public education • School choice • Public pensions • State budget • Ballot measures • Ballot access
|Fracking in Colorado|
|Regulatory agency||Colorado Oil and Gas Conservation Commission|
|Fossil fuels present||Oil, natural gas and coalbed methane|
|Year fracking began||1969|
|Total wells fracked||18,168|
|Percentage of wells frackeed||95%|
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- 1 Fracking background
- 2 History
- 3 Production
- 4 Fracking at the ballot box
- 5 Economic impact
- 6 Environmental impact
- 7 Socioeconomic impact
- 8 Departments, agencies and organizations
- 9 Laws and regulations
- 10 Major organizations
- 11 Natural gas use in Colorado
- 12 News items
- 13 See also
- 14 External links
- 15 References
Colorado has large fossil fuel reserves that are now accessible because of improvements in oil and natural gas extraction technologies. These technologies are under heavy scrutiny, however. Opponents of the practice were pushing a state-wide fracking ban initiative. Supporters of this ban were unable to gather enough signatures to get their measure on the ballot, and instead are looking to put the measure on the November 2016 ballot.
Colorado is now supplying 1 of every 50 barrels of oil produced in the United States. On average the state has 1,300,000 barrels of oil per acre, meaning the state potentially has the richest oil shale deposits in the world.
- See also: Fracking
Hydraulic fracturing, or "fracking," is the process of injecting fluid--mostly water and sand, but with additional chemicals--into the ground at a high pressure to fracture shale rocks and release the oil and natural gas inside.
Recent technological advances in oil and gas drilling--horizontal drilling and hydraulic fracturing--have created a wealth of opportunities and challenges for states with fossil fuel reserves that can be accessed through the combination of these two technologies. The increased use of fracking has been an economic boon for many states, not only those with fracking, but also those with supporting industries, such as frac sand mining or associated machinery manufacturing.
Opponents of fracking argue that the potential negative environmental and human health impacts could be significant. Although wells have been fracked for over 65 years in the United States, concerns have been raised about whether federal, state and local regulatory agencies can keep up with the recent rapid increase in fracking activity, and adequately protect the environment and human health. As with any type of energy extraction, either traditional or renewable, there are economic, environmental and political tradeoffs.
Naturally seeping oil was found by settlers in Colorado as far back as 1876. In 1901 the first recorded oil well was drilled in the Pierre Shale formation. Then, in 1969, an early form of hydraulic fracturing was used near Rifle, Colorado. Massive fracking occurred in the Watternberg Gas Field beginning in 1973, and was one of the first large-scale fracking operations.
The map to the right shows active oil and gas permits in Colorado as of June 1, 2014. A green dot indicates that the Colorado Oil and Gas Conservation Commission, the state agency that oversees the oil and gas industry, has issued a permit, but does not necessarily indicate that an oil or gas well is there.
Colorado has seen a steady increase in the production of both oil and natural gas since 1999 and 1990 respectively. The two graphs below show the increase in oil and natural gas production, statewide and from particular formations, from 1952 to 2012. Oil production peaked in 1956, after which production decreased overall, although some volatility remained. Oil production has grown steadily since 1999 and is nearly at levels not seen since the 1950s and 1960s. Oil production has grown significantly in the Wattenberg field; prior to the 2000s much of the production had come from the Rangely field. Natural gas production has increased significantly. In 1990 the state was producing around 250 million MCF (or MMCF) of gas and by 2012 this had leveled off to over 1,600 million MCF of natural gas. Natural gas production from the Piceance Basin has particularly increased.
Areas of activity
As is visible in the map to the right Colorado has several shale plays and formations. The Niobrara shale formation in northeastern Colorado is estimated to contain 2 billion barrels of retrievable oil. The Green River oil shale play in northwestern Colorado also has substantial oil reserves and is estimated by some to be the world's largest. Many of the oil and gas resources in Colorado are located on lands operated by the U.S. Bureau of Land Management. The growth of oil and gas activity in Colorado isn't affecting all areas equally: five counties contain 87 percent of the oil and gas activity, while the remaining 13 percent of activity is split among the other 31 counties.
- The Niobrara shale formation is primarily and oil play that covers parts of Colorado, Kansas, Nebraska and Wyoming. Oil and natural gas resources are located between 3,000 and 14,000 feet below the earth's surface. The Niobrara Formation is still considered to be in the early stages of development, but is estimated to hold up to 2 billion barrels of oil reserves.
- The Green River Formation is located across 784,000 acres and holds approximately 600-800 billion barrels of oil. This formation stretches across Wyoming, Utah and Colorado, reaching into the northern Colorado community of Rifle. The Green River Formation is estimated to hold 640 billion barrels of oil in Colorado alone.
- The Sand Wash Basin is located in northwest Colorado and southwest Wyoming. The basin is expected to have up to 101 trillion cubic feet of coalbed methane resources. This basin covers 5,600 square miles, mostly in Routt and Moffat counties.
- The Wattenberg Gas Field is part of the Denver Basin and was discovered in 1970. By 1973 some of the first large-scale fracking was occurring in this field. During this time the field was thought to hold 1.1 trillion cubic feet of gas, but by 2008 the field had produced 2.8 trillion cubic feet of gas. This formation is the 9th largest source of natural gas in the United States.
Fracking at the ballot box
|Voting on Fracking|
|Not on ballot
November 2014 (potential measures)
- Opponents of fracking were preparing a statewide fracking ban initiative that would have given local governments the ability to ban fracking in their jurisdictions. This ballot measure was being prepared for the November 2014 ballot by the Colorado Community Rights Network. Supporters of the fracking ban were not able to collect enough signatures, however, and instead are preparing the measure for the November 2016 ballot.
- The following measures were set to appear on the November 2014 ballot in Colorado. On August 4, 2014, however, negotiations between anti and pro fracking groups resulted in these measures being removed from the November ballot.
- Colorado Environmental Rights Amendment (2014)
- Colorado Fiscal Impact of Ballot Measures Initiative (2014)
- Colorado Local Regulation of Oil and Gas Amendment (2014)
- Colorado Distribution of Oil and Gas Revenue Initiative (2014)
- Colorado Distribution of Oil and Gas Revenue Initiative (2014)
- Colorado Mandatory Setback of Oil and Gas Wells Amendment (2014)
- Colorado Local Regulation of Oil and Gas Development Initiative (2014)
on June 24, 2014, the City of Loveland voters defeated a ballot initiative to suspend fracking for two years.
There were three towns that passed ballot initiatives that imposed five-year fracking suspensions in 2013:
There is one town that passed a ballot initiative imposing an indefinite ban on fracking in 2013:
There is one town that passed a ballot initiative that imposed an indefinite ban on fracking in 2012:
In 2012, Longmont voters approved a citizen initiated charter amendment to ban hydraulic fracturing or fracking, a contentious method of extracting oil and gas. The measure was approved by nearly 60 percent of voters. Two lawsuits were filed against Longmont over this ban. The most recent lawsuit features the Colorado Oil and Gas Association (COGA) and the state's Colorado Oil and Gas Conservation Commission as plaintiffs. According to a Colorado Open Records Act request, both lawsuits together had already cost the city of Longmont almost $69,000 in legal fees as of March 31, 2013. On July 24, 2014, Boulder District Court Judge Dolores Mallard overruled the ban, saying that the city of Longmont "does not have the authority to prohibit what the state authorizes and permits." Mallard cited Voss v. Lundvall, a 1992 court ruling that gave states, rather than cities, control over oil and gas extraction regulations and bans. Question 300, however, remains in effect, since the ruling was immediately put on hold due to an appeal by Question 300 supporters. Anti-fracking lawyers and activists have pledged to take the appeal all the way to the Supreme Court if that is what it takes. Although Mallard's ruling will be counterfeited by a ruling from a higher court, it sets in motion a process likely to result in a judicial precedent that could apply to all of the many local ballot measures that seek to ban fracking in Colorado.
The use of fracking, often in combination with horizontal drilling, has made it possible to extract supplies of oil and natural gas that were once economically unfeasible to extract. This has led to significant growth in the domestic oil and gas industry, and in the supply of domestically produced oil and natural gas. The growth in activity has impacted the economy in direct ways, such as increased capital investments (from both the U.S. and other countries), royalty and lease payments, and government revenues in the form of fees and taxes. The increased supply of natural gas and oil has also affected electricity prices, manufacturing, service industries and employment. In many places, fracking has increased employment in the mining (oil and gas) sector and supporting industries, such as the restaurant and housing sectors. Consumers and manufacturers have also benefitted thus far from lower oil and natural gas prices, and increased demand for pipeline, drilling and other ancillary equipment. As demand for natural gas and oil grows, however, prices are expected to rise.
Taxes, fees and revenue
Fracking booms can increase local government revenue through increases in property and sales taxes, which can help compensate for the additional costs associated with an oil boom, as detailed below. The primary revenue streams from fracking--mineral leasing revenues and severance taxes--go to state and federal governments. In Colorado ad valorem taxes on the oil and gas industries are three time higher than in other industries. Also, in Colorado the state government makes transfers to local governments to try and offset the costs of increased oil and gas activities.
As of June 2013 Colorado employed the following taxes on crude oil, natural gas based on gross income:
- "2% if income less than $25,000
- $500 plus 3% of the excess over $24,999 for income $25,000-$99,999
- $2,750 plus 4% of the excess over $99,999 for income $100,000-$299,999
- $10,750 plus 5% of the excess over $299,999 for income over $300,000
- 4% tax on oil shale gross proceeds."
Wells that produce less than 15 barrels of oil a day are exempt, as are gas wells producing less than 90,000 cubic feet of gas per day. Of the total oil and gas revenue collected $1.5 million is deposited into the innovative energy fund. The remaining amount is divided equally between the state severance tax fund and the local government tax fund. Oil shale revenue is distributed differently; 40 percent goes to the state general fund, 40 percent goes to the state severance tax fund and the remaining 20 precent goes into the local government severance fund. Counties can also charge an Ad Valorem tax. This revenue goes directly to the local government. If a county charges an Ad Valorem tax then the severance tax charged may be credited up to 87.5 percent. There is also an Oil and Gas Conservation Levy that goes to Oil and Gas Conservation Environmental Response Fund. This tax can be no more than $0.0017 of market value of the oil or gas at the wellhead. The Oil and Gas Conservation Environmental Response Fund cannot exceed $4 million.
- In 2011, Colorado collected $114.9 million in severance tax from the oil and gas industry.
- In fiscal year 2012, transfers from the state government to local governments totaled $94 million.
- The Leeds study (see "Leeds study" below) estimated total government revenue in 2010 to be $1.1 billion, including property taxes, public leases, severance taxes and public leases.
In 2010 the state of Colorado collected $572 million in taxes from the oil and gas industry, of this:
- $63.7 million came from severance taxes,
- $123.8 million was derived from public royalties,
- $16.5 was brought in by public leases and
- $360 million was collected through property taxes.
Royalties and land sales
The United States is one of the few countries where property owners can own the right to use and build on their land, known as surface rights, but they may not own the rights to the minerals located under their property. Depending on the state the mineral rights may have been sold in the past and may now belong to someone other than the surface owner. In fact, those mineral rights may belong to more than one individual, a company, or many individuals, who now have the right to extract those minerals, and in some states this can happen without the permission of the property owner. This can cause tension between the mineral owner, or whoever is leasing the mineral rights, and property owner. The federal government doesn't collect data on oil and natural gas royalty and land sales on private land. A 2014 study attempted to estimate these figures and determined that Colorado (among the lower 48 states) was fifth in private royalty income in the nation. The study also found that for 2010:
- Private oil revenue was $2,016 million
- Private natural gas revenue was $5,089 million
- Estimated royalty income was $888 million
- Royalty income was 0.41 percent of state average income.
The Leeds study (see "Leeds study" below) estimates that landowners made $567 million in 2012 from royalty payments.
Economic impact studies
Below are studies about the economic impact of the oil and natural gas industry (also categorized as the mining industry in some studies) in Colorado. Both the author(s) and sponsor(s) of the studies are mentioned.
Study for the American Petroleum Institute
|IMPLAN and REMI are two econometric modeling systems used in both the private and public sectors to predict economic outcomes of policy changes. While these systems are widely used and highly respected, their results are theoretical and may not be universally accepted.
Because the oil and gas industry has grown so rapidly, there is not a wealth of data regarding its economic impacts. Instead economists use forecasting models, such as IMPLAN and REMI, to predict the impact increased fossil fuel extraction is having on the economy. These studies usually measure both direct impacts, i.e., the jobs and income being added within the oil and gas industry, and indirect impacts, i.e., jobs created throughout the supply chain. These studies also include induced impact, i.e., jobs created through increased spending due to growth in the industry.
The following economic impacts are taken from two studies done on the issue. One study was done by PricewaterhouseCoopers LLP, (PwC) a research consulting firm, for the American Petroleum Institute. According to the PwC study, the oil and gas industry added $25.8 billion in total value in 2011, including direct and indirect value. Of this, $12.4 billion, or 4.4 percent of the state's total value added, was direct, $6.7 billion was indirect and $6.5 billion was induced.
The PwC study attributed 213,100 jobs, or 6.7 percent of state employment in 2011 to jobs created directly, indirectly, or induced, from the oil and natural gas industry. The industry directly employed 69,700 people, or 2.7 percent of Colorado's total employment. Indirectly, the industry employed 61,675 people and induced 81,748 jobs. A majority of these indirect and direct jobs were in the services, financial and construction sectors. Direct, indirect and induced labor income, according to this study, was $14 billion, totaling 8.1 percent of the state's labor income in 2011. Direct labor income from the mining sector was $6.3 billion, or 3.6 percent of the state's total. Indirect labor income totaled $4,035 million and induced labor income was $3.7 billion.
A March 2014 study from the Leeds School of Business at the University of Colorado Boulder estimated the economic impact the proposed 2015 ban on fracking would have on the state. The authors argue a statewide ban would result in a 95 percent reduction in new oil and gas activity. The study estimates an average decrease of 68,000 jobs and $8 billion from state GDP between 2015 and 2020. Further, the study estimates a decline of $12 billion from state GDP and a loss of 93,000 jobs between 2015 to 2040. Additionally, $567 million of government revenue would be lost during the first five years of the ban, with $985 million lost by 2040. These numbers are estimated using baseline expectations and include jobs lost through the ripple effect, affecting industries from mining (oil and gas activities) to construction, engineering and R&D jobs, to government employment. The study does not predict that there would not be employment gains with a ban on fracking, but that the ban would slow employment growth.
According to this study, in 2012 the oil and gas sector comprised 3.7 percent of Colorado's GDP. Total oil and gas production reached $11.9 billion in value in 2013. Additionally, the average mining salary is $108,000, more than double the state average salary. Another study done for the oil and natural gas industry in 2012 attributed 28,200 jobs directly to oil and gas drilling and extraction, and supporting industries.
Because of the sudden and unprecedented growth in fracking across the United States, getting high-quality, unbiased, state-specific information on the environmental impacts of fracking can be difficult. Most studies that would fit those first two qualifications are government studies that focus on the nation as a whole. As such, much of the information that follows in this section may only apply generally to the state. State-specific information has been added where possible. The Colorado Oil and Gas Conservation Commission has been updating its regulations on the oil and gas industry as production has increased and citizens have become more involved in the industry's practices. According to one recent study of regulations across Colorado, "Although significant unknowns remain, fracking’s impacts on air quality, water quality, water quantity, and wildlife habitat are well-documented."
As with any type of energy extraction, there are several areas of risk when it comes to air quality. In the case of fracking, these risks include air pollutants such as VOCs and methane. With regard to carbon dioxide, when natural gas is used to generate electricity in power plants, it produces fewer carbon emissions than coal-fired power plants. According to a 2014 study by the National Oceanic and Atmospheric Administration, "as a result of the increased use of natural gas, CO2 emissions from U.S. fossil-fuel power plants were 23% lower in 2012 than they would have been” without the increase in natural gas use. During the extraction process, however, more methane is emitted, and methane actually traps 20 times more carbon dioxide than other greenhouse gases. Nevertheless, according to the International Energy Agency (IEA), CO2 emissions in the United States dropped by 3.8 percent in 2012, due in large part to the "increased availability of natural gas, linked to the shale gas revolution."
Some environmental groups have raised concerns that methane could be leaked during the extraction process, resulting in unnecessary pollution. Most of this pollution occurs during the well completion phase. Fracking operations can also emit known carcinogens, which have been linked with increased rates of cancer.
A 2014 report from the U.S. Environmental Protection Agency found a decrease of 3.3 percent in overall greenhouse gas emissions and a 12 percent decrease in methane emissions from 2011 to 2012. Natural gas extraction is the second largest producer of methane, after cattle.
The central and eastern United States have been experiencing an increased number of earthquakes over the last few years, according to the U.S. Geological Survey (USGS), the government agency responsible for such data. Studies from the USGS have not found fracking directly responsible for this increase in felt earthquakes; however, the USGS is looking into regulations that would use seismic data to determine thresholds dictating when and where fracking can occur. There is a growing body of evidence suggesting that this growth in the number earthquakes has been caused by the increased use of injection wells to dispose of fracking wastewater. While fracking has been rarely known to cause earthquakes, there is an established scientific link between earthquakes and the disposal of fluids in deep, underground injection wells. Once a well has been fracked, the water returned to the surface is called wastewater, and contains large amounts of salt and other contaminants. Some of this water can be recycled, but that water which can't be recycled is often stored in injection wells. These injection wells are generally considered the safest and most cost-effective place for wastewater to be stored. Injection wells are located thousands of feet underground and are encased in cement. Multiple drilling wells often rely on one disposal well for wastewater storage. The U.S. Environmental Protection Agency estimates there are 144,000 of these wells across the United States receiving 2 billion gallons of frack fluid per day.
Induced seismology, or man-made earthquakes, have been around for decades and can be caused by mining, damming rivers and injecting fluids into underground wells. Earthquakes are caused by injection wells when water pumped into underground wells causes the faults under the earth to slip. Even though scientists at the USGS have been able to cause earthquakes intentionally by carefully injecting liquid into the earth, the link between injection wells and earthquakes is not fully understood. One of the largest concerns for scientists and regulators is that they do not have the tools to predict whether wastewater will cause seismic activity. These concerns are compounded by the lack of knowledge about where faults are located across the central and eastern United States. The USGS is just beginning to map these areas in more detail in order to understand the seismic risks. As of June 2014, these earthquakes have typically been small, two or three in magnitude on the Richter scale, but at least one scientist has raised concerns that earthquakes could grow in intensity if old injection wells continue to be used for storage.
Earthquakes in Colorado and fracking
According to the Colorado Geological Survey (CGS) the state "is world famous for its triggered (induced) earthquakes." Despite the flurry of media attention surrounding the increased occurrence of earthquakes the Colorado Geological Survey maintains that it is "premature" to conclude that earthquakes in the state are manmade. After a large earthquake in August 2011 the Colorado Oil and Gas Conservation Commission asked the Colorado Geological Survey to begin reviewing underground injection control well permits. Around this time Colorado had 309 underground injection control wells. Colorado sits on a series of faults that are part of the Rio Grande Rift, which cuts across the central part of the state, as seen in the image to the right.
In the past, Colorado has experienced induced seismic activity from injection wells, dam building and coal mining. Colorado was also home to the first experiment where researchers were able to trigger an earthquake by varying the pressure of water injected underground. After a large earthquake--5.8 in magnitude on the Richter scale--in Trinidad on August 22, 2011 the CGS and the National Earthquake Information Center undertook two independent studies of the what triggered the earthquake. Both groups used different approaches and neither was able to conclude definitively that the earthquake was or wasn't triggered by human activity. In the decade previous to this large earthquake the Trinidad area had a swarm of earthquakes that appeared random to the Colorado Geological Survey and were too small to feel. After the Trinidad earthquake and a corresponding wave of media attention, in October of 2011, the Colorado Oil and Gas Conservation Commission asked the Colorado Geological Survey to begin reviewing Underground Injection Control well permits.
When it comes to water protection and fracking there are four main areas of risk: the depletion of fresh water sources, spills and leaks of fracking fluid into water, mismanaged produced water and flowback, and stormwater pollution. Up to 10 million gallons of fresh water may be required to frack one well. Stormwater, flowback, produced water and wastewater can be harmful because they contain total dissolved solids and naturally occurring radioactive materials. Because of the recent rapid growth in fracking, there are still many uncertainties about the effects of fracking on water. There are studies that link fracking to groundwater contamination, but they remain controversial. The U.S. Environmental Protection Agency is releasing a report in 2014 on the potential impacts of fracking on drinking water, and is working on effective programs for managing these potential risks. In 2011 were 513 reported oil spills in Colorado. As of May 13, 2014, there were 287 reported spills in Colorado. Of these, 18 affected ground water, four affected surface water and 96 spills were contained by a berm.
Fracking also requires the use of large volumes of water, and although this is not as much as other water-intensive industries, such as agriculture, the use of water by the industry has drawn attention. In 2010 fracking used 0.08 percent of the state's total water used. The Colorado Oil and Gas Conservation Commission estimates that between 2010 and 2015 fracking operators will use 32 billion gallons of water, bringing projected water use to 0.1 percent by 2015. The table below shows water use by withdrawal type to give context to this number. These data are for 2005, the most recent year for which data are available. Fuel extraction, including oil and gas extraction, is included in the mining category.
|Water withdrawals in Colorado in 2005|
|Industry||Water withdrawn (millions of gallons per day)|
|Irrigation (golf courses)||40.6|
|Mining (includes oil and gas)||21.42|
Water used in fracking comes from several sources in Colorado. Water can be:
- transported from out of state.
- leased from a landowner; usually this is irrigation water, which cannot be used for well construction without purchasing a water right.
- purchased from a water provider, this water can be either fresh or treated water. Treated water typically comes from a municipality. Occasionally operators may be able to divert water from a stream or river, but only if the body of water is experiencing a period of high flow.
- diverted from ground water sources, but only outside of designated ground water basins. Some well owners can sell the rights to water from inside special ground water basins, but only if their water right permits sales to oil and gas companies, which is usually done on a case-by-case basis with permission from the Division of Water Resources.
- diverted from completed wells or non-attributory aquifers. There are limits on how much water can be diverted from these sources.
- reused produced water.
- recycled well construction water.
According to the Bureau of Land Management in Colorado a majority of fracking fluids are recycled and no fluids are sent to wastewater treatment plants. For the small percentage of fluids disposed of, 60 percent goes into deep and closely-regulated waste injection wells, 20 percent evaporates from lined pits and 20 percent is discharged as usable surface water under permits from the Colorado Water Quality Control Commission."
Because of the recent and rapid growth of fracking, little is known about the potential impacts to human health. Government agencies dealing with human health issues have raised concerns about some chemicals that can released during the fracking process, including VOCs. The Centers for Disease Control is working with the EPA and federal, state and local agencies to better understand potential impacts.
One of the most widely-discussed studies on the health impacts of natural gas development is the 2014 McKenzie et al. study. This report analyzes the relationship between the density and location of natural gas wells (producing or not) within 10 miles of maternal residences on "three classes of birth defects, preterm birth and fetal growth." Researchers limited their search to births among the white population occurring from 1996-2009 (natural gas production picked up around 2000) and rural areas with populations smaller than 50,000 across 57 Colorado counties. Well areas were divided into tertiles: low, medium and high. Those living in an area with a high well count saw a 30 percent increase in congenital heart defects and were two times more likely to have a neural tube defect than areas with no wells (the sample size for this last group was small at 59 participants). There were some surprising, positive outcomes found, as exposure to natural gas drilling increased, babies born with what is considered to be a low birth weight decreased, as did preterm birth rates. The authors attribute the increase in negative effects on fetal development to benzene, solvents and air pollutants released during natural gas drilling. These connections are postulated by using past studies, and are not proven in this study. The authors do state they were not able to control for "socioeconomic status, health, nutrition, prenatal care, and pregnancy complications" and the length of time for which mothers resided near natural gas wells, which could limit the explanatory power of the their findings.
Fracking can also present challenges to communities. Increased oil and natural gas production happens in boom or bust cycles, and often these cycles disproportionately occur in rural communities. Increased oil and gas activity near homes has been traced to depressed home values. Large scale fracking booms can also lead to increases in crime, such as substance abuse, sex trade and domestic abuse. An influx of oil and gas workers also strains housing and traffic resources. This lack of housing can push oil and gas workers into 'man camps', or "clusters of mobile homes, RVs, and trucks" or into hotels. A fracking boom also puts heavy traffic on roads, which can strain infrastructure, increase traffic accidents, and increase the likelihood of oil spills. These changes can force local governments to respond by hiring more police, social workers, health care workers and emergency response personnel, thereby spending more funds on repairing roads and social programs. Currently, much of the tax revenue generated by the oil and gas industry goes to the federal and state government, making it difficult for local governments to respond to strains on their infrastructures. For example, in Garfield County 15 new police officers were hired to handle the increased crime.
Departments, agencies and organizations
- The Colorado Air Quality Control Commission (CAQCC) was created in 1970 by the Colorado State Legislature. The commission is responsible for air quality regulation, the regulation of pollution sources and holds hearings on state air law violations. The commission is composed of nine Colorado citizens all appointed by the Governor for three years. The CAQCC is housed under the Colorado Department of Public Health and the Environment, which also works with the COGCC on oil and gas regulation. The COGCC also oversees class II injection wells.
- The purpose of the Colorado Department of Natural Resources (CDNR) is to "develop, preserve and enhance the state's natural resources for the benefit and enjoyment of current and future citizens and visitors." The CDNR oversees the Colorado Oil and Gas Conservation Commission, the Colorado Division of Reclamation Mining and Safety, The Colorado Water Conservation Board and the Colorado Division of Water Resources. The CDNR also oversees state parks.
- The Colorado Department of Public Health and Environment (CDPHE) administers state and applicable federal environmental protection laws. With regards to oil and gas extraction activities the CDPHE oversees air quality issues, surface water quality, commercial waste disposal facilities and waste discharge.
- The Colorado House of Representatives' Agriculture, Livestock and Natural Resources Committee has legislative oversight of the Colorado Department of Natural Resources and "generally considered matters concerning water, agricultural, wildlife, mineral development, and recreation."
- The Colorado Oil and Gas Conservation Commission (COGCC) oversees the permitting and tracking for all oil and gas wells in the state. This process includes reviewing and permitting all new wells, approving reclamation of well pad areas once drilling has been completed and reviewing mechanical equipment tests. The COGCC was granted its authority through the Colorado Oil and Gas Conservation Act (COGCA). The primary task given to the COGCC by the COGCA is to prevent the waste of oil and natural gas and to accommodate surface owners by minimizing impacts to the landowner.
- The Senate's Agriculture, Natural Resources and Energy Committee has oversight over the Colorado Department of Natural Resources and the Colorado Energy Office. The Senate's committee oversees similar issues as the House committee, as quoted above, but also considers renewable energy development, conservation and utilities.
Laws and regulations
The federal agency, the U.S. Bureau of Land Management (BLM) oversees a significant portion of oil and gas activity in Colorado because it occurs on land they manage. The BLM requires operators to submit an Application for Permit to Drill. If this permit is approved, a BLM geologist must then identify groundwater aquifers and other potential health or safety risks. Based on these risks the geologists can require additional well construction procedures. BLM officials are also required to be on location during any drilling, for any casing or cementing activities. The BLM also requires pressure testing and cement bond logs, to ensure the well's integrity. Additionally, "if the fracturing of the well is considered to be a 'non-routine' fracture for the area, the BLM will always be onsite during those operations as well as when abnormal conditions develop during the drilling or completion of a well."
There are also several American Indian trust lands in Colorado that are overseen by the Southern Ute tribe. This tribe has their own rules for their lands and COGCC rules do not apply.
The COGCC has a series of regulations and court rulings that guide how it regulates the oil and gas industry. The COGCC works with the Colorado Department of Public Health and the Environment and CAQCC on dust and odor permitting. Oil and gas operators that have the potential to emit more than 5 tons of VOCs per year must obtain a Air Pollution Control Division permit. In Colorado large oil and gas producers have been working with environmental groups and the CAQCC to limit methane and VOC emissions. Colorado was the first state to regulate methane emissions. These new rules require companies to control or capture 95 percent of emissions. Operators have 15 days to repair methane leaks and are subject to routine inspections. These regulations are expected to cost the industry between $40 million and $100 million.
Oil and gas operators are also required to report spills in a timely manner through the Oil and Gas Information System. For more on these spills see above. The space between wells and schools, homes or businesses has been debated heavily in Colorado. Before 2013 oil and gas wells were required to be 350 feet from high-density areas and 150 feet from homes. In 2013 the COGCC revised these standards increasing the setback minimum to 500 feet, although this setback can be waived.
COGCC oil and gas regulations
- The 200 Series discusses record keeping rules, requires those using hydraulic fracturing to document the chemicals used unless the chemical is a trade secret. Operators have 120 days to disclose this information to the COGCC from the day the operations commenced. Operators are required to submit Comprehensive Drilling Plans that include potential impacts, maps of the area, waste management plan and descriptions of the wildlife that will be affected.
- The 300 Series affects the permitting process and outlines general drilling rules. Operators are required to submit a monthly report of all fluids injected into dedicated injection wells and operators must also submit mechanical integrity tests. This series affects new oil and gas locations, requiring drillers to submit of a list of all equipment that will be brought to the site and updates requirements for working with surface owners.
- The 400 Series contains rules for well casing and cementing and created a produced water discharge permitting system.
- The 600 Series comprises health and safety regulations. These include equipment safety regulations, well setback rules, mitigation measures and groundwater baseline sampling.
- The 700 Series reviews the financial instruments oil and gas operators must have and the Environmental Response Fund. Operators must have between $10,000 and $20,000 in insurance per well, depending on the well's depth and $1 million in general liability insurance.
- The 800 Series outlines noise, odor, dust and lighting abatement rules. This section also outlines the requirements for the pits that hold oil and gas activity waste.
- The 900 Series of oil and gas regulations from the COGCC created new standards for well exploration and production waste management and outlines the procedures if a spill occurs. These rules apply to the treatment and disposal of produced water.
- The 1000 Series outlines the rules around site preparation and well reclamation.
- The 1100 Series outlines pipeline regulations.
- The 1200 Series regulates the protection of wildlife.
Colorado Oil and Gas Conservation Act
The Colorado Oil and Gas Conservation Act (COGCA), last amended in 2007, created the COGCC and gave it the authority to make rules and regulations over many aspects of oil and gas drilling and to balance oil and gas extraction with public health and the environment. The COGCA set rules for who can be on the COGCC and the requirements for commission members. The COGCC was given the authority to oversee the "drilling, casing operation, and plugging" of wells; drilling permits; the chemical treatment of wells; the spacing of wells; worksite safety; production reporting; create an environmental response fund; and penalize violators of the law.
The COGCA was amended in 2007 to direct the COGCC to limit impacts of the oil and gas industry on wildlife. In 2008 several series of implementing regulations were crafted directing drilling requirements, mechanical testing, groundwater protection, well setbacks, noise abatement, centralized waste disposal facilities and many other areas of the drilling process.
Colorado has five types of local government structures: statutory municipalities, home rule municipalities, statutory counties, home rule counties and special districts. The power granted to each of these types of local government structures affects how they can regulate fracking. There are three towns that have a five year fracking suspension in place: Broomfield, Boulder and Fort Collins. All three cities passed the ban through ballot initiatives in November 2013. The City of Lafayette and Longmont City both have an indefinite ban on fracking.
Some of these bans have been challenged in court by supporters of the oil and gas extraction process. The Colorado Oil and Gas Association (COGA) challenged the City of Lafayette's fracking ban within a month of the initiative passing. COGA argues that the ban violates state law. As of March 20, 2014 the city has spent $24,384 on legal services to defend the ban, which passed with a 60 percent majority. Longmont City passed a fracking ban in November 2012. COGA has also challenged this ban in court. By April 2014, Longmont had spent $61,152 on the lawsuit. The city is also defending previous oil and gas regulations in court against a suit brought by the COGCC, which has cost the city $163,660 in legal fees. The City of Broomfield faced a court challenge from the Broomfield Balanced Energy Coalition that argued the city did not conduct the November 2013 election properly. The results have been upheld by Judge Chris Melonakis of the Colorado Seventeenth Judicial District Court. That case cost the city $23,400 in legal fees. The city also spent $37,182 on legal advice in 2013 when it was crafting new oil and gas regulations. The City of Boulder also passed a fracking ban in November 2013, which ban has not yet been challenged in court. The city had also spent money, $2,494, crafting stricter oil and gas regulations.
In April 2013, Arapahoe County Commissioners developed a memorandum of understanding (MOU) between the county and oil and gas developers to establish more strict oil and gas processes. In exchange for adopting processes outside traditional regulations, oil and gas companies could use a "less costly administrative permitting process" that decreased the review process by at least four months. This MOU created standards for water quality testing, noise, facility lighting, water supply, spill management, among many other aspects of the oil and gas extraction process. These standards are not intended to take the place of traditional regulations and operators that sign this MOU must abide by whichever standard is the highest.
Ballot measuresBelow is a list of fracking-related ballot measures across Colorado.
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- Broomfield Five Year Fracking Suspension, Question 300 (November 2013)
- City of Boulder Five Year Fracking Suspension, Question 2H (November 2013)
- City of Fort Collins Five Year Fracking Suspension Initiative, Question 2A (November 2013)
- City of Lafayette "Community Rights Act" Fracking Ban Amendment, Question 300 (November 2013)
- The Colorado Community Rights Network (CCRN) is working to create a Community Bill of Rights "enforcing residents' rights to clean air, clean water, freedom from chemical trespass, and local self-determination." The CCRN was the leading force behind the 2013 fracking ban in the City of Lafayette. The CCRN is also the supporting institution behind a statewide ballot measure that would change the state's constitution to allow local communities in Colorado to define fundamental rights and prevent corporations from denying those rights, and would ultimately allow local governments to ban fracking.
- The Colorado Oil and Gas Association was founded in 1984 with the mission to "foster and promote the beneficial, efficient, responsible and environmentally sound development, production and use of Colorado oil and natural gas." The association has four chapters across the state and a series of committees that discusses how to represent their members on various issues including legal, legislative and regulatory issues, environmental, health and safety issues, and taxes.
- The Community Environmental Legal Defense Fund (CELDF) is a non-profit law firm committed to "providing free and affordable legal services to communities facing threats to their local environment, local agriculture, the local economy, and quality of life." The CELDF works in communities across the country and has assisted many local groups with the legal framework around ballot measures seeking to ban fracking.
- FrackingSENSE is a moderated discussion series about fracking sponsored by CU-Boulder's Center of the American West. These discussions cover topics including property rights, water and air quality, health and government regulation.
- Local Control Colorado is a "coalition of community, consumer and public interest groups" who seek to protect their Colorado way of life "from the potential harms of fracking" by advocating for state ballot measures.
- The Colorado Pipeline Association (CoPA) consists of pipeline operators in the state that are dedicated to promoting pipeline safety by providing information for excavators, state residents, businesses, emergency responders and public officials. The association holds meetings and inspects, regulates and enforces intrastate gas pipeline safety requirements.
- Jared Polis, a Democratic member of the U.S. House of Representatives, from the 2nd Congressional District has been named by Politico as the financial backer of nine ballot measures aimed at limiting or banning fracking through regulations and zoning ordinances.
- Frank McNulty and Jerry Sonnenberg, both Republican members of the Colorado House of Representatives proposed a ballot measure in March 2014 that would bar municipalities that ban fracking from receiving their share of revenue collected from the oil and gas industry. It would also bar cities that ban fracking from receiving grants from the Colorado Department of Local Affairs, which is funded in part by the state's severance tax. The two state representatives argue that cities could lose an estimated $275 million in severance taxes.
Natural gas use in Colorado
- See Energy policy in Colorado for information on the price of natural gas.
The following table shows the energy types that are used to heat homes in Colorado. Natural gas makes up over 72 percent of home heating in that state, and as of March 2014 this was supplied entirely by natural gas produced in that state. Because of the way that utilities are regulated, consumers shouldn't expect to see lower natural gas prices in their state until regulators goes through their next ratemaking cycle.
- See also: State Energy Rankings to compare all 50 states
|Consumption of energy for heating homes in Colorado|
|Source||Colorado 2011||U.S. average 2011|
|Liquid Petroleum Gases (LPG)||4.8%||5%|
Natural gas-fired power plants provide 16.48 percent of Colorado's electricity. Natural gas is delivered using more than 45,000 miles of pipelines to residents of Colorado. Ten companies operate these natural gas pipelines.
|Where electricity comes from in Colorado|
|Type||Amount generated (MWh)||% of state**||% of U.S.**|
|Total net electricity generation||3,998||100%||0%|
|**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.|
There are 14 natural gas services in Colorado. Six of those 14 also provide electricity. The gas supply is mainly purchased through external sources for resale through the gas utilities. Eight of the utilities are municipal utilities, meaning they are operated through local cities' city councils and local government. The remaining six natural gas utilities are investor-owned.
This section displays the most recent stories in a Google news search for the term "Colorado+Fracking"
- All stories may not be relevant to this page due to the nature of the search engine.
- Colorado Profile at the U.S. Energy Information Administration
- Colorado Oil and Gas Conservation Commission
- Colorado Department of Public Health
- Colorado State Energy Office
- Colorado Oil and Gas Conservation Commission, "Public Announcements," April 17, 2014
- Colorado Oil and Gas Conservation Commission, "Typical Questions from the Public About Oil and Gas Development in Colorado," accessed April 17, 2014
- Leeds School of Business, Business Research Division, University of Colorado Boulder, "Hydraulic Fracturing Ban, The Economic Impact of a Statewide Fracking Ban in Colorado," March 2014
- Colorado doesn't collect data on whether wells have been fracked. This number was estimated by Environment America and may not be accurate. This figure includes all wells fracked between 2005 and October 2013.
- Environment America, "Fracking by the Numbers," October 2013
- The National Review, "Fracking Fracas in Loveland," June 17, 2014
- The Coloradoan, "Anti-fracking group calls off petition drive," July 14, 2014
- The Denver Post, "Community rights ballot measure pulled due to lack of signatures," July 14, 2014
- Quinnipiac University, "Colorado Gov Has Early Lead In Reelect Bid, Quinnipiac University Poll Finds; Voters Back Fracking, Mixed Signals On Gun Control," November 19, 2013
- U.S. Energy Information Administration, "Colorado Profile," October 2013
- Environmentally Conscious Consumer for Oil Shale, "Oil Shale in Colorado, Utah and Wyoming," accessed April 23, 2014
- Daily Reckoning, "Oil Shale Reserves," accessed April 23, 2014
- Colorado Oil and Gas Conservation Commission, "Colorado Oil and Gas Production-Update (April 2013)," April 2013
- The Niobrara News, "Niobrara Formation Genesis," accessed April 18, 2014
- Colorado Oil and Gas Association , "Meet the Niobrara," accessed April 22, 2014
- U.S. Environmental Protection Agency, "Attachment 10 The Sand Wash Basin," June 2004
- Governing, "Last-Minute Deal Keeps Fracking Measure Off Colorado Ballot," August 5, 2014
- Coloradan.com, "As Fort Collins awaits similar fracking lawsuit, Longmont racks up $69,000 in legal fees," May 2, 2013
- Inside Climate News, "Colorado: Judge Strikes Down Town's Fracking Ban," July 25, 2014
- IHS, "US unconventional oil and gas revolution to increase disposable income by more than $2,700 per household and boost US trade position by more than $164 billion in 2020," accessed September 17, 2014
- National Conference of State Legislatures, "State Revenues and the Natural gas Boom: an Assessment of State oil and gas Production Taxes," June 2013
- Stanford Law School Student Journals, "Local Government Fracking Regulations: A Colorado Case Study,"January 2014
- Colorado Oil and Gas Association, "Fueling Economic Growth: The Impact of Colorado's Oil and Gas Industry," accessed May 12, 2014
- Geology.com, “Mineral Rights,” accessed January 29, 2014
- All the data presented below are in millions of nominal dollars. The royalty income figures assume a 1/8th royalty rate.
- Social Science Research Network, "U.S. Private Oil and Natural Gas Royalties: Estimates and Policy Considerations," March 12, 2014
- IMPLAN, "IMPLAN's History of Expert Economic Data," accessed September 17, 2014
- REMI, "About Us," accessed September 17, 2014
- REMI, "Clients," accessed September 17, 2014
- PricewaterhouseCooper LLP, "Economic Impacts of the Oil and Natural Gas Industry on the US Economy 2011," July 2013
- This study uses REMI modeling, a type of economic analysis that uses data to predict future economic impacts based on models
- Cooperative Institute for Research Environmental Sciences,, "New study: U.S. power plant emissions down," January 9, 2014
- International Energy Agency, "Redrawing the Energy-Climate Map," June 10, 2013
- University of Oklahoma, "Hydraulic Fracturing and Water Resources," accessed March 15, 2014
- Senate Committee on Energy and Natural Resources, "Written Testimony of Frances Beinecke," accessed March 2, 2014
- The Wall Street Journal, "Talk About Natural Gas: Cow Belches Top Methane List," February 26, 2014
- U.S. Geological Survey, "Man-Made Earthquakes Update," January 17, 2014, accessed March 10, 2014
- National Geographic, "Scientists Warn of Quake Risk From Fracking Operations," May 2, 2014
- National Public Radio, "How Oil and Gas Disposal Wells Can Cause Earthquakes," accessed June 2, 2014
- Colorado Geological Survey, "Earthquakes Triggered by Humans in Colorado—a background paper by the Colorado Geological Survey," accessed June 5, 2014
- Colorado Geological Survey, "The Trinidad, Colorado Earthquakes," accessed June 5, 2014
- Denver Post, "Colorado officials question link of fracking-waste disposal to quakes," December 4, 2012
- U.S. Environmental Protection Agency, "Natural Gas Extraction - Hydraulic Fracturing," accessed March 10, 2014
- Colorado Oil and Gas Conservation Commission, "COGIS-Inspection/Incident Inquiry," accessed May 13, 2014
- Colorado Oil and Gas Conservation Commission, "Water Sources and Demand for the Hydraulic Fracturing of Oil and Gas Wells in Colorado from 2010 through 2015", accessed May 9, 2014
- Colorado Oil and Gas Conservation Commission, "Water Sources and Demand for the Hydraulic Fracturing of Oil and Gas Wells in Colorado from 2010 through 2015", accessed May 9, 2014
- U.S. Bureau of Land Management, "Fracking on BLM Colorado Well Sites," accessed May 9, 2014
- U.S. Department of Health and Human Services, "Garfield County," March 13, 2008, accessed March 10, 2014
- Centers for Disease Control, "Review of Federal Hydraulic Fracturing Research," April 26, 2013, accessed March 10, 2014
- National Institute of Environmental Health Sciences, "Birth Outcomes and Maternal Residential Proximity to Natural Gas Development in Rural Colorado," January 28, 2014
- Colorado Air Quality Control Board, "Welcome to the Colorado Air Quality Control Board," accessed May 12, 2014
- Colorado School of Mines, "State Regulations: Colorado," accessed May 12, 2014
- Colorado Department of Natural Resources, "Home," accessed May 12, 2014
- Colorado Legislative Council, "House Agricultural, Livestock and Natural Resources Committee," accessed May 12, 2014
- Colorado Legislative Council, "Senate Agricultural, Natural Resources, and Energy Committee," accessed May 12, 2014
- Colorado Oil and Gas Conservation Commission, "Amended Rules," accessed May 13, 2014
- Colorado Department of Public Health and the Environment, "Oil and Gas Odor and Dust Permitting," May 12, 2014
- Colorado Department of Public Health and the Environment, "Colorado Oil and Gas Conservation Commission (COGCC) 805 series requirement," September 28, 2009
- The Denver Post, "Colorado adopts tougher air rules for oil, gas industry," February 25, 2014
- Colorado Oil and Gas Conservation Commission, "300 and 500 Series Permitting Process," accessed May 12, 2014
- Colorado Oil and Gas Conservation Commission, "Oil and Gas Conservation Act," July 1, 2007
- Daily Camera, "Longmont, Broomfield, Lafayette spend $100K defending fracking bans," May 15, 2014
- Colorado Community Rights Network, "Home," accessed May 12, 2014
- Colorado Oil and Gas Association, "COGA Committees," accessed May 9, 2014
- Colorado Oil and Gas Association, "Chapters," accessed May 9, 2014
- Colorado Oil and Gas Association, "Mission," accessed May 9, 2014
- Community Environmental Legal Defense Fund, "Mission Statement," accessed May 12, 2014
- E & E News, "Advocacy: Behind multiple local campaigns to ban fracking, one Pa. legal clinic," March 31, 2014
- Center of the American West, "FrackingSENSE 2.0," accessed May 12, 2014
- Local Control Colorado, "Who is Local Control Colorado?," accessed May 8. 2014
- Pipeline Association for Public Awareness, Colorado Pipelines Association, accessed March 10, 2014
- Politico Magazine, "How Fracking Could Break Colorado Democrats," April 15, 2014
- Denver Business Journal, "Udall addresses Colorado fracking fight; Gardner fires back," May 30, 2014
- The Washington Times, "Fracking initiatives starts to fracture Colorado," March 24, 2014
- Colorado Pipeline Association, Homepage, accessed February 21, 2014
- These figures come from the EIA State Profiles and Energy Estimates  U.S. Energy Information Administration, "Colorado Overview," accessed February 5, 2014
- Governor's Energy Office, 2010 Colorado Utilities Report, August 2010, accessed February 21, 2014
State of Colorado
|State executive officers||
Governor | Lieutenant Governor | Attorney General | Secretary of State | Treasurer | Commissioner of Education | Commissioner of Insurance | Commissioner of Agriculture | Executive Director of Natural Resources | Executive Director of Labor and Employment | Chair of Public Utilities |