Colorado industry worries anti-fracking sentiment could spread

Houston (Platts)--15Jul2013/504 pm EDT/2104 GMT


Public sentiment against hydraulic fracturing appears to be on the rise in eastern Colorado, a development that worries industry representatives and state officials, who fear the anti-fracking backlash could stymie oil and gas development in that part of the state, especially in the rapidly growing Niobrara Shale play.

Local groups are springing up in cities and towns along the Front Range, particularly in Boulder and surrounding counties, calling for a ban on the practice in their communities. Currently three eastern Colorado cities -- Boulder, Longmont and Fort Collins -- along with Boulder County have enacted moratoria or outright bans on fracking.

In addition, groups in the Front Range cities of Lafayette, Loveland and Broomfield are circulating petitions calling for anti-fracking measures to be placed on the ballot in their communities, Sam Schabacker, an organizer for the Mountain West region of Food and Water Watch said.

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"Our organization, along with many others have been involved in efforts to give citizens the right to vote on whether they want fracking next to their homes and schools in Colorado," Schabacker said.

While anti-fracking petition drives are being conducted in municipalities across the state, "at this point they're concentrated within the Front Range," along a swath that runs from Colorado Springs north through Fort Collins, Schabacker said.

This worries the oil and gas industry. In an email, Kathleen Sgamma, Western Energy Alliance vice president of government affairs, expressed concern that if the anti-fracking campaign begins taking root in a number of Front Range communities, it could harm future gas and oil development in the Niobrara Shale, which includes a big chunk of northeastern Colorado, as well as parts of Kansas, Nebraska and Wyoming.

"At this time there's no sign that companies are backing off their exploration and development activities in the Niobrara. However, that could change dramatically if that anti-fracking sentiment, which is now shared by a minority of the population, turns into real fracking bans," she said.

Stan Dempsey, president of the Colorado Petroleum Association, downplayed the threat the proposed fracking bans could pose to Niobrara development.

Most of the local ballot initiatives are concentrated in communities in Boulder County and its neighbor to the north, Larimer County, while most of the Niobrara development is concentrated in Adams and Arapaho counties to the southeast of Boulder County, he said in an interview.

But Dempsey added that CPA is concerned when any local jurisdiction adopts an anti-fracking measure, which he said puts the municipality in violation of state law, which gives jurisdiction over oil and gas development to the state.

"Our industry's belief is they are unconstitutional," he said.

He pointed to a suit in which the Colorado Oil and Gas Association is challenging the city of Longmont's fracking ban. COGA sued the city last December after voters approved a ban on fracking in the November 2012 election and in a ruling earlier this month a Boulder County judge added the Colorado Oil and Gas Conservation Commission to the suit.

"That decision as it works its way through the various courts in Colorado will probably support our position that these bans are not going to pass constitutional muster," Dempsey said.

In a statement COGCC Director Matt Lepore said that while the commission did not initiate the COGA suit against the city, "the COGCC does believe Longmont's ban on hydraulic fracturing is contrary to state law, and we believe clarity from the courts on this matter is important for all parties."

Megan Castle, a spokeswoman for Governor John Hickenlooper said in an email that the state reserves the right to sue other municipalities that enact fracking bans "on a case-by-case basis."

Dempsey said that in addition to existing or future local fracking bans and moratoria, he and other industry representatives are concerned about the possibility that a measure calling for a statewide fracking ban could appear on the ballot in next year's state elections.

"The industry is engaging in communities throughout Colorado to talk about the benefits that our industry brings to Colorado, not only in the production of energy but also the jobs that are industry creates in the communities in which we operate," he said.

"I think that that's evidence that ... Colorado's regulations protect the health of Coloradans and that at the end of the day, they'll view the actions of the people that want to ban hydraulic fracturing -- a practice that's been used millions of times -- as being unreasonable," he said.

--Jim Magill, jim.magill@platts.com
--Edited by Derek Sands, derek.sands@platts.com

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