OIL AND GASAND

GARFIELD COUNTY

Presented To –CLUB 20 Spring Meeting

March 20, 2004

Presented By -Doug Dennison, Oil & Gas Auditor

2March 20, 2004

Outline

• Background

• 2003 Complaint Summary

• A County’s Role in Oil & Gas Development

• Garfield County’s Approach & Initiatives

3March 20, 2004

Background

• Most drilling activity in Colorado– As of 03/12/04, 31 out of 64 drilling rigs operating

in Colorado were in Garfield County – next most was Weld County with 14 rigs

– At least nine oil & gas companies are actively involved in exploration and production of natural gas in the county

– Most exploration and production of natural gas is from tight sands but potential of coal bed natural gas production is being evaluated

4March 20, 2004

Background (cont.)

• APDs approved– CY 2003 = 566, a record high– CY 2004 (as of 03/17/04) = 141– Projected for 2004 = >650

• Over 1,600 active wells

• Over 300 new natural gas wells drilled during 2003 with over 500 planned for 2004

5March 20, 2004

2003 Summary of Complaints

Complaints Received 4/1/03 – 12/31/03Category Number of Complaints

Odors/Air Quality 23

Traffic 19

Facility Location/Size 14

Dust/Roads 12

Private Property Damage 11

Water Concerns 10

Noise 10

Other 8

Leaks/Spills 7

Lights/Visual 5

Trash 4

6March 20, 2004

A County’s Role in Oil & Gas Development

• CAUTION: There is no “one-size-fits-all” solution– Local government’s involvement in and

regulation of industry activities is dictated by several factors, including:

• Level of industry activity• Available resources• Political environment• Technical factors which dictate development

practices

7March 20, 2004

A County’s Role in Oil & Gas Development (cont.)

• In the simplest terms, a county’s role is to “fill the gap” where industry activities are not addressed by State and Federal Regulations– For example

• Land-use regulations• Local road-use regulations

• Participate in the COGCC LGD process and utilize the process to its fullest extent

8March 20, 2004

A County’s Role in Oil & Gas Development (cont.)

• Actively participate in COGCC hearings and rulemakings

• Provide opportunities for citizens to receive education regarding industry

• Provide a forum for issues surrounding the industry to be discussed

• Participate with State and Federal agencies in review of proposed activities

9March 20, 2004

A County’s Role in Oil & Gas Development (cont.)

• Devote resources, as needed and available, to assist public in dealing with impact from industry

• Coordinate with other local agencies (e.g., municipalities, fire districts, etc.) to address impacts

10March 20, 2004

Garfield County’s Approach & Initiatives

• Attempting to establish and maintain positive relationships with industry and State and Federal regulators to effectively address issues

• Actively participating in rulemaking discussions with CCI, COGCC and COGA

• Co-sponsor of NW Colorado Oil & Gas Forum• Maximizing the use of all existing resources to deal

with impacts from industry– Coordinating training needs for industry with Colorado

Mountain College– Assisting local emergency responders and industry in

assessing HAZMAT capabilities and training needs

11March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• First county in CO to hire a full-time individual to be focal point for all industry activities – Garfield County Oil & Gas Auditor

• Specific Duties– Serve as a liaison between citizens, industry,

county, and regulators– Educate citizens on industry activities– Respond to complaints and develop and maintain

a database of citizen complaints– Review all Applications to Drill (APDs) for new

wells

12March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• Oil & Gas Auditor - Specific Duties (cont.)– Develop technical information library– Conduct periodic informational meetings– Assist Assessor’s and Treasurer’s offices

in validating industry financial and county royalty payment information

– Provide input and advice to BOCC regarding industry issues

13March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• Oil & Gas Auditor - Specific Duties (cont.)– Participate in land-use review process for

industry activities– Participate in development of new

industry-related land-use regulations– Facilitate “lessons-learned” reviews of

industry-related incidents– Other duties, as assigned and needed

14March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• New Initiatives– Establishing Garfield County Energy

Advisory Board (EAB)• Currently stated mission of the EAB is –

“… to provide a forum for the oil and gas industry, the public, impacted landowners, and local government to prevent or minimize conflict associated with oil and gas development through positive and proactive communication and actions that encourage responsible and balanced development of these resources within Garfield County. “

15March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• New Initiatives (cont.)– Establishing Garfield Count Energy

Advisory Board (EAB) (cont.)• Membership of the EAB will include –

– Municipalities– School districts– Citizen groups– Cattlemen's associations– Industry– 6 citizen representatives

16March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• New Initiatives (cont.)– Evaluating new land-use regulations

regarding the oil & gas industry• Current revision consists of development plan

review via a primarily administrative process• Regulations have been referred to Planning &

Zoning Commission for review and may be reviewed by BOCC again in May, 2004

17March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• New Initiatives (cont.)– Developing program for performing air-quality

monitoring in western GarCo• Assembling a group consisting of citizen groups,

Colorado Mountain College, local school districts, CDPHE, COGCC, industry and others to address this issue

• Currently pursuing grant funds from CDPHE for start-up costs

• Will pursue energy impact grants and other funding sources in the next several months

• Pursuing training from CDPHE for certified odor assessors

18March 20, 2004

Garfield County’s Approach & Initiatives (cont.)

• Summary– GarCo’s relationship with industry is one

of mutual need• The county benefits from additional tax

revenue, increased employment, etc.• Industry must recognize the needs of the

community and work with the county and other local governments to address those needs