Category Archives: Regulation Effect On Big Oil

Resistance To And Calls For New Oil & Gas Regulations Abound

 Issue 103- Front Range (CO) Drilling Controversy

Introduction…Two people were killed by a May 2017 home explosion in Firestone, Colorado.  Gas entered the basement through a cut flow line.  Colorado Gov. John Hickenlooper ordered a statewide review of oil and gas operations after the deadly fire.

The one inch flow line had been abandoned according to Anadarko Petroleum Corporation, the current owner.  However, the flow line was not disconnected from the wellhead or capped.

Controversy Ignited…People living near gas wells in Garfield, Colorado claim they have experienced an array of health effects from exposure to high concentration of volatile organic compounds such as bensene and toluene.  And the Firestone explosion and deaths has increased the fear of health effects.

The battle over oil and gas drilling in residential area was brought to the Colorado legislature this spring.  Democrats and environmental groups seeking to impose rules that would push fracking further away from schools and public facilities.  The Firestone exposition was identified as one more reason to pass such legislation.

The legislation did not pass.  However, a cut flow line that was abandoned has nothing to do with fracking.  They are two totally separate issues.

On the opposite side of the controversy... along Boulder, Colorado’s front range, support for oil and gas has grown, though it often goes unnoticed amidst the cries of what some call a vocal minority.  In particular, this desire for less regulation is predominant.

My experience in Boulder…About eight years ago I worked a 560-acre real estate development east of Boulder near Estes Park.  The anti-development fervor was so strong, that Boulder County had a special tax to be used to take large acreage out of private hands, never to be developed.  The only way I could develop this land was to subdivide into 35 acre tracts.  It is fascinating to see that same area supporting oil and gas development.

Conclusion...When tragedy strikes, hysteria is often whipped up.  It seems Gov. Hickenlooper’s ordered statewide review of oil and gas operations is appropriate.  If some health and safety issue is lacking, then it should be addressed.

In general, the leaders in the oil and gas industry do not support President Donald’s Trump’s call to reduce regulation. In annual reports to U.S. Security and Exchange Commission, 13 of the biggest 15 oil and gas producers said that compliance with current regulations is not impacting their financial operations or financial condition.

Sources: Amelia Arvesen, “Firestone explosion started by gas from cut flow line near house,” Time-Call Carbon Valley, 2 May 2017; Ben Adler, “Living next to natural gas wells is not fun,” grist, 18 July 2017; Josh Keefe, “in Colorado Fracking Fight, Emails Show Constituents Begging Lawmakers For Help,” IBT Times, 24 July 2017; Richard Valdmanis, “As Trump targets energy rules, oil companies downplay their impact, Reuters, 23 March 2017