By CEN Staff

With last week’s Legislative passage of new state oil and gas regulations  — part of omnibus rule review bill, HB 1292, the long rule making process finally came to a close. Energy companies are now pulling the proverbial “all nighter” as they study the rules before several of them become law on April 1st (April Fool’s Day). We’re certain the irony of that date is not escaping oil and gas executives.

The Legislature approved the rules despite strong objections from Republican lawmakers and other opponents, who argued that allowing them to take effect this year would harm one of Colorado’s most important industries at an extremely fragile time, especially for operators who have slashed drilling and the local economies who depend on them.

The state’s drilling slowdown combined with slumping commodity prices and an overall struggling economy, mean we may not get an accurate assessment of the regulations’ impact for quite some time.

State officials are reassuring the industry that transitioning into the new rules should be relatively smooth for most operators since drilling permits approved before April 1st are subject to the old set of regulations. Any permit application received through tomorrow will be processed under the old rules.

(Editor’s Note: Reader Ken Wonstolen makes an important clarification on the permit approval process and the old and new rules that apply starting tomorrow in his comments at the end of this article.)

Each permit is valid for one year, and thousands have already been approved on wells yet to be drilled.

As a result, most of this year’s energy development in the Piceance Basin hub will take place under the old rules, noted Harris Sherman, executive director of the state Department of Natural Resources and chairman of the oil and gas commission.

“There’s going to be a transition period which will, we believe, be helpful to the companies,” Sherman said.

Wayne Bankert of producer company, Laramie Energy II told a reporter from the Grand Junction Sentinel that he was “just still trying to muddle through all those rules and trying to figure them out myself. It’s going to take a while.”

State officials have said throughout the rulemaking process their overall objectives were to improve protection of public health, the environment and wildlife. Some of the new regs include maintaining chemical inventories for state inspection, lining of most pits to reduce leaking, new odor controls, new reclamation standards, processes that would have energy companies consult with state health and wildlife officials and additional protections of municipal watersheds.