By David A. Hill, Executive Editor

In his column this week, Contributing Editor Richard Martin reports on the festering concern over the adverse effects of the oil-and-gas boom of the early 2000s in the high desert country of the Western Slope of Colorado. Normally supportive of the industry, many of the local citizenry are increasingly alarmed by the specter of contaminated wells and evidence of pervasive toxins in the region’s environment.

Contaminated water supplies are just one of several pressing issues confronting the Colorado Oil and Gas Conservation Commission (COGCC), the state agency responsible for regulating the industry. If anyone thought it would be a relatively quiet fall for COGCC, now that several months have passed since the first of new, more stringent drilling regulations went into effect, they thought wrong.

Given the intense public debates on several fronts surround these issues, not to mention the dubious claims by politicians and other stakeholders in the state, Colorado Energy News thought now would be a good time to speak with the Executive Director of the Commission, Dave Neslin, in this exclusive interview.

COLORADO ENEGY NEWS: How are you addressing the issue of well water contamination such as that found on Ned Prather’s property? (The land owner drank a glass of water at his remote cabin northeast of DeBeque which sickened him.)

DAVE NESLIN: COGCC is continuing an in-depth investigation into the contamination problem with excavation, multiple sample taking and extensive lab analysis. We’re taking the Prather issue very seriously and have already spent hundreds of hours of staff time, as well as $130,000 on consulting and lab work, to get to the bottom of it - and more work is underway this fall. One of the issues we face is that the area in question has difficult topography and we have had to investigate multiple potential sources because of the extensive oil and gas development in the area .

CEN: Also on the Western Slope, Antero’s future drilling plans on Battlement Mesa are a big issue for locals in the area. What are you doing to address their concerns?

NESLIN: Our new regulations include a process for developing comprehensive drilling plans to address large scale drilling programs, and Antero has told us that they intend to develop such a plan for Battlement Mesa. This will provide a mechanism for public notice and comment, inter-agency consultation, and identification of appropriate conditions and mitigation measures. We previously met with Battlement Mesa residents to discuss how they can participate in this process and to hear their concerns. Antero is still meeting with area residents to obtain input and work through issues, and they have not yet submitted their drilling plans for the Mesa.

CEN: Another issue on the Western Slope is drilling near the 1969 Rulison nuclear blast site. What are you doing to address that issue?

NESLIN: After consulting with a variety of federal, state, and local agencies, we’ve put into place a number of very specific conditions to address drilling activity in the general area of the test site. Within ½ mile of the original blast site, any permit application will be subject to a formal hearing before our Commission, and the applicant will be required to demonstrate that its proposed well will protect public health and safety. From ½ mile to 3 miles from the blast site, applicants must comply with a comprehensive sampling, analysis, and emergency response plan. Among other things, that plan requires special surveys, real time evaluation of drill cuttings and fluids, and compliance with emergency response procedures.

We are continuing to work with the Colorado Department of Public Health, the U.S. Department of Energy, Garfield County, and the property owners to implement and refine these requirements. Geologists, hydrologists, and physicists have been involved in this work, as well as other consulting experts. We have also arranged for a firm to perform an audit of the implementation of the sampling plan.

Public health and safety is paramount to permitting any drilling in the Rulison area and it is an ongoing process for us to ensure it. Again, the COGCC will allow drilling in this area only if the operator can meet the stringent safeguards we set up.

CEN: What is your opinion of the way energy companies are complying with the new regulations the Commission put in place earlier this year?

NESLIN: Overall, we’re pleased with the way the industry is complying with the amended rules. Despite the economic downturn and decrease in gas prices, operators have submitted hundreds of new permit applications, and they are also implementing new health, safety, and environmental requirements. At least 10 companies are currently working on comprehensive drilling plans and wildlife mitigation agreements which would collectively cover hundreds of thousands of acres and thousands of new wells in Western Colorado. We believe that these landscape-level plans and agreements will improve efficiency for operators and the COGCC, ensure that cumulative effects are addressed, and help us find more win-win solutions.

As an example of the cooperation that is occurring , last week the COGCC and the University of Colorado Natural Resources Law Center’s Intermountain Oil and Gas BMP Project jointly held a meeting in Rifle that brought together oil and gas stakeholders on the West Slope. Energy companies, federal, state, and local agencies and environmental groups were represented. The “Best Practices for Community and Environmental Protection” conference essentially focused on the type of practices which companies can develop that will enable optimum energy development while protecting the environment.

CEN: Some in the industry have complained that COGCC should have phased in the new regulations over a period of time, especially given the current economic problems. What’s your response?

NESLIN: Actually, that is exactly what we’re doing. Let’s look back: The new rules were approved last December. They went into effect for private land in April and then July 1st for Federal land. Specific rule requirements are being phased over a longer period, for example emission combustors - Rule 805 - didn’t take effect until late summer. As additional examples, rules governing tank painting won’t become effective until next year, and amended pit lining requirements will not go into effect for the northeast and southeast areas of Colorado until May, 2011.

We think the new regulations providing for clarification of mitigation issues in advance of drilling will make the whole process more efficient - for the energy companies and for us. The new process is creating efficiencies and developing models. The “overall landscape” approach being taken offers some significant trade-offs beneficial to the environment and to operators.

CEN: Will you be extending the permit period to two years?

NESLIN: The industry asked us to consider extending permit terms to two years because of the time that is required to drill multiple wells from a single pad and the additional opportunities for public input and inter-agency consultation under the amended rules. We believe that this request merits serious consideration, and we will be discussing it with our Commission next week. Our Commissioners will make the final decision on it.

One thing I would like to remind everyone about is that you can read the complete COGCC staff reports covering specific projects, meeting proceedings, rules and everything else we carry out at the Commission by going online to our website at www.colorado.gov/cogcc.

CEN: Great to get your take on these issues and being able to share the information with our readers, Dave. Thanks for your time.

NESLIN: You’re welcome.