(Reuters) - Colorado oil and gas producers could soon face a tougher permitting process as newly elected state officials take office and revamp regulations, the incoming speaker of the state’s House of Representatives said on Wednesday.
The change comes after voters in the fifth-biggest U.S. oil-producing state in November elected a wave of Democratic lawmakers who want restraints on fossil-fuel production. At the same time, however, state voters rejected a proposal that would have required at least 2,500 feet (762 meters) of separation between new wells and homes, schools and parks.
Newly elected officials want increased local control over the development of oil and gas activities, potentially creating new hurdles for some projects, KC Becker, House speaker-elect, told oil industry analysts and investors on a conference call hosted by Robert W. Baird & Co.
“Some things the industry is not going to like,” she said during the call. “I think they’re always nervous about anything that could slow down permitting. That could end up happening.”
This week, the state’s oil regulator revised drilling setbacks near school properties. The change requires a 1,000-foot (305 m) setback be measured from outdoor playgrounds and athletic fields rather than from buildings.
Colorado’s oil output is nearing half a million barrels per day, according to the latest data from the U.S. Energy Information Administration.
Newly elected state officials have outlined plans to diversify its energy mix and environmental groups have pledged to bring tougher regulations to the oil industry.
Colorado Governor-elect Jared Polis, a Democrat, has said he wants all the electricity on the state’s grid to come from renewable energy by 2040.
Meanwhile, Colorado Rising, a group that pushed the failed November setback initiative, has formed an exploratory committee to begin looking at a 2020 ballot initiative to “address the dangers of oil and gas extraction,” the group said in a release last week.
Oil producers with operations in Colorado, including Anadarko Petroleum Corp and Noble Energy Inc, contributed hundreds of thousands of dollars to efforts to thwart the 2018 setback measure.
Anadarko said modifying the setback rule “was a meaningful step forward”, and Noble referred questions to the Colorado Oil and Gas Association, which said it was “proud of what has been accomplished” from meetings with school districts and environmental groups to develop the revised setback.
Reporting by Liz Hampton in Houston; Editing by Matthew Lewis and Diane Craft