LOGIC comments 14Feb2020

Larimer County Commissioners

CC: Matt Lafferty, Leslie Ellis, Tom Gonzales

200 W. Oak Street Ft. Collins, CO 80521

February 2020

RE: Larimer County’s Second Draft of its “Oil And Gas Facilities” Proposed Regulations

Dear Commissioners Johnson, Donnelly and Kefalas, and Mr. Lafferty, Mr. Gonzales, and Ms. Ellis,

The League of Oil and Gas Impacted Coloradans (LOGIC) and groups aligned under the Larimer Alliance for Health, Safety and the Environment (Larimer Alliance) appreciates the opportunity to submit the following comments regarding Larimer County’s second draft of its regulations for Oil and Gas Facilities.

LOGIC and the Larimer Alliance submitted extensive comments on the original draft of these regulations. While we appreciate that County staff has made some attempt to incorporate some of these comments into this second draft, it is still woefully inadequate. The second draft fails to protect public health and safety, the environment, and wildlife resources. It fails to comply with SB181’s mandates and standards, and it leaves Larimer County’s residents vulnerable to adverse impacts from the oil and gas industry.

SB181 made it abundantly clear that local governments have the authority to deny applications that adversely impact public health and safety. Larimer County can enact any regulation that is designed to protect public health and safety, yet this draft is riddled with loopholes and weak language designed to let oil and gas development take priority over people.

This draft fails to take advantage of the County’s authority to deny applications. We understand that the County believes that denying an application would leave it vulnerable to a lawsuit from industry applicants. However, LOGIC has already submitted a letter to Larimer County outlining the legal authority to deny applications without fear of litigation. Takings lawsuits are extremely rare, and almost never successful. Even after the state of New York banned fracking entirely, there were no successful takings claims brought against the state. We strongly encourage the County to re-read our letter on takings, and embrace its denial authority to protect its residents.

Compliance with the Act is crucial. SB19-181 removed the economically viable and technically feasible language from the Act. The current draft of the Larimer County regulations is still reliant on the pre-181 paradigm, and as such would likely not have any meaningful impact. SB181 allows local governments to regulate above and beyond the state floor. The way these regulations are currently drafted, they do not rise above that floor. The second draft includes some variation on “when possible,” “when available,” or “if feasible” on nearly a dozen occasions. This language is unacceptable, and inconsistent with SB181, and must be stricken.

Even worse, County staff has made it clear that the County has no intention of actually enacting setbacks that could actually protect residents. The health impact study released by CDPHE makes it clear that living within 2,000’ of oil and gas facilities is hazardous to human health. Other studies have shown adverse health impacts at even greater distances.

There are numerous other issues with this draft. It fails to provide notice to residents of development near their homes or schools, it fails to establish a public process for leasing county-owned minerals or development on open spaces, and lacks any meaningful public accountability mechanisms.

LOGIC and the Larimer Alliance submit the following redline suggestions to address issues with the purpose and intent sections, the authority to deny applications, and health and safety-based setbacks. We have also gone through the entire draft rules and removed every example of the “where possible” and “technically feasible” language and replaced it with more protective language where appropriate.

We are deeply disappointed that the County is not taking the recommendations of its residents seriously. We respectfully request that you reassess the comments submitted on the previous draft and adopt the reasonable suggestions provided by the community.

17.1.A - INTENT

Issue: Public Health, Safety, and Welfare, the Environment, and Wildlife Resources (PHSWEW) are not properly prioritized.

Suggested Redline:

The intent of this section of the Land Use Code is to protect public health, safety, and general welfare, the environment, and wildlife resources, protect private property rights, and minimize adverse impacts, by

establishing a regulatory framework for new oil and gas facilities (O&GFs), including recompletions to be located in the unincorporated areas of Larimer County. in a manner that protects the public health, safety and general welfare, protects private property rights, protects environment and wildlife, and minimizes adverse impacts. Rationale: This simple change reorders the intent section of the draft regulations to reflect the SB19-181 mandate.

17.1.C - PURPOSE

Issue: PHSWEW is not properly prioritized. Suggested Redline:

Purpose: These regulations are necessary to: 1. Promote and protect the public health, safety and welfare, and protect the environment and wildlife by avoiding and minimizing the adverse impacts of O&GFs. 2. Incorporate the power to deny oil applications, for O&GFs where necessary to protect public health safety, and welfare, the environment, and wildlife resources as granted by the State of Colorado in the Colorado Oil and Gas Act into these Larimer County Land Use Code Regulations. 1. 3. Ensure a comprehensive land use process and transparent public process for the development of new O&GFs, including recompletions, in the unincorporated areas of the County. 2. 4. Provide for the managed development, installation, maintenance, modification, reclamation and removal of O&GFs. without unreasonably discriminating against oil and gas developers and operators, or mineral interest owners. 3. 5. Minimize to the maximum extent possible the nuisance effects of O&GFs through the application of best available techniques and technologies. 4. Promote and protect the public health, safety and welfare, and protect the environment and wildlife by minimizing the adverse impacts of O&GFs. 5. 6. Maximize protection of natural and cultural resources and public facilities. 6. 7. Strategically locate O&GFs to locate where adverse impacts from such operations can be avoided. 7. 9. Minimize and mitigate the extent and severity of adverse impacts that cannot be avoided. 8. 10. Confirm the financial, indemnification and insurance capacities of the oil and gas developer/operator to ensure timely and effective

construction, production, removal and reclamation of O&GFs and infrastructure. Rationale for Suggested Redline: The second draft of these regulations are not aligned with current state law. SB19-181 amended the Colorado Oil and Gas Act to clearly prioritize protection of PHSWEW over oil and gas development. It also changed the definition of waste to exclude the non-production of oil and gas to PHSWEW. The proposed redline above moves the PHSWEW concept to the top of the list, and adds the word protect. This change is necessary to reflect the new paradigm at the state.

This suggested redline also adds the concept of denying applications where necessary to protect PHSWEW to the purpose section. This addition does not require the denial of any specific applications at this point, it simply acknowledges the fact that the state of Colorado has granted local governments the authority to deny applications were necessary to protect PHSWEW. Adding this concept to the purpose section is necessary to lay the framework for more specific regulations later in the Code.

17.2.B COUNTY REVIEW (DENIAL)

Issue: The current draft does not contemplate the ability to deny applications that would adversely impact PHSWEW. Proposed Redline:

17.2. – Review Procedures and Required Permits

B. County Review Process:

1. All new O&GFs, including recompletions, in the

unincorporated portions of Larimer County shall require approval of a Special Review application for the proposed facility as set forth in Section 4.5 of this Code. In addition to the requirements and review procedure laid out in Section 4.5 of this Code, the following review criteria will apply specifically to all O&G facilities applications:

a. If an applicant cannot demonstrate an ability to

comply with all relevant requirements in this code, the Commissioners will deny the application. b. If the applicant cannot mitigate the impacts to public

health, safety, and general welfare, the environment, and wildlife as required by this code, the Commissioners will deny the application.

2. Application and submittal requirements for O&GFs are specified in the following Community Development Department application handouts:

a. Sketch Plan Review Application and Submittal Requirements for Oil and Gas Facilities.

b. Neighborhood Meeting Submittal Requirements and Guidelines for Oil and Gas Facilities.

c. Special Review Application and Submittal Requirements for Oil and Gas Facilities Rationale for Suggested Redline: The ability to deny a permit is an absolutely necessary tool for a local government to protect PHSWEW, and Larimer County has the unambiguous authority to deny applications that are not protective of PHSWEW. However, Larimer County has expressed concerns about exercising this authority based on fear of running afoul of regulatory takings laws. In the most basic sense, a “regulatory taking” is when a regulation destroys the value of private property.

Larimer County’s fear is unwarranted in this case. Baked into the law on regulatory takings is a broad exception for regulations with a legitimate public purpose, such as protecting public health and safety, or the environment. SB19- 181 made the ability to deny an application even more clear by changing the definition of waste to expressly exclude the non-production of oil and gas resources if necessary to protect PHSWEW. That essentially means that as long as the County is denying an application to protect PHSWEW, then it is not a taking.

The County must establish clear denial criteria in order to protect their residents from adverse impacts from oil and gas development. SB19-181 did not say that the state and local governments should protect PHSWEW when convenient for operators. It clearly states that PHSWEW is the priority, and production is secondary. This current draft is inconsistent with this state law.

17.3.B - SETBACKS

Issue: The second draft of the oil and gas regulations DO include setback from homes, high occupancy buildings (like schools, nursing homes, etc), and water bodies.Unfortunately, they propose a set of tiered setback distances that are not adequately protective, and do not account for health impact data from the State and other reliable sources. They also allow for variances and exceptions that further reduce protections. Proposed Redline:

B. Setbacks:

1. The minimum required setbacks for buildings and structures set forth in the applicable zoning district shall apply to the proposed O&GF. 2. In addition to the setbacks in paragraph 3 below, the setbacks set forth in Section 4.9 of this Code shall apply to proposed O&GFs to minimize their impacts on public health, safety, welfare, the environment, and agricultural operations. 3. To achieve the intent and purpose of this Section 17, the following minimum setbacks for O&GFs shall be required, unless more restrictive setbacks are required by the rules of the COGCC:

a. 1,000-2,000-foot setback from a residential building or platted residential lot b. 2,000-foot setback from a high occupancy building including schools, registered day cares, nursing homes. c. 5002,000-foot setback from a water body or designated outside activity area 4. To achieve the objectives of Section 17.1.C., the Board of County Commissioners may, on a case by case basis, require an increase to these minimum setbacks. 5. The Board of County Commissioners may allow a reduction of the minimum setbacks when it has been determined that the applicant has adequately demonstrated that the setbacks prohibit access to the mineral interests being sought, and the reduced setbacks will achieve to the extent practicable the objectives of this code. Rationale for Proposed Redline: According to the most recent health impact data from the Colorado Department of Public Health and the Environment (CDPHE), living within 2,000 feet of an oil and gas facility is hazardous to our health. At the very least, Larimer County’s setback for all residences/residential structures should be 2,000 feet to address this fact. There is no point in adopting setbacks that do not accomplish the basic goals of the regulations.

17.3.C - AIR QUALITY

3. Reduced Emission Completions shall be used for all completions and well workovers following hydraulic fracturing. Such completions shall include the use of Best Management Practices including, when available, the following unless an equal or better system exists:

4. O&GFs shall be equipped with electric-powered engines for motors, compressors, drilling and production equipment, and pumping systems unless no adequate electricity source is available or it is technically infeasible.

Other Air Quality Recommendations

● Larimer County should strongly consider enacting 24/7 monitoring requirements for emissions and air quality data, with regular reporting periods to protect public health and safety.

● Larimer County should develop a fee and penalty framework for operators violating air quality standards

17.3.E - ODORS

3. The Odor Mitigation Plan shall include control strategic which shall be implemented upon receipt of an odor complaint(s) or as required by the County. These Odor control strategies may shall include the following, along with any other site-specific requirements recommended by staff to mitigate impacts:

17.3.F - WATER QUALITY AND WATER BODIES

Issue: The current draft is not adequately protective of surface and groundwater resources. In addition to the too-low setbacks discussed above, the current draft also allows development within the FEMA 100-year floodplain and does not require public disclosure of water quality test results. Proposed Redline:

1. A Water Quality Report/Plan shall be submitted with all O&GF applications. The report/plan shall demonstrate how the development and operations of the facility will avoid impacts to surface and ground waters in Larimer County, and demonstrate compliance with and implementation of standards in Sections 17.3.D. and 8.12 of this Code. 2. Baseline and subsequent water source tests, as typically required by and submitted to the COGCC and CDPHE, shall be provided to the LCDHE and the LGD for the life of the facility and any post-closure assessments, if approved by the owner(s)of the water well. It is recommended that the operator also post these reports online for public/access transparency. For greater transparency, the operator will make these reports available online for public access. 3. The application shall provide documentation indicating how the COGCC water quality protection standards are being implemented. 4. Locating O&GFs within a Federal Emergency Management Agency (FEMA) designated 100-year floodplain shall not be allowed. unless no

other location is feasible, and all other appropriate permissions are obtained. 5. New wastewater injection wells shall not be allowed. 6. The requirements of this Section 17.4.D shall not prevent discharges reviewed and permitted by the CDPHE Water Quality Control Division, the EPA, and the Army Corps of Engineers. Rationale for Proposed Redline: With the adoption of the increased 2,000-foot setback for surface water resources, the water quality and water resources section of the draft regulations is much stronger, and requires significantly less revision. The one significant change proposed here is that no exceptions be made for O&G facilities in floodplains. This is based, once again, on the concepts enshrined in SB19-181 that require prioritization of PHSWEW over extraction of oil and gas resources. The lack of acceptable locations outside the floodplain is not a good enough reason to allow development inside the floodplain. This is the prime case of denial of an application. If no protective locations are possible, then the County must deny the application, not grant exceptions to rules designed to protect PHSWEW.

17.3.L - RECYCLE, REUSE, and DISPOSAL OF FLUIDS

2. Drilling, completion flowback, and produced fluids shall be recycled or reused whenever technically feasible. 4. Produced water shall be recycled or reused or shall be transported by pipeline. unless easements are not available. If easements for pipelines cannot be obtained, applicant must prove to County staff and Commissioners that an alternative transportation plan will not adversely impact the health and safety of Larimer County residents and the environment.

17.3.O WELL LIQUIDS UNLOADING

1. Best management practices, including artificial lift, automated plunger lifts and at least 98% emission reductions when utilizing combustion to control venting shall be employed at all facilities. unless technically infeasible

Drilling in Open Spaces

Issue: Nothing in the oil and gas regulations specifically protects open spaces from oil and gas development. Proposed Redlines:

17.1.C.5 - Maximize protection of natural and cultural resources, and public facilities, and Larimer County Open Spaces. 17.2.B.3.d - 500-foot setback from Larimer County Open Spaces Other Proposed Suggestions:

Larimer County must amend the land use regulations to prevent oil and gas development in open spaces. Rationale for Proposed Redlines: Preserving the rural character of open space, and unincorporated Larimer County in general is a concept enshrined throughout the Larimer County Land Use Code. Oil and gas development is not consistent with that concept. Therefore, the County must reconsider the allowed activities within its open spaces. Preserving the open spaces themselves is a good first step, and protecting them with a 500-foot setback is necessary to ensure that oil and gas development does not encroach upon these important resources.

PUBLIC PROCESS FOR LEASING COUNTY-OWNED MINERALS

Issue: Decisions around the management of county-owned minerals must be made in view of the public, the same as any other major decision. Currently, decisions around leasing these minerals are not made during public meetings, but rather at an administrative matter meeting. Suggest Amendment: (somewhere in the county code) xx.xx.xThe County shall not sell, lease, or dispose of county-owned buildings or real property in use for public purposes without first obtaining the approval of a majority of the commissioners. Any real property acquired or maintained by the County as open space is deemed to be in use for a public purpose.