Yesterday we discussed recent developments in Colorado by which local governments are beginning enact bans on hydraulic fracturing activities, with similar activities occurring in individual towns in Pennsylvania and Ohio.  In contrast, another Colorado town (Erie, a town of about 20,000 people that is roughly equidistant from Denver and Boulder) has taken a somewhat novel approach to addressing local concerns as to drilling operations that allows drilling to proceed within certain operational parameters.

Under Colorado law, the state Oil & Gas Conservation Commission sets the terms and conditions for drilling permits.  But local units of government can impose conditions over and above what the Commission requires, although this is traditionally done on an individual rather than global basis.  On August 28, 2012, the Erie Board of Trustees approved Memoranda of Understanding with two large shale well operating companies in which the companies “agreed to address the Town’s concerns regarding public health and safety impacts.”  The MOUs are unique in that they require the companies to implement safety and operational best management practices (BMPs) that will ultimately be incorporated into their state drilling permits as enforceable permit conditions.  The MOUs can be found here, along with a handy summary of the BMPs:

As part of the conditions of the MOUs, operators shall be required to:

  1. Maximize equipment and wellhead setbacks from occupied buildings and residences to the extent feasible and practicable, as determined by (Operator).
  2. Prior to commencement of any new drilling or completion operations, provide notification to landowners within one-half (1/2) mile of the planned location, as that location is reflected on (Operator’s) Form 2A filed with the COGCC (“Oil and Gas Location”).
  3. Prior to commencement of any new drilling or completion operations, provide to an Erie designated staff member the following for the Oil and Gas Location for informational purposes only, which (Operator) may revise from time to time during operations:
    1. a summary of planned operations, including identified access points and operational timeline, for posting to a local community information web-page;
    2. a site plan for site preparation, mobilization and demobilization;
    3. a plan for interim reclamation and revegetation of the site and final reclamation of the site;
    4. a plan for noise, light and dust mitigation, to the extent feasible and where applicable;
    5. a traffic management plan; and
    6. updates of this information if any plans change during operations.
  4. Utilize steel-rim berms around tanks and separators instead of sand or soil berms, unless requested otherwise by surface owner or because of operational reasons.
  5. Utilize closed-loop systems for drilling and completion operations to minimize the need for earthen pits.
  6. Utilize multistage pressure separation in conjunction with a vapor recovery unit (VRU) for new wells drilled. (Operator) may remove the VRU system at such time (Operator) determines that the VRU system is no longer necessary due to reduced emission recoveries and/or efficiencies, but no earlier than one (1) year after the new well is drilled.