Amended state rules allowing oil and gas companies to seek a local variance to drill closer to occupied structures was put to work in Garfield County for the first time Monday.

County commissioners unanimously passed a proposal by Terra Energy Partners Rocky Mountain LLC to drill 21 new natural-gas wells on land about six miles south of Rifle. The new wells will expand an existing well pad, South Leverich, which rests about 640 feet away from Beaver Creek adjacent to County Road 317.

The proposal calls for adding 1.13 new acres onto South Leverich, eventually creating a 6.43-acre footprint.

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“I like the fact that this is on an existing well pad,” Commissioner Tom Jankovsky said. “I think it’s much better to put this on an existing well pad instead of moving it 2,000 feet away from residents.”

The need to pass a variance for oil and gas drilling stems back to Senate Bill 181. The 2019 bill made it so that drill sites in Colorado could not be within 2,000 feet of homes, schools, and other occupied structures.

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But, new state rules also allow oil and gas permit reviews at local levels. When SB-181 passed, the Colorado Oil and Gas Commission also adopted what’s called an Alternative Location Analysis. This analysis allows county and city governments to conduct a permit review on an operator intending to drill within the 2,000-foot setback rule.

Garfield County adopted these regulations in July 2021, requiring pre-application meetings, impact mitigation reviews, and speaking with residents/property owners who are within 2,000 feet of the proposed drill area.

According to Garfield County permitting specialist Amanda Petzold, there are four residential dwellings within 2,000 feet of the proposed site. All building unit owners have signed consent letters accepting the proposed location, she said.

The site also is within 2,640 feet of a surface water supply, Beaver Creek. But, Beaver Creek no longer feeds any use for public water use intake. 

“The proposed location is preferred because it is an expansion to an already existing location with existing infrastructure, and it minimizes new impacts,” Petzold said.

TEP planning manager Adam Tankersley said the proposed project will primarily use recycled produced water, with fresh water use being kept to a bare minimum.

He also said the project calls for the installation of two permanent pipelines — one for produced water, the other for natural gas.

Commission chair John Martin said he’s very pleased the project is tapping into produced water.

“That is a real hazard of trying to transport that up and down,” he said. “Hats off to the industry and also our other staff working with everybody to get that done.”

Tankersley said they still need to obtain drilling-permit approval from the state and federal governments. 

If state and federal permits are OK’d, he said construction activities are slated for May 2023, with drilling activities coming in December 2023.

The commission’s approval of the drill permit comes with 17 conditions. This includes having TEP submit drainage and grading plans and more. Before making the final vote, the commission asked that “no onsite employee housing will be permitted” be struck from the conditions. This gives TEP an opportunity to build temporary employee housing on site.

Speaking on all the new regulations put in place by Senate Bill 181, Commissioner Mike Samson said the work needed to get new drilling permits passed is “just mind-boggling.”

“We’re trying to make it the best we can,” he said. “I really hope people in this nation will realize that we need to be energy independent. We need natural gas, we need oil, we need coal, we need solar and wind, but this is a good step in the right direction.

“This is something that needed to be done.”

In addition to TEP, the Garfield County Commission is set to review another drilling application from CPX Piceance in December.