Garfield County to further study economic impacts of SB181 regulations
Garfield County commissioners want to get a better sense of the local economic impacts of the state’s new oil and gas regulations that came as a result of the 2019 passage of Senate Bill 181.
Commissioners on Monday unanimously agreed to spend $65,000 from the county’s oil and gas mitigation fund on a study to assess the short- and long-term impacts.
The initial expense will go to fund a one-year study of impacts ranging from job losses and impacts to industry support business to losses in tax revenues for local government entities, including school districts.
Commissioner Tom Jankovsky said he wants it to be an ongoing project for future years, as well.
“I would like to roll into this (a provision) for it to be renewed each year,” he said during the Monday Board of County Commissioners meeting. “I’d like to have a good idea of the impact over at least four years.”
The county’s oil and gas liaison, Kirby Wynn, and Community Development Department staff will seek bids from economic consultants to do the study.
The work is similar to some initial studies done as part of a multi-county effort during the Colorado Oil and Gas Conservation (COGCC) Commission and Air Quality Control Commission’s SB181 rulemaking process last year.
The commissioners are now looking to localize that impact analysis to Garfield County.
The sweeping legislation, signed into law by Gov. Jared Polis in the first legislative session after he took office, changed the mission of the COGCC from fostering to regulating the development of oil and gas in the state.
A lengthy rulemaking process resulted in wide-ranging new regulations, including a 2,000-foot setback for oil and gas well sites from schools, homes and other occupied buildings, and more provisions for local control of the industry. New statewide air quality regulations were also approved.
Elected officials from Garfield and other energy producing counties in the state have been highly critical of the new rules, while local activist groups objecting to the proximity of oil and gas operations in populated areas have applauded the changes.
In a draft summary of proposed study discussed at a Feb. 2 commissioner’s work session, Wynn noted that, before the regulations were put in place, Garfield County is host to more than 11,000 wells producing over 1.3 billion cubic feet of natural gas per day.
“These wells could continue to generate significant tax and other revenue and employment for the region if investment continues to drill new wells and maintain existing infrastructure to offset naturally occurring production declines from older wells,” Wynn wrote.
However, the recent rulemakings by the COGCC and the Colorado Air Quality Control Commission (AQCC) “impose significantly increased regulatory compliance costs that could serve to deter oil and gas investment in Garfield County and the greater Piceance Basin area.”
As part of its involvement in the rulemaking process over the past two years, Garfield County was joined by several other Western Slope counties in contracting with economists to calculate estimated compliance costs and related economic impacts of the proposed new regulations.
“Modeled scenarios predicted reduced oil and gas production and negative impacts to the local economy, jobs and tax revenues when investment in new wells and infrastructure are hindered and if marginal wells become uneconomic and are shut in due to untenable regulatory cost burdens,” Wynn wrote in the Feb. 2 report.
Commissioners at the time requested further tracking of those costs to Garfield County specifically.
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