® KevsTONE poLicy CENTER Apeil 15, 2015 ‘The Honorable John Hickenlooper ‘The Honorable Bill Cadman Governor, State of Colorado President, Colorado Senate 136 State Capitol Colorado State Capitol Denver, CO 80203 200 E. Colfax Denver, CO 80203 ‘The Honorable Dickey Lee Hullinghorst Speaker, Colorado House of Representatives Colorado State Capitol 200 E. Colfax Denver, CO 80203 Dear Governor Hickenlooper, President Cadman, and Speaker Hullinghorst: Tam writing to suggest « potential path forward on oil and gas development issues following the recently completed Colorado Oill and Gas Task Force (Task Force), specifically the creation of an ongoing committee to oversee issues and continue the effort to artive at consensus solutions. Keystone Policy Center was proud to facilitate the Task Force. The discussions were difficult given the intensity of emotion, the importance of the issues, and the seemingly intractable legal and policy disagreements regarding state and local authorities. Nevertheless, everyone operated in good faith and kept an open mind to options and open ears to the views of each other and members of the public who took the time to comment. Although the Task Force agreed on a number of proposals aimed at reducing potential conflicts, there were clearly areas on which they were unable to reach the two-thirds support required for a proposal to pass. The crux of the difficulty that still remains isthe relationship between state and Jocal authorities on aspects of ol and gas permitting, development and control. All sides understand and agree that there are clearly aspects that are under the authority of local governments to contzol and mitigate, and others that are clearly under the authority of the state to regulate and permit. ‘Where much of the conflict arises isin the middle ground — the grey areas where an aspect of oil and gas development involves elements that are arguably within the authority of both local {governments and the state. A number of the recommendations that did not pass involved these issues. Prominent among them was siting — that is, where oil and gas wells, and their attendant production facilites, are placed on the land. This is both a land use issue of local governments through their zoning, ordinances, permits, and agreements, as well as a state issue as it involves access to mineral deposits and technical deillng matters (the so-called “downhole” aspects). Another grey area concerns whether local governments can require restrictions of other conditions ‘within their authorities that ate stricter than state rules on specific aspects of dsiling and production, ‘The options presented to the Task Force to resolve these, and are sil facing decision makers and the public following the release of the recommendations, ate: © Having the courts sort this out through lawsuits; ‘© Passing legislation clearly establishing in law that the authority to decide these grey arcas rests ‘entirely within either the local governments or the state; Keystone Headquarters | Denver | Washington De 970/516-5800 1628 85, John Road | 1800 Gienarm | 3730 Rhode sland ave, NW | Keystone.org, Keystone, CO B0435 Suite 503 | Sut S09 Denver, CO 80202 | ‘Washington DC 20036© Passing ballot proposals that either clearly establish who makes these calls, or establishes specific conditions or requirements regarding issues like siting and stricter rules; © Leaving the areas grey (a mix of local and state authority) but requiring an intermediate step prior to litigation to attempt mediation of any disputes and arrive at mutually acceptable resolutions that all sides will abide by and agree not to contest; or Requiring oil and gas operators provide advance notice to local governments of theit interest in seeking drilling permits and working out siting and regulation issues before the permit processes are initiated, ‘The last two of these are encompassed in some form in a couple of the recommendations that were adopted by the Task Force. The others are about creating “winners and losers” that likely will esult in perpetuating the ongoing battles. Underlying much of what the Task Force discussed was enthusiast for creating opportunities to build better relationships between oil and ges companies and the communities they seek to operate within. ‘The Task Force was a start, but the constructive dialogue needs to continue. The Task Force made sgzeat strides working together, and we believe the best chance for progress lies in building on this foundation in a collaborative manner. But it should not end here. That's why Keystone Policy Center recommends the cteation of a statewide entity that would provide a forum for the oil and gas, industry, local governments, landowners, agricultural interests, housing developers, and the public to meet regularly. Its mission would be: © to prevent or minimize conflict associated with oil and gas development through positive and proactive communication and actions; * encourage responsible and balanced development of these resources; * oversee the effective implementation of the Task Force’s recommendations; * find ways to balance and harmonize state and local authorities; and © eventually suggest ways to carfy these issues, develop best practices or suggest processes that could be used to create consensus regarding potential resolutions of the grey area aspects. Such an entity would not attempt to resolve specific disputes necessarily. Rather it would continue the depth of understanding that we need to build upon and that the work of the Task Force will have the impact it intended and get to issues that were worth further consideration in the right forum, Sincerely, 772 Christine Scanlan President and CEO, Keystone Policy Center Keystone Policy Center ‘970/516-5800 keystone 7g