Fate of oil and gas drilling proposal near Aurora homes to be decided following hearing this week

Members of the Colorado Energy and Carbon Management Commission listened to public comments from opponents of a major oil and gas drilling plan on the state-owned Lowry Ranch property in Arapahoe County during a hearing on May 16, 2024. (Chase Woodruff/Colorado Newsline)

Colorado regulators this week could decide the fate of an oil and gas extraction plan on a large tract of state-owned land east of Aurora, in one of the highest-profile tests to date of the stricter drilling rules enacted under a 2019 health and safety law.

The Colorado Energy and Carbon Management Commission, a five-member panel that oversees oil and gas operations within the state, is weighing whether to approve a 32,000-acre “comprehensive area plan” that would streamline permitting for seven drilling locations proposed by Denver-based Civitas Resources, the state’s third-largest oil and gas company.

Most of the area in question consists of the sprawling Lowry Ranch property, a former U.S. Air Force missile launch site and gunnery range acquired by the Colorado State Land Board in the 1960s. Limited drilling in the area has taken place since the Land Board first issued a lease for oil and gas development on the property in 2012, but Civitas aims to fast-track the development of 156 new wells over the next six years through the approval of the CAP.

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The project is staunchly opposed by environmental groups and hundreds of nearby residents, who fear the impacts and risks of a plan that calls for drilling thousands of feet under the Aurora Reservoir and several southeast Aurora subdivisions. They’re also worried about the proximity of the Lowry Landfill Superfund Site, on the northwest corner of the project area. Civitas has agreed not to drill under the Superfund site at the Environmental Protection Agency’s request.

Citing that and other commitments and concessions made by Civitas since the company submitted its application in 2022, ECMC staff last month recommended the CAP’s approval. The State Land Board hasn’t taken a formal position on the CAP but says the additional drilling under the terms of its lease could raise hundreds of millions of dollars for Colorado schools.

A final decision will be made by ECMC commissioners following a split two-day hearing on the plan this week. The hearing is scheduled to continue Friday.

Jamie Jost, an attorney representing Civitas, touted the company’s extensive planning and outreach efforts and called Lowry Ranch a “prime location for oil and gas development.”

“This comprehensive project has been over three and a half years in the making, pending with the commission for almost two years, and if approved, will provide significant benefits to the state of Colorado, local governments, our local schools and communities and our citizens,” Jost said during a hearing Tuesday.

Save the Aurora Reservoir, a community activist group formed to oppose the project, was granted party status in the hearing and is urging commissioners to reject the CAP application.

“What we’ve seen is people from all walks of life and various levels of oil and gas knowledge looking at the CAP application and realizing something isn’t right about it,” said Mike Foote, an environmental attorney and former state lawmaker representing STAR before the commission. “It’s not protective. The commission’s mission is to protect public health, safety, welfare, the environment and wildlife, and this CAP application just doesn’t do that.”

Mission change

Hundreds of STAR members and other residents of southeast Aurora crowded into an event space at the Arapahoe County Fairgrounds in May for a community meeting on the CAP, the first of its kind held by the energy commission since a sweeping overhaul of its permitting procedures four years ago. The three-hour meeting offered live Spanish translation services and a child care center for parents. Tables in the rear offered refreshments and an assortment of allergy-friendly snacks.

“Welcome to our first Rule 511 hearing,” said Jeff Robbins, the ECMC’s chair, taking the stage with his fellow commissioners and the agency’s senior staff. “We’ve never had one of these before, so we’re excited.”

Procedurally, at least, the event represented a quantum leap for an agency once bitterly resented by environmental groups and residents in Colorado communities impacted by oil and gas production. Under its former name, the Colorado Oil and Gas Conservation Commission, the agency became synonymous with state laws that critics charged were bent heavily in the industry’s favor, like a statute declaring that its “mission” was to “foster,” rather than regulate, oil and gas development.

As Colorado’s 2010s oil and gas boom increasingly brought drilling into conflict with fast-growing residential areas in north metro Denver and Weld County, the COGCC had limited authority — and often showed little willingness — to halt or restrict industry operations. A handful of Denver-based independent drillers, including Crestone Peak Resources and Extraction Oil and Gas, became especially notorious for pushing the envelope with projects that brought heavy-industrial fracking pads within hundreds of feet of homes in densely-populated Front Range subdivisions.

The tide eventually turned in 2019 with Colorado Democrats’ passage of Senate Bill 19-181, a sweeping reform package that included a direction to “regulate” oil and gas development to protect public health, safety and the environment. The COGCC spent much of the next three years enacting a top-to-bottom rewrite of its permitting, inspection and enforcement rules, including a new 2,000-foot setback requirement between new drilling sites and most occupied buildings. SB-181 also gave local governments power to regulate drilling within their borders for the first time.

More legislative reforms followed, and the agency was rechristened as the Energy and Carbon Management Commission last year, formalizing an expanded role overseeing industries like geothermal energy and carbon capture. Still, the bulk of the ECMC’s responsibilities involve oversight over the state’s 47,000 active oil and gas wells and an extraction industry that state officials — much to the dismay of Colorado climate activists — expect to continue to grow through at least 2030.

None of the drilling sites proposed in the Lowry Ranch CAP would be nearer than 3,000 feet from the nearest subdivision, but the plan’s opponents say it’s still far too close to neighborhoods, schools, recreation areas and environmentally hazardous sites like the Lowry Landfill. They worry about increased noise, truck traffic, air pollution and wildfire risk. Among the hundreds in attendance at the May 16 meeting, a show of hands at the request of a STAR member showed near-unanimous opposition to the project among attendees.

Ahead of this week’s hearing, more than 30 environmental groups urged Gov. Jared Polis to speak out against the plan.

“Please ask your agency to abide by Colorado’s commitments to environmental justice and protecting public health and safety by rejecting Civitas’ application for the CAP,” the groups’ letter to Polis said. “Both the spirit and the letter of the law enacted in SB-181 were meant to protect Coloradans from just such dangerous oil and gas extraction proposals.”

‘Latin for community’

In the years since SB-181’s passage, Colorado’s oil and gas industry has undergone a dramatic transformation of its own, most notably through a wave of mergers and acquisitions that has concentrated over 90% of the state’s production in the hands of just three companies: Chevron, Occidental and Civitas.

Civitas was formed in 2021 through a series of mergers between Colorado operators, including Crestone and Extraction. Its new corporate identity — “Latin for community,” a company website says — has been accompanied by a charm offensive. Civitas calls itself Colorado’s “first carbon-neutral energy producer,” a claim ridiculed by environmentalists . As residents gathered at the May 16 ECMC meeting at the Arapahoe County Fairgrounds, a rodeo building nearby bore a pristine new white banner: “Civitas Arena.”

Jost touted the company’s outreach during the two-year CAP application process, which led to moving or consolidating some of the drilling locations proposed by the plan, among other revisions.

“The input was hearty, thoughtful, discerning and even challenging at times,” she said. “The collaboration and coordination process with stakeholders is a critical part of the Lowry Ranch CAP’s development and evolution. Civitas takes community outreach and feedback seriously.”

But Jost called STAR an “activist group” that wants to “stop oil and gas development in the state of Colorado.” Civitas moved during Tuesday’s hearing to deny the group and 12 of its members “affected person” status in the proceedings, which would have stripped STAR of the ability to present evidence and interview witnesses during the hearing. Commissioners voted unanimously to grant affected person status to the group.

‘There wasn’t much out there’

After more than a decade of conflicts between operators and neighbors in communities like Erie and Commerce City to the north, the Lowry Ranch project represents a flanking maneuver of sorts by the industry; its 156 new wells would be the region’s southernmost large-scale extraction project to date, as drilling skirts around the eastern edge of the Denver metro area.

The State Land Board’s lease for drilling at Lowry Ranch dates to 2011 — a lifetime ago in Colorado oil and gas policy, and in the recent history of the fast-growing Denver metro area.

“With this being such a large effort, was there any specific outreach to neighboring communities or leaders, or the neighboring public in any way?” ECMC Commissioner Brett Ackerman asked a representative of the State Land Board during Tuesday’s hearing.

“From what I understand, there wasn’t much out there at the time,” said Christel Koranda, the board’s minerals director. “There was not a neighboring community. I think that was built after our leasing process, and so I believe there wasn’t anyone to contact.”

The Lowry Ranch proposal marks just the fourth time an operator has sought approval for a CAP since the agency established the process during its SB-181 rules overhaul, aiming to “facilitate evaluating and addressing cumulative impacts from oil and gas development in a broad geographic area.” All three previous CAPs have been approved.

If the Lowry Ranch CAP is approved, Civitas will still be required to seek ECMC approval for each proposed drilling location in the plan through a process known as an “oil and gas development plan,” or OGDP. But Foote, while arguing for STAR’s full participation in the hearing, said the CAP process serves to “grease the skids” for subsequent permit approvals.

“That’s part of the reason why the operator would seek a CAP, as opposed to doing eight or nine separate OGDPs,” Foote said during the hearing. “Once the CAP is approved, it’s very likely the OGDPs are going to be approved.”

But ECMC commissioner Mike Cross said that’s not necessarily the case.

“I do take issue with that, because we do have to look at each application separately,” Cross said. “It’s important to make sure that the public is aware that we are not simply saying, ‘Well, they’ve passed their CAP, so therefore we’re going to pass the OGDP.’”

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