Frequently Asked Questions

  1. How important is oil and natural gas to Colorado’s economy?
  2. Is oil and natural gas development regulated? Who regulates the process?
  3. Is there a required distance between oil and natural gas developments and homes or schools?
  4. Why do we need fracking?
  5. Does fracking contaminate water?
  6. Does fracking pollute the air?
  7. What is a mineral owner?
  8. What are setbacks?
  9. How far is the distance for setbacks?
  10. Are setbacks effective?

Q: How important is oil and natural gas to Colorado’s economy?

A: The oil and natural gas industry provides over $25 billion dollars in revenue to Colorado’s economy—helping make Colorado the 5th fastest-growing economy in the United States. Weld County, Colorado—home to 85% of Colorado’s oil production—had the largest percentage increase in employment in the U.S. in 2013 (Source: U.S. Bureau of Labor Statistics; University of Colorado Boulder Leeds School of Business).

Check out our infographic to understand the full economic impact of oil and natural gas in Colorado.


Q: Is oil and natural gas development regulated? Who regulates the process?

A: Federal, state and local governments all have a part in regulating the development of oil and natural gas.

Federal
Despite the rumors, fracking and oil and natural gas are not exempt from major federal environmental laws such as the Clean Air Act, Clean Air Act, Safe Drinking Water Act, National Environmental Policy Act (NEPA), Endangered Species Act (ESA) or the Occupational Safety and Health Act. In 2012, the Government Accountability Office (GAO) clarified in a report to Congress the key environmental and public health regulations that govern fracking and other steps in the development of oil and natural gas.

State
At the state level, the Colorado Oil and Gas Conservation Commission (COGCC) is charged with regulating Colorado’s oil and natural gas development. Mandatory groundwater monitoring programs, well-inspections, and strict well-structure rules are just a few examples of how the COGCC ensures oil and natural gas development remains safe throughout the entire process. Review and approval of permits, drilling locations, well integrity standards, waste water management and disposal and air emission oversight are also regulated at the state level.

The COGCC is one of the most transparent regulators in the country. Any Coloradan can check out statewide regulations on the COGCC website.

Local
Before drilling takes place, oil and natural gas companies are required to work with local governments and nearby residents to ensure community concerns are acknowledged and addressed up front whenever possible. Here are a few ways local governments participate in the process.

Locations: City councils and county commissions make local permitting and zoning decisions.

Representing Local Interests at State Level: A local government designee (LGD) can be selected to represent their specific interests directly to the Colorado Oil and Gas Conservation Commission (COGCC), the state agency tasked with regulating all aspects of oil and natural gas. LGDs serve as a liaison between the community and the COGCC to ensure their concerns are properly addressed at the state level.

Setting Rules for Production: Local governments can sign a Memorandum of Understanding (MOU), which is a legally binding agreement between operators and local governments that sets clear rules for energy development in their community.

Learn more about oil and natural gas regulations by checking out our infographic.


Q: Is there a required distance between oil and natural gas developments and homes or schools?

A: The Colorado Oil and Gas Conservation Commission (COGCC) regulates “setbacks” from homes, schools and other high occupancy buildings. Colorado was the first state in the Rockies to push its setback distance to 500 feet from a residence and 1,000 feet from high occupancy buildings, such as hospitals and schools.

In January 2013, the COGCC adopted these new setback rules and included additional rules requiring:

  1. Closed loop drilling systems that eliminate storage pits
  2. Liner standards to protect against spills
  3. Capture of gases to reduce odors and emissions
  4. Strict controls on the nuisance impacts of noise and dust

Learn more about the COGCC’s setback rules by visiting their website.


Q: Why do we need fracking?

A: Fracking first began in 1947, and up to 95 percent of new wells drilled today are fracked. Without fracking, the newfound energy abundance in America—and all of its benefits—would cease to exist.

Natural gas unlocked by from fracking is a clean and an abundant energy source that complements renewable energy on the days when the sun doesn’t shine or the wind doesn’t blow. Additionally, fracking has helped make the U.S. the number one oil and natural gas producer in the world, putting us on the path to energy independence.

From heating and cooling our homes, to getting us to the places we need to go, we rely on this domestic oil and natural gas to power the things we use every day. And as the balanced energy capital of the West, oil and natural gas combined with geothermal, hydro-electric, biofuels, solar and wind energy support a sustainable energy future right here in Colorado. Of all these fuels, natural gas has risen to become the second-largest energy fuel source in Colorado, and its use is quickly expanding across the country.


Q: Does fracking contaminate water?

A: Multiple studies have now found that fracking does not contaminate groundwater, including The Environmental Protection Agency (EPA), which confirmed that fracking doesn’t cause “widespread, systemic” water contamination.

Colorado has some of the nation’s strictest water regulations, which help make sure that our water is safe for all Coloradans.

What Makes Colorado’s Water Regulations Unique?

  1. Colorado state law requires each individual oil and natural gas well be encased in several separate layers of steel and cement to ensure fracking fluid does not penetrate past the wellbore into our drinking water sources.
  2. Colorado was the first state to require water sample testing before and after drilling to ensure our drinking water sources are protected.
  3. The Colorado Oil and Gas Conservation Commission (COGCC) requires the disclosure of fracking fluid’s contents on FracFocus.org, a publicly-accessible database.
  4. Colorado has some of the toughest setback regulations in the nation. Colorado was the first state in the Rockies to push its setback distance to 500 feet from a residence and 1,000 feet from high occupancy buildings, such as hospitals and schools.
  5. After drilling is finished, Colorado regulations require oil and natural gas producers to restore land to its pre-drilling condition through a process called reclamation.
  6. Colorado recently added more state inspectors and increased fines for violations by 1500%.

To learn more about Colorado’s water regulations, visit the Colorado Oil and Gas Conservation Commission (COGCC) website.


Q: Does fracking pollute the air?

A: Numerous federal, state and local laws regulate fracking to minimize its impact on the environment. Coupled with advancements in oil and natural gas technology, fracking is helping curb air pollution. Here’s how:

Clean-burning natural gas from fracking helped curb U.S. carbon emissions to 20-year lows in 2013.

In February 2014, Governor Hickenlooper announced groundbreaking standards for methane emissions—making Colorado’s air regulations the strictest in the nation.

For a full list of air regulations see here.

(Source: EIA; 2013; Colorado.gov, 2014)


Q: What is a mineral owner?

A: In Colorado, underground minerals may belong to the surface owner or a third party and developing those minerals is considered a private property right. Often, different parties own the surface and the subsurface, commonly referred to as severed or split estate lands. According to an Oklahoma University state-by-state study, more than 600,000 people have Colorado mineral rights.

Royalty payments are a percentage share of the production of oil and natural gas paid to the mineral owner. These payments are based on the value of the energy extracted and go into effect as soon as production begins. Periods of higher production will yield higher royalty payments than periods where production has slowed down.

Some Coloradans rely on income from oil and natural gas development to help sustain farming operations and mineral rights can be distributed through inheritances, which can split the mineral estate between heirs.

The National Association of Royalty Owners (NARO) released a report in June 2014 that found a ban on fracking in Boulder County, Colorado alone would cost taxpayers over $1 billion in compensation to mineral owners and those who receive royalties from energy development on their property.

To learn who owns the mineral rights under your land, consider contacting your local county clerk’s office to locate all the filed land records having to do with your property.


Q: What are setbacks?

A: A “setback” is the required distance between drilling rigs and homes, schools, and other buildings.


Q: How far is the distance for setbacks?

A: Colorado has some of the toughest setback regulations in the nation. Current regulations require oil and natural gas wells to be set back at least 500 feet from homes and 1,000 feet from high-occupancy buildings, such as schools or hospitals.


Q: Are setbacks effective?

A: Over the last seven years, Colorado has continuously improved the state’s oil and natural gas regulations so that they are some of the strictest regulations in the nation. Current setback distances keep the environment and communities surrounding oil and natural gas development sites safe, while fostering economic prosperity in Colorado. With setbacks at 500 and 1,000 feet, Colorado’s 600,000 mineral rights owners can still reap the valuable benefits of their oil and natural gas royalties.

Click here to learn more about about Colorado’s existing setbacks.

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