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ALERT: Most Commerce City facilities have reopened with restrictions, including modified hours. Most in-person services are available by appointment only. Visit c3gov.com/covid-19 for updates. Commerce City remains under the Safer at Home public health order. 

Oil & Gas Operations

Colorado is well-known for its natural resources and history of oil and gas exploration. Like other local governments, Commerce City strives to balance municipal growth and development with the needs of industry. The city's land development code and participation in the state's local government designee program offers a layered approach to protect the interests of the community and the rights of private developers. The city’s priorities regarding oil and gas development are to minimize impacts and maximize protections for the community. 

View the city's oil and gas news feed

See applications and activity for possible drilling sites in Commerce City


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Updating City Regulations

The city is working to update its comprehensive oil and gas regulations in the Land Development Code (LDC). This process allows the city to adopt revised regulations that are more reflective of recent regulatory trends and current best practices for the industry. 

The proposed regulations were drafted considering many different factors, including feedback from the public and other stakeholders, recent changes in state law and regulatory agencies, scientific studies, legislative actions taken by other jurisdictions, and extensive oil and gas Best Management Practices (BMPs) focused on protecting health, safety, welfare, quality of life, and the environment.

When initially presented the proposed regulations last fall, city council directed staff to seek more stakeholder feedback and further refine the regulations. To inform these revisions, city staff hosted meetings in early 2020 with regulatory and government agencies, industry representatives, advocacy groups, and the city’s Oil and Gas Focus Group. The city previous held two public open houses about the draft regulations in Oct. 2019.

Read more about this process and how the regulations were created

Notes: Minor amendments to the city's oil and gas regulations were approved by city council in November 2018 to clarify and reorganize the code (including grammatical revisions) in order to avoid potential conflict with state law.

Adoption Process

June 10 update: During discussion at the June 8 Study Session, City Council requested additional time to review and provide feedback on the proposed regulations. (Video from the study session is available at c3gov.com/video. Oil and Gas discussion runs from about 1:04:30 to 2:16:30 on the file).

Staff will then review council’s feedback, update the draft regulations as necessary, and finalize a draft ordinance to present for public hearings at the planning commission and city council. Dates for those meetings will be announced once a new schedule is determined.

  • May 29 - Public comment deadline (extended from April 10 due to COVID-19)
  • June 8 - Discussion at City Council Study Session
  • TBD - Planning Commission Public Hearing
  • TBD - City Council Public Hearing and First Reading of Ordinance 2266
  • TBD - City Council Second Reading/potential approval of Ordinance 2266

Virtual Town Hall

The city hosted a virtual town hall on May 7 to help residents learn more and ask questions about the regulations. Members of the public submitted written and live questions during the meeting, which was conducted online and by phone with about 60 attendees. Live Spanish interpretation was also offered.


*Note: questions/statements from the town hall were NOT entered in the record for the public comment period.

Documents for Review

The following documents include all proposed updates to the city's oil and gas regulations as of March 10, 2020. These documents are marked to show proposed changes to the existing regulations in the city's Land Development Code:

Important Note: If you reviewed the earlier draft of the regulations in fall 2019 (ordinance 2235), exhibits A, B, C and E have NOT changed. All revisions to the draft ordinance are contained within exhibits D, F, G, H and I. 

Public Comment Period - Spring 2020

The public comment period ran from March 10 through May 29. Members of the public submitted more than 200 written comments on the proposed regulations using an online form.

All public comments submitted online

Public comment letters received

Staff responses to public comments

If you missed the comment period or wish to offer additional comments, you are welcome to speak at one of the above listed public hearings about the regulations.  

 

Regulating Oil and Gas

In Colorado, oil and gas development is regulated by the Colorado Oil and Gas Conservation Commission (COGCC), a division of the Colorado Department of Natural Resources. COGCC manages all below-ground aspects of oil and gas drilling and conducts the state permitting process. Operators must obtain permits from both the COGCC and the city through separate processes before any new activity can begin. Learn more about the COGCC regulatory process

Oil and gas applications for proposed Commerce City sites

The city regulates surface-level oil and gas activities related to drilling within Commerce City limits. The Land Development Code (LDC) requires operators to obtain an oil and gas permit and execute an extraction agreement with the city for each individual well pad prior to operations beginning. The LDC also regulates plugging and abandonment of existing well sites in the city.

Related city documents:

 

Regional Operator Agreement with Extraction Oil & Gas

After negotiating additional protections in response to public comments, Commerce City approved a revised Regional Operator Agreement (ROA) with Extraction Oil & Gas, LLC on Sept. 18, 2019. The agreement, which was negotiated over 18 months, sets requirements for Extraction’s proposed well sites in the city, including Best Management Practices (BMPs) that address health, safety, quality of life and environmental concerns. 

Final Regional Operator Agreement - approved 9/18/19

The revised ROA requires Extraction to eliminate one of its proposed well pads in the city (reducing the number of sites to seven) and creates a path for another location to be moved further away from a planned neighborhood and school that are expected to be built in the coming years. The updated agreement also doubles the operator’s financial contribution for an air quality monitoring program, from about $1.4 million in the draft ROA to a projected $3 million in the final version. These changes and other clarifying language were included to address many of the primary concerns received in July 2019 during a 21-day public comment period about the draft ROA. 

The ROA does not approve any of Extraction’s proposed well pad sites or require the city to approve any specific locations. A series of other permitting processes must still occur before any new activity can begin, likely pushing the start of drilling to late 2020 or 2021. These processes include rezoning proposed pad sites, applying for city oil and gas permits and obtaining conditional use permits for pipelines, in addition to the state permitting process. 

Staff's monthly oil and gas update from the Sept. 16, 2019 city council meeting provides more background on the ROA process. 

ROA Public Comment Period - July 2019

The draft ROA was open for a 21-day public comment period in July 2019, allowing residents to submit feedback for consideration before the city decided whether to take official action. Staff reviewed all feedback received during the comment period and resumed negotiations to improve the ROA based on those comments before the agreement was finalized.

View all comments submitted during the ROA comment period

FAQ about the Regional Operator Agreement

Copies of the draft ROA were available for public review online and in person at the Commerce City Civic Center and both the Bison Ridge and Eagle Pointe recreation centers.

Other Public Comment Opportunities

The COGCC provides opportunities for public comment on state permit applications prior to approval.

All city permit applications and draft agreements will be available for public feedback prior to approval. The city also hosts public meetings and surveys to collect public comment, and the public is always welcome to comment during citizen communication at regular city council meetings.

Public comment opportunities on formal city processes include, but are not limited to, the following:

  • 21-day public comment period for any potential regional operator agreement
  • Neighborhood meeting about each proposed well pad site as part of the city oil and gas permit application process

Oil and Gas Focus Group

City Council passed a resolution in February 2019 creating a temporary oil and gas focus group to allow residents an opportunity to provide input to city staff on: proposed state legislation, proposed state administrative rulemaking, potential city regulations and new COGCC Form 2A applications. The nine-member focus group provided non-binding input to city staff on these topics over the course of five meetings.

Road Impact Fee

In August 2019, the city created a new road impact fee for new oil and gas development occurring in the city. Revenue from the fee will be used to help pay for future roadway improvements related to the impacts of truck traffic and other activity associated with well pad sites. The city held a public meeting to collect feedback about the fee in May 2019 prior to the fee being heard by the planning commission and city council (view council presentation here). Ordinance 2213 approving the fee was passed by city council on Aug. 5, 2019.

DRAFT Road impact fee study - June 10, 2019 

Stay Informed

Background

In the spring of 2018, interest in oil and gas development in the city began increasing significantly and a large number of new permit applications were submitted to the COGCC. This change sparked a citywide conversation among residents, city council and staff, and industry representatives.

Extraction Oil & Gas Proposed Activity

City staff hosted a public open house on Dec. 6, 2018 to provide more information about Extraction’s plans for development, explain actions the city is taking in the regulatory process and encourage resident feedback on oil and gas in the city. About 90 members of the public attended the meeting.

City informational boards - Dec. 2018 open house

Information from Extraction Oil & Gas – Dec. 2018 open house

After the open house, city staff continued to negotiate the terms of a regional operator agreement with Extraction. City Council was consulted on the progress of these conversations through executive sessions, which are held privately with only staff in order to avoid compromising the city’s negotiating position and allow council to receive legal advice.

Resources

Oil & Gas and Your Health (Information from the Colorado Department of Public Health and Environment)

Information on Hydraulic Fracturing

Hydraulic Fracturing FAQs

COGCC Complaints page