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 have been to minimize impacts and maximize protections for the community while respecting private property rights. 

Updating City Regulations

The city is currently working to update its comprehensive oil and gas regulations in the Land Development Code (LDC). This process is separate from the recently completed Regional Operator Agreement (ROA) with Extraction Oil & Gas, LLC, which applies only to sites proposed by that operator (see below for more on the ROA). Revising the LDC helps the city adopt revised regulations that are more reflective of recent regulatory trends and current best practices for the industry.

While negotiating the ROA was a different process, the extensive work that went into creating it helped set the stage for the city’s updated regulations. Many of the Best Management Practices (BMPs) and other requirements in the ROA offer health, safety, quality of life and environmental protections that go beyond existing state regulations. These BMPs are a major component of the revised city regulations, along with feedback received during public open houses and stakeholder meetings, the city's expanded authority from  state legislation (Senate Bill 19-181) signed in April and recent actions taken by other jurisdictions. 

Minor amendments to the city's oil and gas regulations were previously approved by city council in November 2018. Those changes were limited to clarifying and reorganizing the code (including grammatical revisions) to avoid potential conflict with state law.

Adoption Process

The draft regulations are scheduled to go before the planning commission on Wednesday, Oct. 30 and then city council for a first reading on Monday, Nov. 4. The public will be able to comment on the regulations during public hearings at both meetings. If the updates pass on first reading, the ordinances are scheduled to go back to council for a second reading, and potentially final adoption, on November 18.

Draft Regulations for Review

  • Commerce City Oil and Gas Regulations - Complete Draft Ordinance as of 11/01/19
    The above document includes the following sections:
    pages 1-5: Ordinance 2235
    page 6: Exhibit A - updates to the Revised Municipal Code
    pages 7-22: Exhibits B/C/D - updates to LDC Article III, Development Review
    pages 23-53: Exhibits E/F - updates to LDC Article V, Uses and Accessory Structures
    pages 54-55: Exhibit G - updates to LDC Article VI, Subdivision Standards
    pages 56-114: Exhibit H - updates to LDC Article XI, Measurements and Definitions
    pages 115-140: Exhibit I - updates to Oil and Gas Best Management Practices (BMPs)
    Note: draft regulations were initially posted for public review on Friday, Oct. 25. The above document has been updated from the version that was originally posted. 

To comment on the draft regulations, members of the public can:

  • Attend the Planning Commission Public Hearing on Oct. 30
  • Attend the City Council Public Hearing on Nov. 4
  • Submit the online form to make written comments in advance
    Note: If you would like your comments to be considered prior to the Nov. 4 city council meeting, this form must be submitted by Wednesday, Oct. 30.

Public Open Houses on Updated Regulations

The city held public open houses on October 2 and 3 so community members could share feedback and suggestions on the updated oil and gas regulations. A series of stations featured informational boards showing more about the code update process and items the revised regulations could potentially include.

City informational boards - Oct. 2019 public open houses

Staff also heard from city council, planning commission, other regulatory/government agencies and industry stakeholders before drafting the updated city regulations. 

Regional Operator Agreement with Extraction Oil & Gas

After negotiating additional protections in response to public comments, the City of Commerce City approved a revised Regional Operator Agreement (ROA) with Extraction Oil & Gas, LLC on September 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. 

Review the 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 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 September 16 city council meeting provides more background and the most recent updates related to oil and gas in the city. 

ROA Public Comment Period, July 9-29

The draft ROA was open for a 21-day public comment period between July 9 and 29, 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 the comments submitted during the Public Comment Period

Draft Regional Operator Agreement Documents for Review

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

En Español

ROA documents are also available in Spanish for informational purposes only - Spanish versions are not a substitute for any terms in the final English document
El proposito de la version en Español es solo para proveer información y no debe ser considerado un substituto de los terminos en la version en inglés ROA final

Process

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 handles the state permitting process. Permit applications must be submitted to COGCC and approved before any city permits can be issued or any activity occurs on a drilling site. Learn more about the COGCC regulatory process

Recent oil and gas application activity

The city’s role in regulating oil and gas involves the surface-level activities related to drilling within Commerce City limits. The land development code (LDC) requires any potential operator to obtain an oil and gas permit and execute an extraction agreement with the city for each individual well pad prior to operations taking place. The LDC also regulates plugging and abandonment of existing well sites in the city.

City oil and gas documents:

Public Involvement/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 has also hosted surveys and public meetings to collect public comment in addition to the opportunities provided during the "citizen communication" portion of every city council regular meeting.

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 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

The city recently 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.

DRAFT Road impact fee study - June 10, 2019 

Before adopting the fee, the city received public feedback on the fee schedule and report methodology.  The process for adopting the proposed fee included the following milestones:

  • May 23 - Public Meeting at Bison Ridge Recreation Center
  • June 17 - City Council review of fee study  (View council presentation)
  • June 18 - Planning Commission review of fee study
  • July 1 - City Council approved Ordinance 2213 on 1st Reading
  • August 5 - City Council approved Ordinance 2213 for final adoption on 2nd Reading

How to Stay Informed

Renewed Industry Interest

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 recent change has 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