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.

Draft Operator Agreement with Extraction Oil & Gas

Public Comment Period Open July 9-29

After a full year of negotiations, the city has reached a draft Regional Operator Agreement (ROA) with Extraction Oil & Gas, LLC. The draft agreement is open for a 21-day public comment period between July 9 and 29, allowing residents to submit feedback for consideration before the city decides whether to take official action. 

The ROA sets requirements for the city and Extraction in the operation of Extraction’s eight proposed well pad sites in the city, but does not act as an approval for drilling. The ROA includes Best Management Practices (BMPs) designed to address health, safety, quality of life and environmental concerns. The BMPs cover categories such as air and water quality, noise, traffic reduction, inspections, emergency management and many other topics. The city’s priorities throughout the process have been to minimize impacts and maximize protections for the community while respecting private property rights. 

Staff will review feedback received during the comment period and determine what steps to take going forward. Potential next steps could be to extend the comment period, resume negotiations to modify the ROA, or approve or reject the current version. Approval of the ROA would not provide Extraction with vested rights or an approval for drilling. 

If an ROA is approved, a series of other permitting processes must occur before any new activity could begin in the city. These processes would likely take until sometime in 2020 to complete and include rezoning, obtaining city oil and gas permits, obtaining conditional use permits for pipelines, and the state permitting process. The ROA is authorized in the city’s Land Development Code (Section 21-3216).

Draft Regional Operator Agreement Documents for Review

Submitting Comments

Public Comment Form - Draft ROA with Extraction Oil & Gas

The public comment period ends July 29 at 11:59:59 p.m.
Written comments can also be submitted in person to the Community Development Department at the Commerce City Civic Center, 7887 E. 60th Ave. Copies of the ROA are also available for public review at 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. Public comment opportunities on city processes include:

  • 21-day public comment period for any potential regional operator agreement
  • Neighborhood meeting about each individual 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 is in the process of creating a new road impact fee for new oil and gas development occurring in the city. Revenue from the fee would 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 is requesting feedback on the fee schedule and report methodology.  The process for adopting the proposed fee includes 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 approves Ordinance 2213 on 1st Reading
  • August 5 - City Council to consider Ordinance 2213 for adoption on 2nd Reading

Updating City Regulations

An ordinance (#2183) making minor amendments to the oil and gas regulations in the LDC was approved by city council at the November 19, 2018 meeting. The amendments are limited in scope to clarify and reorganize city regulations (including grammatical revisions) and avoid potential conflict with state law. In addition to these minor updates, more policy-oriented additional changes to the city's regulations are expected at a later date.

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

Eight of the new well pads currently being proposed within the city would be operated by Extraction Oil & Gas, LLC. City staff has been meeting with Extraction representatives since the spring of 2018 to understand their plans for the area and negotiate items such as the BMPs mentioned above in order to minimize impacts and maximize protections for residents.

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. 6 open house

Information from Extraction Oil & Gas – Dec. 6 open house

Since the open house, city staff has continued to negotiate on BMPs and other elements of a potential regional operator agreement with Extraction. City Council has been 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