U.S.

Oil spills in flood-hit Colorado raise concerns over industry regulation

Residents of a town in hard-hit Weld County, with 20,000 active wells, say oil and gas is booming out of control

Weld County, Colo., has over 20,000 active oil and gas wells, many of them in flooded areas, raising questions about the state's regulations.
AP2013

At least two large oil spills have been confirmed in the aftermath of Colorado's historic floods -- with almost 20,000 gallons of oil spilled into Colorado rivers -- raising fears of contamination and questions about the regulation of the state's growing oil and gas industry.

On Wednesday, Anadarko Petroleum Corp. said that a 5,000-gallon tank had spilled oil into the South Platte River near the town of Millikin in flood-ravaged Weld County, the most heavily drilled county in the state, with about 20,000 active oil and gas wells. Thursday the company announced a second, larger leak of more than 13,000 gallons of oil on the nearby St. Vrain River.

Videos and photos uploaded to social-media sites showed toppled tanks, flooded wells and ruptured pipelines. One video allegedly showed a destroyed storage tank in Weld County with green fluid leaking out.

Just over 10 miles from the Millikin spill site is Greeley, Weld's county seat and biggest city. It has been on the front lines of the battle over regulation of the oil and gas industry. Though the city council said it has stayed within the state's regulations, many residents say an industry they once tolerated has gotten out of control.

In the mid-1980s, Greeley barred the oil and gas industry from drilling within its limits. But that decision was overturned in 1992 by Colorado's Supreme Court after a long, costly battle with energy companies.

Now the economy of the town is dependent on the industry. Greeley has flourished during Colorado's recent oil and gas boom and has more than 400 wells. That number is expected to grow to 1,600 in coming years, thanks largely to the industry's powerful influence in city government, residents say.

"They've drilled up the entire county, so there's no more places left to drill, and all of a sudden they're doing it within Greeley city limits," Dr. Mark Schreibman, founder of Greeley Communities United, told Al Jazeera.

Greeley Mayor Tom Norton says the city council doesn't have the authority to decide when and where drilling occurs, since that is a property owner's right. The council's job is simply to determine whether drilling activity complies with state regulations. And if it is, there's nothing the council can do to stop it. "They think we have the authority. We don't. We have the authority to regulate how it's done."

But state regulations allowed drilling and storage in flood plains, and Carl Ericson of Weld Air and Water said it's the speed at which the regulations were developed in the county that's the biggest obstacle to responsible regulation.

"When a disaster like the flood happens, they're stretched beyond comprehension," he said. "It points to the inadequacy of our regulation system." In Colorado, regulators rely on reports from the industry itself on what it's doing wrong. "You've got the fox guarding the henhouse," Ericson said.

Despite the risks, some residents enjoy the royalty checks they get from leasing their land to drilling companies and the extra money coming into a town that had a 10 percent unemployment rate before the boom.

"It's a good thing for everybody … The industry is providing millions and millions of dollars and producing labor opportunities,” City Councilman Charles Archibeque told Al Jazeera.

"You can't deprive people the right to minerals on their property … I leased out some of my land."

Oil rush

Regardless of whether they feel the economic benefits are worth the risk, many residents say they feel the industry's encroachment on their town is unstoppable.

"We've gotten letters asking about leasing out our land for drilling," Fred Cleaver, a co-founder of Weld Air and Water told Al Jazeera. "We haven't leased it out, but we expect to be forced. It’s some kind of oil-company socialism."

Synergy and Mineral Resources, two oil and gas companies working in Greeley, have been called very aggressive by residents, citing the plans to quadruple the number of active wells in the city.

Mineral Resources did not respond to a request for a statement by the time this article was published.

Synergy spokesman Craig Raspesin told Al Jazeera, "We've met all the state requirements … and we've worked diligently with air and water groups that have brought forth concerns."

"Everyone has a different level of tolerance … but we feel like we can coexist with municipal operations, and we're working hard to show that. We've got hundreds of wells within municipalities, and we don't have any issues."

Residents, however, tell a different story.

"The city council is what is really allowing drilling in people's backyards and near schools.There's this rush to get oil and gas wells in every little piece of land that's open," Ericson said.

Many people complain that their city council is not representative of their concerns, adding that Mineral Resources is hosting an impressive party for the mayor's re-election campaign.

"We have a very old guard in our city council, and right now 25 percent of the council's budget comes from oil and gas revenues," Schreibman said. "The more you pick the pockets of the oil and gas folks, the greater their influence becomes."

To see that the residents don't agree with the pace of the industry's expansion in their town, Schreibman suggested attending one of the city-council meetings when projects are open for discussion. "Over 200 people show up against, maybe four or five for."

Norton tells a different story, saying, "We've had hearings where we spend many hours listening to them."

He referred to the Colorado Supreme Court decision that reversed Greeley's decision to ban drilling within city limits. The ruling declared control of oil and gas resources a property right that cannot be denied as long as the drilling is carried out within the state's regulatory process.

"What they're saying is they don't like the fact that we don't have the constitutional authority to change access to minerals," Norton told Al Jazeera. "The only authority we have is to regulate how it's done in a way that doesn't limit it."

A project approved by city planners in Greeley's Fox Run neighborhood would allow 16 wells in the area, with wellheads and tanks at least 350 feet from porches.

"I know a family from Fox Run who sold their house and left town because of this," Schreibman said. "People are starting to move away. Property values are going down."

Norton said that residents had appealed the city's decision to allow drilling in Fox Run but that in the end "it was determined that the original decision to allow it was made in accordance with our ordinances, and because of that, we approved it."

Colorado's multibillion-dollar oil and gas industry has mushroomed over the past decade. In June, oil production increased nearly 30 percent from the same period last year, to 161,000 barrels per day.

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