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Is This The End Of Colorado’s Shale Boom?

Is This The End Of Colorado’s Shale Boom?

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Colorado has hosted a surge in oil and gas production in the last few years, but the industry faces new challenges as the state overhauls its regulatory regime.

Much of the shale boom in Colorado has been concentrated in relatively dense suburbs north of Denver, which means, unlike the fracking frenzy in West Texas, drillers often bump up against homes, businesses and schools. That has led to an ongoing tension and fights between local communities and the shale industry.

Years ago, this battle was manifested in a handful of local bans on fracking. Those were tossed out by state courts. More recently, a 2018 public referendum on increasing setback distances – the minimum distance between a drilling operation and a local home or school – went down in defeat as the oil and gas industry showered the state with money in opposition the vote.

But the story didn’t end there. Although consumer advocates, environmental groups and local communities lost the vote on greater setback distances, the same November election resulted in wins in the legislature for Democrats.

The bluer legislature has moved quickly. Over the last few weeks, a landmark bill has been moving quickly through the Colorado House and Senate, which would vastly expand the authority that local communities have over drilling operations. They would have a larger say on permitting, zoning and setback distances. On Wednesday, the Senate passed the bill, sending it to the desk of Governor Jared Polis, who supports the measure.

A few of the biggest losers could be Anadarko Petroleum, which holds over 400,000 acres in Colorado, followed by Noble Energy, which has 350,000 acres, according to Bloomberg. Some of that acreage could become harder to develop if local cities or counties impose stricter zoning laws or greater setback distances that limit the ability to drill near population centers.

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