Wednesday, April 11, 2012

Discrepancies in Colorado Energy Land Use Policies

There is a discrepancy playing out in Colorado’s energy landscape and energy regulatory policy that may be poorly understood by officials and consumers alike.  It has to do with local control versus establishing statewide standards for siting energy facilities of all types.  

This legislative session has seen the introduction of a number of initiatives to enhance local control over the siting of oil and gas drilling activity largely intended to allow local jurisdictions to restrict the proximity of drilling activity to residential developments. These initiatives were opposed by, among others, the Hickenlooper administration and its cognizant regulatory agency, the Colorado Oil and Gas Conservation Commission (COGCC).  The argument essentially put forth by COGCC was that there needs to be uniform standards for siting drilling activity and that it is the agency best qualified to monitor and regulate the industry and to establish and enforce such standards.  As a hoped-for solution to the dispute between factions seeking local control versus statewide control, the administration has convened a task force and charged it with an ambitious agenda of reconciling local concerns with state agency control in only a few weeks time.

In contrast, consider the regulatory regime governing the siting of electrical generation facilities.  While the state agency of competent jurisdiction most closely associated with the development of electrical generation facilities is the Colorado Public Utilities Commission (CPUC), with the possible exception of transmission line siting, it wields little influence in the siting of electrical generation facilities be they coal fired, natural gas fired, solar, wind, or otherwise.  Rather, satisfying environmental concerns, economic concerns, building permits, and land use issues for facilities outside of municipalities rests solely in the hands of county commissions through what is known as the 1041 permit process.  One of the areas in which the discrepancy between state control of oil & gas development versus local control of power generation has become most obvious is the siting of wind and solar renewable energy facilities, and one of the cases that has received considerable recent attention is the 1041 permit process for a concentrating solar power facility near the San Luis Valley town of Center in Saguache County.

The Saguache County project, proposed by California solar developer Solar Reserve, posits the development of two concentrating solar electric generation facilities known as “power towers.”  A number of groups expressed environmental, wildlife, view shed, and quality of life concerns with this proposal to construct two 656-foot towers smack in the middle of the Valley on land that is presently dedicated to agricultural use.  In a 2 – 1 decision, the Saguache County commissioners recently approved the Solar Reserve 1041 permit application.  In its decision, the County Commission eschewed the aforementioned concerns in favor of the promised economic impact that the development would have.  If you’re having difficulty envisioning what this project entails, consider that the development would create an industrial facility encompassing approximately six square miles, the central focus of which would be two towers that are only 50 feet short of the tallest building in downtown Denver.  It is difficult to envision how such a project, with the Sand Dunes National Park and Sangre de Cristo Mountains to the east and the San Juan Mountains to the west, fits into the character of what is largely a pristine agricultural area.

A similar issue concerning the state’s abrogation of its siting authority to local officials can be found in the siting of wind turbines.  Here too, the absence of any statewide siting rules is troubling.  Apparently, it is acceptable for state officials to take a hands-off approach to the construction of a massive 400-foot wind turbine with a life expectancy of 20 years or more 300 feet from your back door, leaving the decision to local officials, but only a state agency may weigh in on the drilling of an oil or gas well the same distance away.  This certainly seems inconsistent.  To be fair, COGCC at least maintains a database of all such drilling activity, issues permits, and monitors each well while CPUC in particular, and the state in general, seem strangely disinterested in regulating any aspect of the construction of wind or solar facilities having at least as great an impact.  Moreover, the public would likely find troubling the fact that CPUC does not even maintain a list or require the most minimal registration for any renewable energy generation facility, be it a $400 million wind farm or a $50,000 solar installation. Sadly, attempts at requiring CPUC to maintain such information in the past were met with resistance by public officials, utilities, and developers alike.
The concern here is not whether oil and gas development should fall under local or state jurisdiction.  Nor should this be construed as an argument in favor of limiting additional renewable energy development, as some will undoubtedly assume.  What is of concern is that there is a troubling inconsistency in the regulation of different energy sources based, apparently, on little more than political agenda.


  1. I see where you are coming from with the inconsistency of the permitting practices, but I feel there is a reason for it beyond politics. Your question is not whether one industry or the other should be state or local, but why they aren’t the same. When an oil rig or a gas fracking rig is put close to a residential area, there are a lot more concerns, environmental and health, than there are from a wind turbine or solar installation. The effects of a drilling operation may affect more people than just those within that locality, so state control makes more sense. Two of the most significant risks of drilling include ground water contamination and earthquakes.
    In Pennsylvania, a township’s drinking water was contaminated after an equipment failure of a nearby fracking well. Chemicals detected in the water included ammonia, arsenic, chloromethane, iron, manganese, t-butyl alcohol, toluene, and methane gas. In May 2011, Pennsylvania’s Department of Environmental Protection fined Chesapeake Energy $900,000 for allowing methane gas from as many as six wells to pollute drinking water in five towns(1).
    The practice of fracking has been linked to causing small earthquakes close to the injection wells. In Texas, fracking may have contributed to over 180 tremors in Texas between Oct 2008 and May 2009 (2).
    It can be seen then that drilling operations have effects that reach out further than just the local area of the injection well. Wind turbines and solar panels have effects that are limited to their local area, so local regulation makes sense. I think that it’s not just the oil and gas industry that would be subjected to state control though, as a geothermal plant would incur some of the same risks, and should be regulated by the state. I’m unaware of whether state or local regulations apply to geothermal plants, but if they are under local control than your argument of certain industries being regulated for political purposes only would be valid.


  2. Nate,

    Yes, and in fact, with regard to geothermal, the well drilling does require a permit from the state engineer's office but the facility is subject only to county permitting. However, I don't agree that the impacts of wind and solar are only nearby. Wind plants cover many square miles as do large solar plants both of which also have other environmental and wildlife impacts that, in Colorado at least, are ignored by state authorities. When I was at the PUC, I attempted to require that all renewable facilities at least have to register with the PUC and the Commission in place at that time refused to hear of it. Sadly, there is no office of state government that even maintains the most minimal listing of such projects. -- Rich


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