Letter to the CCOB from 301 Broomfield Health and Safety First

On May 30, 2018, a group of concerned citizens from the 301 Broomfield Health and Safety First organization drafted a letter to the City and County of Broomfield, specifically to the currently elected City Council Members. The letter details several topics relevant to current concerns that many residents have about the impact of the Extraction Oil and Gas development projects on our residential communities. Specifically addressed topics include the current state of law, the Martinez vs COGCC premise, a potential breach of operator contract regarding the CDP (Comprehensive Drilling Plan), Extraction’s potential failure to follow protocol when filing with the COGCC, best management practices (or lack thereof), enforcement criteria, risk management/transference of risk, how to work with Extraction from a strong negotiation stance, concerns of trust in the operator, Extraction’s lack of thoughtful, comprehensive response to citizen comments, and the city’s obligation to support public concerns. The hope is that the CCOB will take a pause and consider the health and safety of the people in the community, the risks associated with this project, and the impact, both real and potential, that this project will have on the communities so close to where the development will take place.

Dear Council Members and Mayor Ahrens:

We appreciate the continued efforts of the City and County of Broomfield to protect the health, safety, and welfare of the residents of this great community. We understand that this is the highest priority for our City and Council. We want to remind the City that the protection of health, safety, and welfare is the law. As a result, we have outlined below several outstanding issues that must be resolved prior to any oil and gas development moving forward in Broomfield.  

Current State of the Law

The Colorado Oil and Gas Conservation Act states per §34-60-102(1)(a) that “It is declared to be in the public interest to: (I) Foster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources”.

The Broomfield Charter in Section 2.1 states “…Broomfield shall condition oil and gas development permits to require oil and gas development to only occur in a manner that does not adversely impact the health, safety, and welfare of Broomfield’s residents in their workplaces, their homes, their schools, and public parks.…”

We understand that you have relied on the Supreme Court’s 2016 opinion regarding Longmont’s ban and Ft. Collins 5-year moratorium on fracking in your legal reasoning and justification for being very cautious regarding how to proceed.  In our view, protecting public health, safety, and welfare at a local level is not a ban on oil and gas development, nor should it be considered one. We also do not believe that protecting public health and safety can be construed as an operational conflict with the state. Protecting health and safety IS the state law, and also falls under a City’s local land use authority, police powers, and ability to manage air quality.  In addition, we believe that the 2016 opinion represents the narrow view of state preemption. Legal arguments have been made by outside attorneys that the people’s right of initiative may not be preempted by the state (Leftwich opinion). We also do not believe the impact of the Martinez case decision is being taken into consideration. This decision is being appealed to the Supreme Court, but it is the existing, published high court opinion (Weiner opinion). There are potentially other legal arguments that could be utilized as well–breach of contract, tort law (negligence, misrepresentations, intentional harm), a brief moratorium, forced pooling/takings law (Lynch opinion), wildlife protection, injunctive relief, etc.

It is important to also point out that COGCC’s claim in the Martinez case is that they are required to “balance” oil and gas development with health, safety, welfare and the environment. The inadequacies in Extraction’s CDP as expressed by Council, as well as the COGCC’s own record, show that even this lower standard is not being met in Broomfield or in the State as a whole.

Martinez v. COGCC

We appreciate that our City shares our concerns about potentially dangerous industrial operations moving into residential areas and that Council unanimously voted to join the amicus curiae brief in support of the Martinez case, along with many other cities. We believe that the COGCC has failed to interpret the Colorado Oil and Gas Conservation Act correctly in that it has not prioritized public health, safety, and welfare, including protection of the environment and wildlife resources, in its permitting of operations and in failing to give local governments more control over these matters. This belief is supported by the numerous accidents that have occured at oil and gas sites over the past few years and by COGCC’s lack of resources to plug and abandon old wells which leak methane, and to adequately inspect and regulate operations.

Our City is at a crossroads as we await the decision of the Colorado Supreme Court. Several groups including impacted residents, environmental groups, medical groups, the Colorado PTA, many local governments, and the CO League of Women Voters filed amicus curiae briefs displaying a wealth of information in support of Martinez.  We believe the evidence is piling up showing that the time for change is now, despite resistance from the state and the industry. The City of Broomfield has the authority to protect the public health, safety, and welfare of the residents of Broomfield and the residents support our City taking steps, even if it entails legal methods that have not been attempted before. This is not a time to look the other way, but rather it is the time to acknowledge that the risks of oil and gas development in residential areas are clear and a threat to our community. It is time to act on behalf of the voters who passed 301 by a large margin and take any steps necessary to ensure that the protection of public health, safety, and welfare is a condition that is being met.

Breach of Operator Agreement Regarding CDP

We are also concerned about how Extraction has moved forward with obtaining permits from the state. Per the Operator Agreement, Extraction should have submitted a Comprehensive Drilling Plan (CDP) for approval by the City prior to submitting forms 2/2a applications for permits to drill to the COGCC. Regardless of when the actual approval would need to be granted, it is clear that Extraction did not submit a CDP that could have reasonably been approved prior to applying for permits with the COGCC. The document submitted to the City just prior to Extraction filing their forms 2/2a permits was a preliminary draft at best. We find this problematic, as a breach of contract this early on would be indicative of the potential for additional, and more serious, breaches in the future.

COGCC Requirement – Permit Applications Must comport with CDP

Extraction’s Spacing Unit Applications submitted to the COGCC did not follow standard protocol. Therefore, at the October 31, 2017 COGCC Hearing, in an attempt by the COGCC to maintain oversight, the language for the spacing unit applications was amended to state that,

“The wells will be drilled from surface locations within the unit or at legal locations on adjacent lands.  Any applications for Permits to Drill (Form 2) or Oil and Gas Location Assessments (Form 2A) filed by Extraction Oil and Gas, Inc in the unit on surface lands within the City and County of Broomfield will comport with the October 24, 2017 Amended and Restated Oil and Gas Operator Agreement between the Application and the City and County of Broomfield.” 

“Comport with” was defined in the COGCC record as “has to be consistent with”.

As a requirement of the above Operator Agreement, Extraction must submit a Comprehensive Drilling Plan (CDP) and Application for review and approval by the City.

To clarify, per the COGCC, the applications for Forms 2/2A Permits must comport with the Operator Agreement. Per the Operator Agreement, the CDP must be approved by the City. Therefore, why would the City of Broomfield not protest the approval of any permits that do not have the full approved CDP attached to the COGCC applications/permits? We believe this needs to happen.

Best Management Practices

In addition to the above point regarding the permits not having a full CDP attached, we have serious concerns regarding the proposed BMPs that are being attached to the COGCC applications/permits. Should these permits be approved with only BMP’s, does Broomfield keep full authority to enforce everything included within the CDP? We also believe the BMPs that Extraction submitted do not meet the conditions of the City Charter or the Operator Agreement. We find it to be problematic that this standard is what is being put forth to the COGCC.

Enforcement Criteria

It is essential that the City of Broomfield have a clear and efficient method to enforce all aspects of oil and gas development prior to permitting any oil and gas development. We believe that the City must have the ability to enforce the Operator Agreement, including the CDP. These enforcements must include fees that are in accordance with the violation, as well as the ability to revoke permits for repetitive violations. It is essential that the City has ensured that the CDP and BMPs are fully enforceable and that all enforcement criteria are in place before any permits are issued.  Perhaps we need a moratorium to get everything in place before permits are issued.

Risk Management/Transference of Risk

Extraction has presented several catastrophic risks in “Section (R) Risk Management Plan” with a 3-10% chance of occurrence which, when compiled per standard risk management calculations (Risk = [1 – ( 1 – 0.065 )^12] * 100 = 55%), indicates that there is a substantial likelihood (>50%) of one of these events occuring. It is crucial to note that even before compiling these risks, there is a 3 to 10% “Inherent Likelihood” of a “Catastrophic” event taking place in Broomfield. Catastrophic is defined in the CDP as “Fatalities, serious injury, devastating impact to environment or community (50+ homes affected).” The next risk category, “Major”, is defined as “Serious injury, serious damage to environment or impact to 20+ homes.” We have not calculated the combined chance of a Major event, but one listed Major Risk, “Surface or Soil Contamination”, has a “Moderate” likelihood of occuring (11 to 35%). Therefore, for just this one instance there is an 11 to 35% Inherent Likelihood of serious injury to Broomfield residents, serious damage to the  environment or impact to more than 20 Broomfield homes. This alone is an unacceptable risk to the health, safety, welfare and the environment of Broomfield.

We understand that this data was compiled by a recognized risk management/insurance firm hired by CCOB per the recommendation of an insurance specialist and member of the Oil & Gas Task Force. The firm used data that insurance companies gather to make risk management calculations and we trust their calculations as that is what they are good at doing.

Is the inclusion of this compilation of risks in the CDP, which is subject to approval by the City, an example of Extraction’s “transference of risk” from themselves to the City? If/when something catastrophic happens, can the City be held responsible for agreeing to allow operations that place this level of risk close to neighborhoods? Will the residents be left to suffer the consequences of the event and then as taxpayers also be financially responsible for the aftermath? We urge you, as those responsible for the decisions being made, to consider this possibility. Is City Council ready to accept this risk to the CCOB and to the residents?

We also believe that more fully developed root cause analyses must be provided. Detailed remedies must be developed to ensure prevention of incidents that would have more profound consequences if they occur in or near our residential areas (e.g., Windsor explosion, Hudson well blowout, Berthoud bubble-up).

In addition, the majority of your voting constituents passed a health and safety measure that requires the protection of public health, safety, and welfare. We believe the passage of 301 means that the City cannot approve this level of risk into the community.  The City must ensure these risks will be eliminated prior to any operator starting operations in Broomfield.

Working with Extraction from a strong stance

City staff and residents of Broomfield have spent countless hours reviewing and providing comments on Extraction’s CDP to assist them as they work toward a CDP that meets the requirements of adequately protecting public health, safety, and welfare. Despite these efforts, Extraction continues to add additional information to the plan while seeming to avoid pressing issues. We believe that it is time for the City of Broomfield to stop guiding Extraction through the process of writing their Comprehensive Drilling Plan (CDP). We want the City to put the onus on the operator to create a professional CDP that meets current law including requirements of protection of public health, safety, and welfare, and the environment. If the operator is unable to do this on their own accord, we believe that it is time for the City to deny the CDP for not meeting the standards put forward in the City Charter.  Also, we think that the City should stop the approval process for additional pipelines until all issues are addressed, as allowing this project to move forward at this stage is problematic for many reasons.

Trust in Operator

The proposed large-scale oil and gas development near our City’s populated areas creates a situation in which the residents who live, work, and engage in activities in the vicinity must put full trust in the operator. Despite the claims by Extraction that their proposed operations are “Best in Class” and a “World Class” project, their actions seem to be quite different. There have been many inconsistencies, miscommunications, lack of information provided, and responsibility being deferred to other parties. Extraction chose to drill near our residential communities and therefore, they must be held to the highest of standards. Based on the challenges that have come about during this process, including the shortfalls in creating a comprehensive CDP,  should we trust Extraction to perform large-scale industrial activities in our community in a manner that fully protects our health, safety, and welfare? Here is a short summary of additional issues that have contributed to a lack of trust in ensuring that we will be adequately protected:

  • Initially appearing to plan 24 wells total, and then applying for 144 wells;
  • Failing to provide meaningful data and information when requested;
  • Possible contract breaches happening within the first few months of the agreement being signed; and
  • An apparent resistance in working with the city to move these operations away from communities to safer locations and to reducing the size of the operations

Extraction’s Response to the Citizen Comments

We have reviewed Extraction’s letter in response to the Citizen’s Comments. We find their responses inadequate in terms of actually addressing legitimate concerns. It is disappointing that rather than providing data to support their claims, Extraction seems to avoid answering directly. Their tactics included: deferring the question or responsibility to the City; referencing the amount of time they have spent; or simply ignoring the question or concern.

In addition, information was requested regarding accidents and incidents that occured at Extraction sites. Rather than providing root cause analysis of all these incidents and how Extraction plans to prevent future occurrences, residents were given incomplete information. A relationship of trust comes through the operator proving that it is truly on board with creating a culture of safety and has the means to do so. Please look forward to our complete response to “Extraction’s letter in response to Citizen Concerns dated May 23, 2018” which we will be sending in the near term.

City must support public concerns

The City has the authority and responsibility to protect the public health, safety, and welfare of the people. Please do not simply state that your hands are tied because the path forward is not an easy road. The fact that the City Council chose to enter into a contract just prior to an election does not absolve the City of their responsibility as the amended City Charter states. We expect our Local Government to stand with its citizens in upholding what is the most important responsibility of government – protecting public health, safety and welfare. We will support the City taking any and all steps necessary to ensure that this happens.

Sincerely,

301 Broomfield Health and Safety First