Colorado Gov. John Hickenlooper says that like most governors, he prefers state regulation of oil and gas drilling to federal regulation.
“Most governors are going to argue that it should be a state responsibility,” Hickenlooper said Wednesday at a news conference during the energy consulting firm IHS CERA’s annual executive conference in Houston. “We can create regulations that are less onerous but more effective than blanket regulations that come out of Washington.”
States have been taking a closer look at drilling regulations as newer techniques like horizontal drilling have allowed companies to extract more resources than previously thought possible. As drilling moves closer to more populated areas, residents have raised concerns about hydraulic fracturing, a technique that involves blasting underground rock formations with a mix of water, chemicals and sand to release oil or natural gas.
Industry representatives have said hydraulic fracturing has been done safely for decades, but some residents say they fear operations might taint drinking water.
“Transparency is a big part of the anxiety. If you look at the mechanics of horizontal drilling with fracking, it’s not hard to be able to demonstrate that we can drill for oil and gas and protect aquifers,” said Hickenlooper, a former geologist. He said there have only been a couple of instances of contamination, and that’s because of shoddy well construction. “Maybe we need to increase fines,” he said.
Hickenlooper has drawn fire from conservation groups for saying in an industry-sponsored ad that there have been no instances of groundwater contamination associated with drilling and hydraulic fracturing in Colorado since the state overhauled its oil and gas rules in 2008. After conservation groups questioned that claim, his spokeswoman acknowledged there have been spills associated with equipment failures at the surface of drilling sites that have affected shallow groundwater but said that’s a different process from drilling and fracking.
His spokeswoman has said the ad’s greater message was that Colorado worked with both industry officials and environmentalists to adopt tough rules for disclosing chemicals used in fracking.
Hickenlooper said Wednesday that issues around fracking fluids have been “put to bed.” Now the issues are how well the wells are cemented and methane that escapes into the air.
He also said air quality issues around drilling sites need to be addressed. He said companies are working on designing equipment that will run on natural gas instead of diesel. “Those kinds of little changes will have dramatic effects on air quality,” he said.
In states including Colorado and New York, there has been tension over how much communities can regulate drilling within their borders, on top of statewide regulations. In Colorado, Hickenlooper has formed a task force to clarify the regulatory jurisdictions of the state and local governments.
“If each county had a different set of regulations it would be very tough on our industry,” Hickenlooper said.
As for other forms of energy, Hickenlooper said he’d like to see tax credits for wind energy extended, though he advocates a five-year phase-out period for the subsidies.