Aurora, like much of the state, is in the weeds when it comes to managing oil and gas industry permits and dealing with this complex industry in a way it never has before.
It’s time to delay issuing new permits until the city can create a sound, transparent system that’s accountable to the public. Currently, that doesn’t exist.
The already complicated process of how petroleum companies drill for and extract gas and oil in Aurora was turned upside down this year when state lawmakers make drastic changes to the state’s regulation of that burgeoning industry.
Parts of Aurora encompass or are near the lucrative and petroleum rich Wattenberg Field, part of the larger Denver-Julesberg Basin. It means that oil exploration and development will continue to be an important part of the city’s economic and environmental picture.
Three critical things have changed in the past few weeks:
• The new state law changes the focus of petroleum industry regulation from development to public safety.
• That new law also turns control of petroleum regulation over to local governments, including Aurora and Adams and Arapahoe counties. New state gas and oil regulations and procedures are just now being created.
• Aurora simultaneously, and unwisely, created a new system of regulation allowing the city to enter into operating agreements with oil companies, outside of state control. Had Colorado not passed Senate Bill 181, an operator agreement process would have made sense. Since it’s unclear how that now-law will be implemented, the operator agreement process in Aurora has only created confusion.
The biggest problems are that agreements between the city and petroleum developers are created and negotiated in secret, and the city council, which is navigating drilling and fracking pacts, has absolutely no expertise to do it.
There is no parallel to this dubious process. The only time the city council directly negotiates contracts is when the other party is either giving something or getting something to the city as a legal entity, such as tax incentives and city-owned land negotiations. That’s not the case here. Drilling almost always occurs on private land, and how that occurs is a matter of policy, not contract. With no separation between oil companies and the elected officials who will now directly control their livelihood, the appearance of impropriety pales under the very real threat of personal and campaign corruption.
This week, two of these new operator agreements came before the city council. Both had been created and negotiated by the city council in secret, executive sessions, closed to the public. The city’s nascent and now useless oil and gas commission was not involved. After being drafted, these pacts were released to the public, where city lawmakers forwarded one to open city council meetings and hearings, and they delayed another.
Since the agreements are created in secret by the very lawmakers who then publicly scrutinize and then approve them, any suggestion of accountability and transparency is a sham. How a vast and complicated operator agreement with Axis Extraction was created and then pulled by the same people who wrote it is a concerning example of how confused and unprepared Aurora is to take on this critical and far-reaching job.
First, the city must either incorporate the operator agreement process into existing permitting process, which involves the Aurora Planning Commission as well as a Board of Adjustments, or the city should reconfigure the Aurora Oil and Gas Commission to include expertise from petroleum, environmental and planning industries to create and hone these agreements — in public.
Those draft agreements should be scrutinized and modified by the city council in public, in the same way they conduct all other city business.
The oil and gas industry is exceedingly complex, and how it operates in Aurora has far-reaching economic and public safety consequences that are too critical to allow permanent contracts to be created by 11 untrained, part-time legislators and a handful of city staffers behind closed doors.
A few weeks or months for prudent reflection and preparation have never been more important in Aurora.