Oil and Gas Development Regulatory Amendment and Policy Guidance PLN Community and Economic Development

Outline Introduction Current Approaches for Regulating Activity The Moratorium and Its Objective Proposed Regulation Amendments Proposed Policy Direction Planning Commission Update Staff Recommendations

Introduction Adams County amended its zoning regulations in January 2015 to address future oil and gas development Some proposals considered since that time are significantly different from what was anticipated The presentation will expand upon the current situation and present options for moving forward

Permits for horizontal drilling are on the rise

Horizontal drilling allows for consolidation of many wells on a single site

Current Approaches for Regulating Oil and Gas Activity

State and Local Regulatory Processes Colorado Oil and Gas Conservation Commission COGCC Approval – Form 2A: Oil and Gas Location Assessment – Form 2: Application for Permit to Drill Local Government Designee (LGD) – Point of contact with State – Provides comments on applications for State permit – Prior to 2015, the only step in local process

County Approval Two options for agreement Special Use Permit (SUP) Case-by-case basis, decided in public hearing before the Board of Adjustment Memorandum of Understanding (MOU) Long-term negotiated agreement between operator and County for current and future sites

MOU A voluntary agreement Modeled after Arapahoe County’s MOU Some heightened standards in return for expedited review Many sites well-suited for the MOU as currently written

Adams County MOUs Four operators have executed the Adams County MOU: Bill Barrett Corporation Conoco Phillips Corporation Great Western Oil & Gas Company Ward Petroleum Four additional operators have requested to enter into MOU Extraction Oil and Gas, LLC PDC Energy, Inc. PetroShare Corporation Synergy Resources Corporation

What Does the MOU Provide? 1.Visual mitigation (screening vegetation) 2.Traffic Control (reduce impact during school bus hours) 3.Meetings with local government 4.Local inspections 5.Baseline water well testing (at request of well owners w/in ½ mile) 6.Spill release report (notify multiple agencies, not just state) 7.Data and record-keeping 8.Emergency Response Planning 9.Notification for drilling (notify residents within 2,640 feet, not 1,000)

SUP Standards Criteria are general in nature Interpreted on a case-by-case basis Nine Criteria for Decision Making ConsistencyCompliance CompatibilityOff-site impacts SuitabilityAdequate site features Adequate surrounding infrastructure and services Cultural and Historical Resources Water Bodies and Water Quality

SUP Standards 1.Is the use consistent with the purpose of the regulations? 2.Does the use comply with the requirements of these regulations, including all performance standards? 3.Is the use … compatible with the surrounding area, harmonious with the character of the neighborhood, not detrimental … to the immediate area, to future development of the area, to the health, safety, or welfare of the inhabitants of the area and the County?

SUP Standards 4.Has the use addressed all off-site impacts? 5.Is the site suitable for the special use including adequate usable space, adequate access, and absence of environmental constraints? 6.Does the site plan for the proposed special use provide adequate parking, traffic circulation, open space, fencing, screening, and landscaping? 7.Are adequate sewer, water, storm water drainage, fire protection, police protection, and roads available to serve the needs of the special use as designed and proposed?

SUP Standards 8.The oil and gas operation shall not, to the extent possible, cause significant degradation of cultural, historic or archaeological sites eligible for County landmarking, or the National Historic Register. 9.Oil and gas operations shall not, to the extent possible, cause adverse impacts to surface or ground waters within Adams County. Operators shall comply with all COGCC Rules and applicable water quality standards set by the Colorado Department of Public Health and Environment and Tri-County Health Department.

The Moratorium and Its Objective

Moratorium January 26, 2016 – Staff presentation on oil and gas regulations, memorandum of understanding, COGCC rulemaking, and options moving forward – Board of County Commissioners votes to hire outside counsel to assist in the thorough review of the current regulatory scheme.

Moratorium February 9, 2016 – Board of County Commissioners receives initial guidance from new legal counsel, Mr. Jeff Robbins – Board of County Commissioners votes to enact a six- week moratorium on new oil and gas development within urban growth boundaries and within 1,500 feet of a home or public building

Moratorium The Objective – Provide a stable environment to allow thorough review of regulations – Meet with stakeholder groups to identify key concerns, needs, and opportunities – Based on stakeholder input, develop a regulatory process that can mitigate adverse impacts of oil and gas development while still allowing oil and gas development to occur

Proposed Regulatory Solutions

Regulatory Solutions Original MOU modeled after Arapahoe County – Current MOU lacks Arapahoe County’s administrative review process The oil and gas regulatory structure can be significantly improved with new review process Requires amendment to Development Standards and Regulations No proposal to amend MOU at this time – Changes to regulations allow comprehensive review on a site- specific basis with options for appropriate conditions or BMPs

Regulatory Solutions New Administrative Process – Creation of a Use by Special Review Permit (USR) – Definition for oil and gas facilities – Clear set of approval criteria – Detailed submittal requirements – 42-day review timeline – Public involvement process that may include neighborhood meetings – Defined appeal process and opportunity to refer cases to the Board of County Commissioners

Regulatory Solutions Compatibility with Adams County Comprehensive Plan Proposed regulation furthers the stated objective of Policy 7.5 “Provide for the extraction of subsurface resources in accordance with State law, but require mitigation of undesirable impacts to the natural environment and community as well as plans for viable potential reuse of the land.”

Regulatory Solutions Compatibility with Adams County Comprehensive Plan Emergency Preparedness Plan creates greater assurance towards the objective of Policy 12.1, Reduce Risk and Effects of Natural and Industrial Hazards. The solution creates submittals that allow decision- makers to “evaluate and quantify potential impacts” more effectively.

Proposed Policy Solutions

Policy Solutions Updated Fees Analysis of Traffic Impact Fee Comprehensive Planning and Collaboration Additional Participation in COGCC Processes Full-Time LGD and Oil and Gas Inspector Approval of Pending MOUs

Planning Commission Update

Considered text amendment on March 21, 2016 Voted 5-2 in favor of the text amendment The 2 dissenting votes were based upon lack of time to consider the issue. In their vote, the Planning Commission offered a number of suggestions:

Planning Commission Update Address request by City of Thornton to require approval by neighboring jurisdictions for any development within 1/2 mile of their boundaries. Provide specific criteria for staff to make the decision whether a case is referred to the BOCC for a decision Take more time to evaluate this issue and not rush through a decision on regulation changes

Planning Commission Update Provide more opportunity for stakeholders to participate in the process of developing regulations Provide more direction to staff regarding the criteria for approval and denial of permit Continue to work on the regulatory scheme even if these amendments are adopted

Staff Recommendations

Staff Recommendations for Case #PLN Approval of the proposed text amendment with Three Findings of Fact: 1.The text amendment is consistent with the Adams County Comprehensive Plan 2.The text amendment is consistent with the purposes of these standard and regulations 3.The text amendment will not be detrimental to the majority of persons or property in the surrounding areas nor to the community in general

Additional language for the text amendment: in Section (1), Memorandum of Understanding, add new language after the first sentence as follows: " An MOU may contain requirements similar to criteria contained within the Administrative Use by Special Review permit process. In such instances, the criteria within the Administrative Use by Special Review permit process shall govern." Staff Recommendations for Case #PLN

Revised language for the text amendment: in Section 4-10– (3): Criteria for Approval, delete current language and replace with language as follows: "The Oil and Gas Facility shall be compatible with the surrounding area and shall not create any site specific conditions that present significant or material impacts to nearby land uses. Best management practices or conditions of permit approval may be used to achieve compliance with this criteria.” Staff Recommendations for Case #PLN

Approval of the proposed text amendment and revised language introduced by staff with Three Findings of Fact: 1.The text amendment is consistent with the Adams County Comprehensive Plan 2.The text amendment is consistent with the purposes of these standard and regulations 3.The text amendment will not be detrimental to the majority of persons or property in the surrounding areas nor to the community in general

Further recommendations Approve the following proposals: Authorize the County Manager to hire a full-time staff person to act as the County's Local Government Designee. Authorize the County Manager to hire a full-time Oil and Gas Inspector to work in conjunction with the COGCC.

Further recommendations Approve the following proposals: Authorize staff to hire a consultant to undertake a traffic impact study that addresses the impact of oil and gas operations. Authorize staff to continue to work with outside counsel to evaluate ways in which the County can participate effectively in the drilling and space order process at the COGCC; identify outdoor activity areas in unincorporated Adams County and formally designate those areas with the COGCC; and evaluate options for collaboration with industry in comprehensive planning efforts regarding future oil and gas development.

Further recommendations Approve the following proposal in a separate agenda item and resolution : An amendment to the Community and Economic Development Department Fee Schedule to add new application fees for Administrative Use by Special Review application and to apply the Adams County Traffic Impact Fee Program to Oil and Gas Facilities

Further recommendations Approve the following proposal in a separate agenda item and individual resolutions : The pending Memorandums of Understanding currently submitted by A.Extraction Oil and Gas, LLC B.PDC Energy, Inc. C.PetroShare Corporation D.Synergy Resources Corporation