2. Outline Introduction Current Approaches for Regulating Activity Overview of Recent Study Sessions and Rulemaking Current Activity in Adams County Recent Trends Current Challenge Options

3. 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 Tonight’s presentation will expand upon the current situation and present options for moving forward

4. Current Approaches for Regulating Oil and Gas Activity

5. 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 – Prior to 2015, the only step in local process

6. Adams County Regulations

7. Adams County oil and gas regulations adopted on January 6, 2015 New regulations created a local approval process for the first time in approximately 30 years Created two new options for review and approval

8. 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 the operator and the County for current and future sites

9. MOU A voluntary agreement Modeled after Arapahoe County’s MOU Heightened standards in return for expedited review Majority of sites well-suited for the MOU as currently written

10. 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 submitted requests to enter into MOU

11. 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)

12. SUP Standards Criteria are general in nature Last SUP for Oil and Gas issued in 1970s Current application for a SUP is the first in decades Criteria for Decision Making AccessStormwater Controls Fees and PermitsWater Quality Safety StandardsWell Abandonment ReportingAir Emissions

13. Recent Study Sessions and Rulemaking

14. Study Session Meetings October 6, 2015 – Staff presentation on oil and gas regulations, memorandum of understanding, and interaction with the COGCC – Synergy Resources presentation on Wadley Farms site

15. Study Session Meetings: COGCC January 5, 2016 Presentation by COGCC Director Matt Lepore Overview of the role of the COGCC Adams County oil and gas activity statistics Discussion of COGCC inspection program and local inspection program feedback

16. Study Session Meetings January 19 th CDPHE presentation on research related to health impacts of oil and gas Discussion of regional air quality regulations and monitoring programs TCHD discussion of their advisory role

17. Rulemaking Hearings Governor’s Taskforce on Oil and Gas unanimously recommended two changes Recommendations #17 & #20 Hearings held by COGCC from Nov. 2015 – Jan. 2016

18. Recommendation #17 Definition of Large Urban Mitigation Area Facility Enhanced process for new Large Scale UMAs Allow for more local government input Recommendation #20 Operator registration with local governments Encourage planning for future oil and gas development Rulemaking Hearings

19. Definition of Large UMA Facility: 8 or more new wells or 4,000 barrels or more of new and existing produced hydrocarbons Collaboration Process for new Large UMAs: Notice to local government 90 days before submittal of Form 2A to the COGCC Must either obtain local agreement on a site or go through COGCC hearing Operator Registration Operators must register with county starting 5/1/16

20. Current Activity in Adams County

22. Current Activity Six sites fully approved Six sites seeking local and/or state approval Several other sites proposed conceptually, but no permits yet submitted – One such site is a Large UMA Facility (as defined by COGCC)

23. Current Activity COGCC definition of UMA: At least 22 building units or one high occupancy building unit within a 1,000-foot radius from the oil and gas location Two approved sites are COGCC-defined “Urban Mitigation Areas” (UMAs) – Ward Riverdale, 12 wells – Todd Creek Farms, 18 wells – First 2 UMAs approved in Adams County – To date, only 13 UMAs approved in the State

24. Current Trends

25. Permits for horizontal drilling are on the rise

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

27. Current activity further validates the trend No approvals at this point County-approved but not State-approved State-approved but not County-approved Fully-approved for drilling

28. Clustered sites are more intensive

29. Clustered sites reduces total sites in the area

30. Clustered site can be near “urbanized” areas

31. Wadley Farms 35 acre site Up to 20 wells Centralized location Surrounded by residential 6 - 8 months of drilling 20+ residences within 1000’ Within ½ mile of City of Thornton Urban Mitigation Area

32. Defining the Issue Changing technologies have created the trend for more intense development on a single site. This intense development has recently moved toward urban areas, changing the conversation on oil and gas development as new, unanticipated needs and concerns are raised.

33. Defining the Issue These needs and concerns are important. Yet Adams County’s current policies, procedures, and administrative resources are not designed to address these concerns and manage these new, intense developments in the most effective way possible.

34. Three Options Based on our understanding of the situation and the challenges it creates, staff has prepared three options for moving forward. A.Establish a local definition for urban oil and gas facilities; define new process for these sites B.Enact a temporary moratorium to rewrite regulations and evaluate the MOU C.Better utilize the existing MOU that was established in 2015

35. Option A Establish a local definition for “Urban Oil and Gas Facilities” Create site-specific mitigation standards for all new “Urban Oil and Gas Facilities” sites Create a new process for considering such sites that fosters public input Revise zoning regulations for Special Use Permits Expand the current permitting program to include additional staff and responsibilities

36. Option B Establish a temporary moratorium on UMAs as defined by COGCC No new Special Use Permits accepted during this time No MOUs to authorize such development during this time Existing MOUs modified to reflect any new requirements Establish a local definition for “Urban Oil and Gas Facilities” Rewrite regulations to enhance local process for such sites Expand the current permitting program to include additional staff and responsibilities

37. Critical Path if Moratorium Approved February & March AprilMay June – August September October & November Stakeholder Outreach Advertise Liaison and Inspector Position Stakeholder Outreach Develop policy alternatives for MOU and zoning Fill new positions Form a committee to review and revise policy alternatives Implement outreach and inspection programs Convene policy committee Finalize policies with committee Release results for public review Conduction regulation amendment and plan adopt process

38. Option C Better utilize provisions in existing MOUs Utilize the COGCC’s definition of “Large Scale UMA” Incorporate site specific review of large scale UMAs through MOU addendum per the new COGCC rules Expand the current permitting program to include additional staff and responsibilities

39. Under All Options Revisit existing MOUs Current MOU’s may be rendered inconsistent The County may negotiate amendments or withdraw from agreement -also- Decide action on “pending” MOUs

40. Questions