Showdown looms between drilling, homebuilding as Colorado communities look at keeping them apart

A showdown that has been building for several years on Colorado’s High Plains could come to a head as cities and counties take aim at trying to make room for two of the state’s major industries: homebuilding and oil and gas.

The state recently approved new buffers, or setbacks, that drillers have to maintain between new wells and homes to tamp down conflicts along the northern Front Range. The area is home to a growing population and the vast majority of the state’s roughly 50,000 active oil and gas wells.

But what if new home construction encroaches on well sites? In that case, cities and counties are flipping the concept of setbacks by restricting how close new homes can be built to existing wells and well sites that have been approved but not drilled yet.

Local governments, including Commerce City, Broomfield, Erie and Larimer County, have approved or are considering what are often called reverse setbacks.

Homebuilders, scrambling to meet demand in the Denver area’s booming housing market, are urging Erie to reject bigger setbacks for new houses, saying they could lead to a loss of future homes and “millions in future fees and tax revenue” for local governments.

The Colorado Oil and Gas Association said the biggest problem with the debate around reverse setbacks is “the use of fear as a political weapon” rather than understanding the safeguards practiced by the industry, Dan Haley, the trade group’s president and CEO, said in an email. The result is unnecessary unease and continued skyrocketing housing costs, he added.

But a member of the Broomfield City Council said a 2019 study by the Colorado Department of Public Health and Environment showed that people living within 2,000 feet of well sites face a risk of short-term exposure to harmful emissions. And Jean Lim said the city has its own information about impacts based on health complaints from residents.

Last week, the Broomfield council approved a 2,000-foot setback between new residences and oil and gas sites under construction or in the early stages of production. The ordinance won’t apply to already built homes or ones planned in a previously approved development.

“I believe that it’s the first priority of an elected official to protect the health and safety of future residents as well as current residents,” Lim said.

To Lim, that means making sure new homes aren’t built close to existing or planned well sites and near old, shutdown wells. Wells that have been plugged and abandoned might still need work or could end up leaking methane, like one under a street in a north-Broomfield subdivision.

“It seems to me that if this could happen here, and it’s my understanding there are orphaned wells all over the Front Range, this could happen in any number of neighborhoods,” said Melissa Aune. Her house in the Anthem Highlands subdivision is about 200 feet from an old well that was dug up, re-cemented and is being monitored for methane releases.

A 2019 law that overhauled how oil and gas is regulated made it explicit that local governments could regulate several aspects of oil and gas. While the Colorado Oil and Gas Conservation Commission has made wide scale revisions to rules, it’s up to cities and counties to regulate where new residential and commercial development goes under their authority over land use.

Local regulations

Broomfield exercised that authority to approve a 2,000-foot setback from well sites in the pre-production phase. Pre-production includes construction, drilling, fracking and flowback, when groundwater and fluids used in fracking are brought to the surface and disposed of. High emissions of chemicals and health complaints from the public often occur during that time.

Broomfield and Erie are considering shorter setbacks for new homes and other buildings in the vicinity of wells that have been operating for a while and for plugged and abandoned wells.

Commerce City’s setback for new residential development is the same as for new oil and gas sites: at least 1,000 feet.

“Commerce City is one of the fastest growing communities in Colorado, currently permitting around 1,000 new residential units each year,” city spokesman Travis Huntington said in an email. “The city enacted this provision to ensure maximum health, safety, and welfare protections were in place for its residents.”

Proposed rules in Larimer County include 1,000-foot setbacks between new residences and existing or planned well sites. Smaller buffers would be required for wells that have been producing for a while because emissions are typically lower as production declines.

Weld County, which has nearly 19,000 active wells, requires a setback of at least 500 feet for new well sites. New homes must be at least 350 feet from existing well sites with smaller setbacks for agriculture development.

Jason Maxey, director of the Weld County oil and gas energy department, said the county isn’t looking at changing the setbacks with the exception of the distance between new development and plugged and abandoned wells. There have been discussions about possibly expanding it to 50 feet from 25 feet.

Adams County is revising its oil and gas regulations, but isn’t considering reverse setbacks at this time, spokeswoman Christa Bruning said in an email.

Encroaching development

Late in 2020, state regulators increased the distance new oil and gas sites have to be from homes to 2,000 feet from 500 feet, with caveats. The exceptions include if a property owner or tenants sign a waiver allowing the well site to be closer and if the COGCC decides, after a hearing, that the company’s planned safeguards are “substantially equivalent” to the protections of a 2,000-foot setback.

On the other hand, the authority to determine how close new residential development can be to existing or planned well sites lies with cities and counties, not the state.

“You’ll see these limitations that are necessary to protect health and safety, to keep new oil and gas away from existing housing. But then all of a sudden, these local governments turn around and there’s nothing to keep new houses away from existing oil and gas facilities. It’s not like the impacts change based on who got there first,” said Andrew Forkes-Gudmundson, deputy director of the League of Oil and Gas Impacted Coloradans.

The oil and gas site across the road from Geoff Winterbourne’s home in Erie was there first. He just didn’t know it.

“When we first moved in September, none of the infrastructure was in place,” Winterbourne said. “To us, looking out our backyard, it looked like an open field, just like an open space with natural grasses.”

Now, roughly 950 feet from his property, is a multiple-well pad, one of three in the field on the edge of the Colliers Hill neighborhood. The well sites were approved in 2017 and 2019, but Occidental Petroleum paused work when the pandemic hit and oil prices sank. When work resumed in February, drill rigs were moved in, along with tanks, compressors and a lot of other equipment. Big trucks began frequent trips to the area.

Winterbourne and some of his neighbors have voiced concerns about noise and the emissions. Weld County and COGCC officials have said Occidental is complying with the rules.

A question Winterbourne often gets is why he moved next to a well site. He said the only time oil and gas came up when he was signing papers to buy the house was a notice that he didn’t own the mineral rights under his property, which is common.

“As a responsible developer, I would have a map up in my model homes, showing what oil and gas infrastructure exists and is planned in and around the community,” said Christiaan van Woudenberg, a member of the Erie Board of Trustees.

The board is looking at expanding the minimum setback of 350 feet between new homes and well sites. Van Woudenberg wants to increase it to 2,000 feet with shorter buffers for established sites and inactive wells. He wants homebuilders to notify prospective buyers as early as possible about oil and gas activity, planned and existing.

During a recent public meeting and in a letter, the Home Builders Association of Metro Denver said increasing the reverse setbacks will “make new housing units even more expensive, further exacerbating Erie’s housing affordability challenges and pricing more middle-income residents out of the market.”

The association, which represents more than 400 builders and others in the industry, said it supports additional disclosure requirements about oil and gas activity.

“The conversation I’ve had to have with just about every developer that comes before the board is you can either operate an oil field or you can operate a thriving community, but you can’t have both,” van Woudenberg said.

Orphaned well

An old well that was turned off and plugged is a timely example of what communities looking at reverse setbacks want to avoid. The COGCC and contractors dug up the well, originally plugged in 2004, after tests by Broomfield found elevated levels of methane underground in the Anthem Highlands subdivision. Broomfield is proactively testing the soil around the roughly 100 plugged and abandoned wells in the city at the cost of about $200,000 a year.

The COGCC got involved in late 2019 after Broomfield’s test “came up hot,” said Mike Hickey, supervisor of the agency’s orphan well program, which handles wells with no owners. After determining the methane was leaking from the old well, crews dug up a part of the street it was under, dug 16 feet down to find the head of the well and put in new cement to plug it.

Methane, a main component of natural gas, had collected in small open spaces underground. The COGCC put in vents to disperse the methane. The developer, Richmond American Homes, wants to keep building on the site and just completed two large underground trenches to speed up migration of the methane so it can be vented into the air.

Richmond Homes declined to comment on the well or its work in the neighborhood.

Tami Yellico, director of strategic initiatives for the city and county of Broomfield, said the concern was the build-up of methane underground. The COGCC and Broomfield continue to monitor the gas levels. The state said the methane above ground doesn’t exceed normally occurring levels.

Natural gas leaking from a severed underground pipe was blamed for a house explosion that killed two people in Firestone in 2017. Yellico said there are no flow lines at the Broomfield site.

“We’ve got some follow-up testing to do, but basically we think the residual gas has been removed and I’m in the process of filing the paperwork to close this one out,” Hickey said.

But Yellico said Broomfield is holding onto the permits for the houses that Richmond Homes wants to build along each side of the reconstructed street until the COGCC is sure the system is working.

Aune, whose house is “a stone’s throw” from the area, said she is still anxious about the well because it’s unclear to her how the city will determine there are no risks to the neighborhood.

“I don’t feel like I have gotten an answer that has really been sufficient to put my mind at ease. I do feel like I hear  a little bit different story from everyone,” Aune said. “I live here with my three children and my two dogs and my two cats and my husband. My No. 1 priority is their safety.”

Map: Colorado oil and gas well permits

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