Photo: An oil pump jack is pictured in the middle of a traffic circle at a new residential development in Weld County on June 24, 2020. (Andy Bosselman for Colorado Newsline)
This story by Jennifer Oldham appeared on Capital & Main on February 4, 2025.. We are sharing it in two parts.
A decision by Colorado state regulators to put two multiwell oil and gas proposals on hold showcased the growing influence of Denver-area antidrilling groups that have organized over the last decade in the face of large fossil fuel developments proposed on the outskirts of their suburban neighborhoods.
Colorado’s Energy and Carbon Management Commission in November rejected a controversial request by Extraction Oil & Gas Inc. to build a 26-well oil operation, known as the Draco pad, in fossil fuel friendly Weld County and use it as a platform to drill under the town of Erie, which has fought to keep its land free from gas and oil extraction.
In early January, the five-member body also denied for now an application by a smaller operator to construct a 20-well pad about 45 minutes to the southeast. The so-called Secret Stash project would have been drilled on a former bombing range that’s also slated for scores of additional wells.
If constructed, both developments would have been less than a mile from the fast-growing suburbs that ring the state’s capital. The decisions to block the drilling for now marked a milestone for community organizations that have lobbied the state’s oil and gas agency for years to move drilling operations farther away from their homes.
“I would suggest that before any of these are permitted that the commission and other agencies do a bit more homework and do some simple math,” Randy Willard, a 36-year resident of nearby Aurora, testified at the Jan. 8 hearing on the Secret Stash pad.
“They will see that the impact of Secret Stash does not stand alone and in fact adds to the impacts of the area considerably,” added Willard, who is among scores of members of Save the Aurora Reservoir, a neighborhood nonprofit group created to fight multiwell pads proposed within several miles of homes.
Both developments put on hold by state regulators underscored the challenges energy companies face in tapping lucrative shale deposits miles below the sprawling neighborhoods along the Front Range. As drilling moved ever closer to communities, state legislators enacted a unique law in 2019 that required the energy commission to prioritize health, safety and the environment over industry profits.
Capital & Main reached out to Civitas Resources Inc., the parent company of Extraction Oil & Gas, for a response. The company did not respond.
Extensive new rules outlined in a state Senate bill also required energy companies to provide officials with more information about how hydrocarbon extraction projects affect traffic, air emissions and water use. This additional data gives regulators more sway over how and when pads are constructed.
As written, Senate Bill 19-181 also gave greater authority to municipalities over oil and gas operations within their boundaries and required that community groups be allowed additional opportunities to influence the process.
The dramatic shift in Colorado’s fossil fuel regulatory environment, and the subsequent power it has given residents, is affecting the market value of oil and gas companies and causing operators to question the economics of doing business in the state, industry analysts said.
Civitas Resources Inc., the parent company of Extraction, whose Draco pad the commission placed on hold in November, is exploring the sale of extensive assets it holds in the region’s Denver-Julesburg basin, according to a January 15 report in Bloomberg News. The holdings reportedly include the Lowry Ranch Comprehensive Area Project, a 166-well project that led to the creation of Save the Aurora Reservoir.
“A potential sale would remove the market/investor stigma associated with Colorado, which is weighing on the valuation,” Gabriele Sorbara, an analyst at Siebert Williams Shank & Co. LLC, told Reuters.
“Investors do not want to touch Colorado-focused E&Ps,” or exploration and production companies.
Located feet from schools
The reasons Colorado’s energy commission gave for placing the Secret Stash and Draco multiwell projects on hold varied. On the Secret Stash pad application, state regulators asked the operator to clarify how many times it planned to drill on the pad and how many truck trips and air emissions would result from drilling on the site.
“It’s not clear what is being proposed,” Commissioner John Messner said. Multiple trips to drill on the site “also means additional truck trips, which means additional emissions, which means additional impacts.”
The company proposing the Secret Stash development, GMT Exploration Co. LLC, told the commission it wanted to start with several wells to determine the hydrocarbon production potential in the area.
“Initially it will likely be two to six wells,” Maxwell Blair, the privately held company’s regulatory manager, told the commission before it denied the project. “It’s not totally clear whether all 20 will be developed at this point.”
The commission asked that GMT rework its application to better specify air, water and other effects it expected to result from operations it planned at the site.
GMT did not respond to Capital & Main’s request for comment.
In Erie, the state’s energy commission ordered Extraction Oil & Gas Inc. to consider constructing the Draco pad on an alternate site within the picturesque town. That parcel, already home to 29 wells, two landfills and a Superfund site, would give the town authority to regulate operations that affect its residents, commissioners said.
“To me this application is very challenging,” Commissioner Brett Ackerman said at a November 15 online hearing about the original site in Weld County, next door to the town of Erie. “On one hand, it includes many best-in-class practices we often encourage, and on the other hand, there are multijurisdictional issues.”
Commissioners voted unanimously to put the plan on hold after an eight-hour hearing on the proposal spread over two days. The hearing included testimony from Erie residents who already have oil and gas wells in their backyards or feet from their homes or children’s schools.
Read P{art Two, tomorrow…