After 8 hours of testimony and deliberations over two days last week, the Colorado Energy and Carbon Management Commission (ECMC) voted unanimously on Friday to indefinitely stay a decision on the Draco Oil & Gas Development Plan (OGDP) in unincorporated Weld County, less than 500 feet outside of the Town of Erie.
The proposed Draco wellbores extend over 5 miles west through Erie and into Boulder County, and will hydraulically fracture and extract minerals underneath 4,500 homes. These wellbores also threaten 72 existing wells in the drilling & spacing unit (DSU) and many more nearby, prompting concern, outrage, and action from local residents. The Draco stay decision is cause to celebrate … right? Right?
Not so fast. Along with their stay decision, the ECMC Commissioners instructed Extraction Oil & Gas to re-evaluate Alternative Location 4, citing the 77 planned homes in Filings 3 and 4 at the Westerly development north of Draco that are within 2,000 ft of the surface pad.
I cried. My home is 2,050 ft from Alternative Location 4.
Why is Alternative Location 4 So Bad?
- We’ve been here before. In 2017, residents filed over 900 complaints with the ECMC about the drilling and completions operations at the Pratt and Waste Connections pads, the most ever for any site in Colorado. This collective trauma cannot be understated, it was awful.
- The site is contaminated. AL4 sits just south of the Neuhauser Landfill site, remediated as part of the EPA superfund program. Erie rejected plans to build homes here. Even Extraction doesn’t want to build here.
- No power. Extraction plans to use two electric drilling rigs with utility power to drill the 26 wells at Draco. No such infrastructure exists at AL4.
- No water. The project will require up to a billion gallons of water for its completion operations operations. Extraction also committed to using 42,000 gallons of recycled water per day from the Crestone Hub. New pipelines would have to be constructed to AL4.
How Can Alternative Location 4 Be Rejected?
- Erie denies rezoning to industrial. Erie oil & gas regulations state, “No Oil and Gas Permit will be finally approved […] unless the property where the Operation will be located is zoned as Heavy Industrial.” The property is currently zoned rural residential. Erie’s Town Council could deny the rezoning request.
- Erie denies O&G permit. Extraction would be required to apply for an oil & gas permit from the Town of Erie. The council may deny any application that is not protective of “public health, safety, welfare and the environment.”
- ECMC denies OGDP. Even if Extraction obtains the necessary permits from the Town of Erie, the ECMC commissioners could deny the drilling plan.
Complicating Factors
- Since its application to build homes at Redtail Ranch was denied, Stratus Companies will be motivated to negotiate with Extraction to use its land for AL4, or sell it outright.
- Extraction will argue “if the land is too contaminated for homes, does that not make it uniquely suited for industrial use?” This weakens Erie’s legal argument for denying the rezoning request.
- The Westerly developers will be happy to see the surface pad move further away from their residents, meaning fewer attorneys working against Extraction.
- This is a race against the clock for Westerly; they plan to build homes within the 2,000 ft boundary in three years. If Extraction spends too much time trying to negotiate with Erie to use AL4 and fail in that effort, they may also lose the opportunity to drill from the original proposed Draco site.
What Does It All Mean?
- The most likely outcome is that Extraction obtains a negotiation/permitting timeline from Erie and uses it to justify moving forward with the original Draco location, and will return to the ECMC for a new hearing in early 2025.
- Less likely: Extraction negotiates with Erie in good faith, and with countless hours of work, either the rezoning or the oil & gas permit is denied by the Town of Erie. Extraction moves forward with the original Draco location and a hearing in late 2025 or sometime in 2026.
For now, it’s a game of wait and see. What will Extraction choose to do next?