County regulations: fact and myth

by Jeff Madison
RBC I There has been a lot of discussion on the street these days about the effect that government regulations have had on the local economy. The primary focus has been on the assortment of federal agencies which, because of the abundance of federal lands in our county, oversee a high percentage of the activities locally. But since the county also has a regulatory role, the county often gets thrust into the conversation.
Even though the county has only a minor role in the regulatory landscape, the county commissioners have been working on streamlining the various county review processes. You may be interested in what Rio Blanco County government has been doing to streamline and simplify the county regulations that affect you and the energy companies at a local level.
We are told by the natural gas producers that it takes a market price of about $4 per thousand cubic foot (mcf) for Piceance gas wells to be profitable. Back in 2007, when gas wells and associated equipment were being developed at a record pace, natural gas prices peaked at nearly $12 per mcf with the average being around $8 per mcf. That was the driver for the energy boom we experienced five years ago.
Natural gas bottomed out (we hope) at $2.40 per mcf last week. With that market condition, it is not a valid assumption that a county process that takes 2-3 days, a state process that takes 90 days, or even a federal process that takes 90 to 120 days is the determining factor in the business decision to drill or not to drill a $3-4 million well. When the bottom dropped out of the market in 2008, all energy producing counties in the state saw a sharp decline in drilling. Many counties declined more than Rio Blanco County without regard to their regulation structure.
However small our influence, the County has been committed to keeping our regulations to a necessary minimum and been careful not to duplicate or interfere with state or federal oversight. One good example is the recently completed effort in which the county process for permitting new natural gas wells was streamlined and simplified. Through several months of discussion with representatives of the energy companies, we were able to cut the number of separate permitting requirements from 5-6 to one. Gone are the separate well permits, building permits, separate temporary living quarters permit, separate septic permit and the special use permit for the connecting pipeline. There is now one special use/building permit that covers everything on the well pad and takes county staff 2-3 working days to issue. This streamlining also allowed us to cut the costs to the applicant in half.
There are also some major efforts ongoing regarding other county regulations and the process is open to anyone that cares to attend. Last November, Commissioner Kai Turner approached county staff with the concern that we need to do a comprehensive review of the impact fees we charge for all types of new development. Some background: back in 2005 there was growing concern over the ability of the county to maintain the roads necessary for the ramp up in the natural gas business. A growing percentage of local property tax dollars were being spent on a few key county roads in the primary gas well areas with deteriorating road conditions in other areas showing the results of the diverted funds.
After a yearlong study and nearly a year and a half of discussion with gas producers, the impact fees were initiated by the Board of County Commissioners in 2008. Most of the money collected is designated for improvement to those key roads in the gas fields. Because of the nationwide slowdown, this funding source has also slowed. We are currently holding meetings with county staff and the gas producers to discuss possible modifications to the fees. The next meeting is scheduled for 1 p.m., Feb. 29, at the county administrative office.
Lastly, we are going through a complete re-write of the county’s land use regulations. This includes everything from special use permits to subdivisions to oil and gas regulation. We started this effort in January 2011 by creating a workgroup with diverse interests and are about half way through the process of producing a final draft the regulation package. Workgroup meetings are scheduled the first and third Wednesdays of every month from noon to 3 p.m. The drafts produced to date alone with the section currently being discussed are available on the county web page. Members of the public are welcome to be a part of the continuing process of revising the county land use regulations to make them as simple and efficient as possible.