Former Colo. gov tells N.C. fracking regulators that 'social licensing' is key

During his term as Colorado governor from 2007 to 2011, Bill Ritter helped reform how the oil and gas industry is regulated in his state, which is in the midst of a drilling boom with over 49,000 active wells statewide. His efforts to ensure state regulations keep up with the fast-changing industry earned him criticism from oil and gas interests as being anti-drilling as well as from environmentalists who at times thought he was too deferential to the industry.

It was that middle-of-the-road position that garnered Ritter an invitation to address the N.C. Mining and Energy Commission (NCMEC) at its meeting in Raleigh yesterday. Vice Chair George Howard introduced Ritter as a "well-respected centrist," which, said Howard, is "what we want to be." NCMEC is currently in the process of crafting rules for hydraulic fracturing or "fracking" for gas in North Carolina, where the legislature lifted the ban on the controversial drilling practice earlier this year.

After deciding not to run for a second term as governor, Ritter went on to serve as the founding director of the Center for the New Energy Economy at Colorado State University. The center is a privately funded initiative that provides technical assistance to state leaders grappling with transitioning to new energy sources including natural gas. Ritter is also reportedly under consideration to serve as the next U.S. energy secretary.

After Ritter took office in January 2007, the Colorado legislature passed a law changing the composition of the state's regulatory body, the Oil and Gas Conservation Commission, seeking both greater partisan balance and wider representation from stakeholders including public health, natural resource and wildlife experts. The commission was then charged with rewriting and modernizing the rules governing the state's oil and gas industry.

"It was fairly contentious," Ritter said of the rule making process, with the industry feeling that reform was harmful to its interests.

Ritter and the commission worked with industry and environmental groups to find common ground. He reported that this went beyond listening to those groups behind closed doors but was a formal public process. The commission spent about nine months visiting communities where there were significant oil and gas reserves and inviting the public to comment on regulation. It filled hearing rooms everywhere it went, he said.

At the end of 2008, feeling it had won the support of most in industry and the environmental community, the commission published its revised rules -- among the strongest for fracking in the United States.

One of the most pressing concerns addressed by the rules is water contamination. Colorado now has some of the toughest rules among the states on casing requirements for oil and gas wells near aquifers. As a result, Ritter said, he does not believe there have been any instances in Colorado of aquifers tainted because of the fracturing process itself.

However, though Colorado also toughened requirements for managing fracking wastes above ground, there are still widespread problems with water contamination related to oil and gas drlling. An analysis of state data by The Denver Post found that oil and gas operations have contaminated groundwater in 17 percent of the over 2,000 spills and slow releases that companies reported to state regulators over the past five years. In one county with over 17,000 wells, 40 percent of spills have reached groundwater.

Ritter reported that one of the most contentious issues the Colorado commission dealt with was disclosure of chemical ingredients in fracking fluids. Colorado only settled the matter last December, after Ritter had already left office. The rule the commission adopted requires the most detailed disclosure of all the states -- but it still offers a loophole for ingredients that drillers consider trade secrets.

"The industry wasn't there on disclosure," Ritter told the North Carolina commissioners. "It's really important from a public perception point of view to include disclosure as part of rule making."

Among the other elements he said the rule making process needs to address is baseline and ongoing monitoring for air and water pollution and requirements such as setbacks that help minimize the impact of drilling operations on the quality of life in nearby communities.

All of those things -- disclosure, monitoring, setbacks -- relate to a theme that Ritter returned to repeatedly: drillers' "social license to operate."

It's a pressing issue in Colorado, where four communities -- Longmont, Loveland, Erie and Boulder County -- have passed resolutions banning fracking, according to Food & Water Watch. They're among some 300 local initiatives nationwide that aim to halt or curb fracking.

Last month, Longmont became the first Colorado town to codify into city law the fracking ban, passed by voters in November. Colorado's new governor, Democrat John Hickenlooper, has warned of a possible lawsuit by the state, which claims sole authority to regulate drilling. Meanwhile, the Colorado Oil and Gas Association this week sued Longmont over the ban.

Pointing to the moratoriums, Ritter told the North Carolina commissioners that it was critically important that the industry work with local communities to address concerns and win the "social license to operate" to prevent such a backlash.

"It's an unenviable position to be a governor and have to think about suing a town" over a moratorium, he said.

In wrapping up his presentation, Ritter reminded the commission that writing rules was only part of the solution for ensuring the oil and gas industry operates safely. Just as important is hiring an adequate number of inspectors to enforce the rules.

"No matter how strict your regulations are," Ritter said, "they're only as good as your enforcement."

(Photo of Gov. Ritter via the Center for the New Energy Economy website.)