A contentious plan to drill up to 166 oil and gas wells on the southeastern fringe of metro Denver, near hundreds of homes and the Aurora Reservoir — a drinking water source for nearly 400,000 people — will finally land before state energy regulators this week for a key decision on its fate.

Neighbors worried about potential health and ecological impacts from the project want the Colorado Energy and Carbon Management Commission to say no to the plan after an extensive hearing that’s set to begin Tuesday. The oil and gas producer behind it hopes to install hydraulic fracturing operations at eight sites across Lowry Ranch in Arapahoe County over the next four years.

“The main problem is the effect on public welfare, safety and health,” said Marsha Kamin, who moved to Aurora’s Southshore neighborhood 18 months ago from Michigan. “We’re talking about thousands and thousands and thousands of people.”

As Colorado’s population has ballooned in recent decades, especially in Denver’s northern and eastern suburbs that overlay the mineral-rich Denver-Julesburg Basin, friction has grown between new and expanding neighborhoods and the oil and gas operations set up nearby. Six years ago, the evolving standoff led to an attempt by a citizen group to appreciably increase the required distance between wells and homes through a statewide ballot initiative. Voters shot it down.

Less than a year later, the legislature passed Senate Bill 19-181 and Gov. Jared Polis signed it into law. The law prioritized public health, safety and the environment when state officials consider oil and gas development — a profound change from the industry-focused approach Colorado had taken for decades with energy extraction.

Kamin and her neighbors, hundreds of whom are part of the Save the Aurora Reservoir advocacy group, are putting their hopes in Colorado’s five-year-old oil and gas reform law to halt the project. The group has been working to derail Crestone Peak Resources’ proposed fracking plan for the better part of two years.

“It’s disheartening that an industry can have this much power over people,” Kamin said.

But Lowry Ranch opponents may face a bumpy road this week, following a recommendation by the Energy and Carbon Management Commission’s director, Julie Murphy, that the board of commissioners approve the comprehensive area plan for the project.

In her final determination this month, Murphy wrote that Crestone’s plan “complies with all applicable requirements” in the ECMC’s rules.

The commission’s Tuesday hearing is scheduled to go all day, with a second meeting set for Friday if more time is needed. A decision to deny, approve or stay the plan is expected by week’s end, agency spokesman Chris Arend told The Denver Post.

If the overall plan wins approval, more hearings would be needed to consider individual well pads and wells, at both the state and county levels. Though the opponents largely live nearby in Aurora, Colorado’s third-largest city, the pads would be on state-owned land in an unincorporated part of the county just over Aurora’s city line.

While the ECMC approved more than 800 oil and gas wells in 2022 and more than 700 last year, it has denied applications to drill in recent years. In 2022, it said no to a plan from Kerr-McGee to drill 33 wells near a Firestone neighborhood. The commissioners’ main objection centered on 62 houses that would have been too close to a well pad, violating the state’s minimum 2,000-foot setback from homes and schools.

In January, the commission denied permits for 18 wells at Coyote Trails near the border of Erie and Broomfield.

Ann Hussain, who lives in Southshore with a sweeping backyard view of the Aurora Reservoir, said she learned about Crestone’s plans only in the spring. She worries that drilling under the reservoir could result in contaminants leaking into the body of water or into aquifers.

She also worries about air pollution generated at the well pads, one of which would lie less than a mile from a school. One of the eight pads, dubbed State Sunlight-Long, would be just 3,200 feet from her back fence. Thirty-two wells are planned for Sunlight-Long.

“I can’t believe you can take a community and set up an industry right outside these backyards,” Hussain said. “How is it that this can be done so close to people’s homes?”

Plan meets more expansive county buffer

The answer to that question lies in the state’s oil and gas rules, which permit drilling outside a 2,000-foot buffer from schools and neighborhoods. Last fall, Arapahoe County commissioners imposed even wider setbacks than what the state requires, mandating a 3,000-foot buffer between wells and occupied structures, landfills and reservoirs — both existing and planned.

That rule-making followed an attempt by project opponents in April 2023 to get Arapahoe County to impose a six-month halt on issuing new permits to energy companies to drill. The county commissioners voted 3-2 to reject a moratorium.

Rich Coolidge, a spokesman for Crestone parent company Civitas Resources, said not only does the Lowry Ranch plan comply with state rules, it also hews to Arapahoe County’s oil and gas regulations.

“The redundant safeguards and subsequent monitoring have shown that oil and natural gas development can safely occur without impacting groundwater and surface water sources,” Coolidge wrote in an email. “In fact, multiple layers of steel casing and cement underneath more than a mile of rock separate the wellbore from our state’s aquifers and surface water like the Aurora Reservoir.”

Crestone plans to drill 7,500 feet below the surface before running its wells horizontally. Coolidge said wells have “been drilled over a mile below tens of thousands of homes in the Front Range, with no impacts.”

Crestone will implement measures to mitigate impacts at its well sites, he said, including soundwalls, electric-powered drilling rigs, low-emission engines and low-odor mud during the drilling phase. Oil, gas and water will travel off-site by pipe, he said, “to reduce truck traffic during the production phase.”

Dan Haley, the president and CEO of the Colorado Oil and Gas Association, said the state’s 2019 oil and gas law was meant to “create the most environmentally protective rules in the country … without banning the production of this vital resource.”

“Arapahoe County, and others, have passed regulations that exceed the state’s already stringent protections,” he said, “and our members are meeting those high expectations and producing this resource cleaner and better than most anywhere in the world.”

Congressman focuses on Superfund site

But such assurances haven’t quieted concerns about the unique features at Lowry Ranch, a 26,500-acre sweep of prairie owned by the Colorado State Land Board.

The property encompasses the 480-acre Lowry Landfill, a Superfund site at the northeast corner of Quincy Avenue and Gun Club Road, where an estimated 138 million gallons of liquid industrial waste are buried. An underground plume of contaminated water has migrated several miles from what is considered one of the country’s most contaminated toxic waste sites.

Some of the proposed well pads’ proximity prompted U.S. Rep. Jason Crow to send a letter to the Environmental Protection Agency on July 15. He asked whether it had studied the potential for extractive seismic activity at the landfill and how that might impact “the safety of the Aurora Reservoir Dam and the reservoir itself.”

The Democratic congressman asked how the agency could “be certain the drilling will not cause fractures and instability that threaten the mitigation strategies EPA has in place at (the landfill).” He also inquired if the agency has considered expanding the boundaries of the Superfund site to include the underground plume.

Coolidge, from Civitas, said the company this year agreed not to drill underneath the Lowry Landfill.

“On claims around seismicity, there has been no reportable seismic activity caused by hydraulic fracturing in Colorado,” he wrote.

But Mike Foote, an environmental attorney representing Save the Aurora Reservoir — and a prime sponsor of SB19-181 when he was a state senator — said “drilling can cause earthquakes.”

The United States Geological Service says that while most induced earthquakes are not directly the result of fracking, they can be triggered by the “disposal of waste fluids that are a byproduct of oil production.”

“You don’t want to cause earthquakes, and Crestone hasn’t studied or addressed the issue anywhere close to adequately enough to allow them to drill,” Foote said.

Drilling could begin next year

Matt Sura, an oil and gas attorney who represents local governments and conservation organizations, said the five-year-old law was a critical step in more effectively regulating the energy industry and giving local governments a bigger voice in the process. Sura is not involved in the Lowry Ranch proposal.

“Senate Bill 181 required that there be public hearings on locations (of wells and equipment) and allowed the public to speak to the decision-makers, rather than those decisions (being) made administratively,” he said. “That was a huge sea change.”

Where there is still room for improvement, Sura said, is in state regulators addressing the cumulative impacts of oil and gas development, specifically when it comes to air pollution. The ECMC will start hearings on rules for that in mid-September.

“I’m hopeful the commission is going to be willing to set limits on oil and gas development and drilling — and the amount of pollution that can be emitted from the oil and gas industry,” he said.

But those rules won’t be in place this week when the ECMC meets to consider the Lowry Ranch comprehensive area plan.

The Front Range for years has been out of compliance with the National Ambient Air Quality Standards. In 2022, the EPA designated the nine-county northern Front Range region — including metro Denver — as being in “severe nonattainment,” triggering more federal regulations to clean the air.

That frustrates Kamin, the Southshore resident who watches wildlife move through the neighborhood on their way to and from the rolling hills of Lowry Ranch to the east.

“We’ve been a nonattainment area for years and they want to add more pollution to the area,” she said. “It makes no sense.”

If Crestone’s plan receives the blessing of the ECMC this week, drilling could begin as early as 2025.

Denver Post reporter Judith Kohler contributed to this story

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Originally Published: July 28, 2024 at 6:00 a.m.