WHAT THE FRACK? Or what hit the City and County of Broomfield when oil and gas came to town.

PATRICK A. QUINN, CPA Term Limited Mayor  Mayor City and County of Broomfield 2007 to November 2013  Certified Public Accountant  Worked with oil and gas industry throughout career with experience in North Sea, South China Sea, Orange River Basin Offshore South Africa and U.S. including the Denver Julesburg Basin right below us.  Citizen Activist for Open Space Committees in Boulder and Broomfield Counties.  Helped start Broomfield’s Open Space Program which now has over 7,000 acres of open lands.

OIL AND GAS EXPLORATION AND DEVELOPMENT THE PROCESS  Acquire the mineral rights  Split estate, so surface owner often sells mineral rights.  Determine if potential for oil and gas  We are in the Denver Julesburg basin so most of these wells are development not exploratory  Drill the wells  Often in pads drilling several wells at a time  Drilling rigs are large and intrusive  Current regulations allow drilling within 500 feet of existing structures  Complete and produce the wells

OIL AND GAS EXPLORATION AND DEVELOPMENT FACTS  482,822 producing wells in the U.S. as of December 2012  32,000 in Colorado  Broomfield is on the Southwest corner of Denver Julesburg basin, very prolific oil and gas production.  160 existing well sites in Broomfield, 97 currently producing  38 approved well sites no further action required  Fracking is the process of stimulating underground tight sands formations for production, in use for 40 years.  However, the intensity has increased in past ten years.

THE PLAYERS  Sovereign Operating Company LLC  Small, 4 employee oil and gas company  Acquired rights from surface owner, McWhinney LLC who are developing North Park in Broomfield  City and County of Broomfield  Planning and Zoning Commission (P and Z)  City Council  Local citizen activist groups-ad hoc  Our Broomfield  Our Broomfield Too  Formal organized groups state and national  Colorado Oil and Gas Association (COGA)  Environmental groups

GOVERNMENTAL REGULATION  Local government authority very limited  Look at site plans  Surface owner notification  Land use coordination  Address transportation issues  State and Federal Governments regulate Oil and Gas Operations  EPA  Colorado Oil and Gas Conservation Commission (COGCC)  Colorado Department of Public Health and Environment (CDHPE)

What Happened  Sovereign applied for Use by Special Review Permits from Broomfield for drilling 10 new oil and gas wells. Permit reviewed by P and Z:  Staff memo says “received a number of s.... Related to hydraulic fracturing of the wells, which is regulated by the COGCC.”  Staff memo says: “No key issues have been identified by staff”  Approved unanimously by Broomfield Planning and Zoning Commission  All previous wells had been approved without any controversy  Approval creates firestorm response  Citizen activist groups inundate council with comments at City Council meetings and s.

CITY COUNCIL RESPONSE  Council wants to be responsive and thoughtful  Initial learning/study session with COGCC and CDHPE  Town Hall meeting with over 100 attending, most asking for a ban  Hired experts from Colorado School of Mines and elsewhere  Had 5 additional study sessions, 2 executive sessions 3 public hearings  City Council objectives were to learn:  Can oil and gas drilling and production be done safely?  Can a city adopt regulations or develop a MOU that adopts best practices for drilling?  Will the oil and gas operators agree to such best practices?  Council concerned about “property rights.”  Final product is MOU and regulations exceeding state and local regulations in 30 different areas.

CITIZEN ACTIVIST’S RESPONSE  Disregarded the Council’s approach as they sincerely believed “we don’t know if fracking is safe”  Sought temporary “ban” from beginning  When council adopted MOU approach began petition process  With help of outside groups gathered 3,382 signatures to place on ballot  Question 300 mandates 5 year ban on drilling  Nothing required during 5 years, other than passage of time

OIL AND GAS COMMUNITY RESPONSE  Concerns about additional local regulations but mostly supportive of Council approach  COGA contributes nearly $250,000 to Our Broomfield Too and Broomfield Balanced Energy Coalition  Question 300 gets nationwide attention with articles in Wall Street Journal and New York Times.

ELECTION 2013  Over 20,702 ballots cast for Question 300  Compares to 12,508 ballots cast in last local election  Question 300 passes 10,361 to 10,341 by 20 votes  Registration changes at state level creates a mess  State requires 22 days residency  Broomfield requires 30 days residency to vote  Broomfield procedures didn’t fully capture information required  So election is now in the courts

THIS IS A FINE MESS YOU HAVE GOTTEN US INTO OLLIE  Court decides if election is valid  COGA has vowed to challenge 300 on state constitutional grounds if passes.  Five other jurisdictions have already adopted bans, Longmont, Boulder, Lafayette, Fort Collins and Boulder County  All five will likely be challenged by COGA and state

“I” STATEMENTS  After being immersed in the fracking debate for nine months I believe:  There are good operators in the oil and gas industry and there are bad ones.  COGCC and CDHPE are not effective regulators  Regulations and standards for drilling and production are a function of the state. However the location of drilling rigs should be a function of the local government.  There are “best practices” that can minimize the risk and improve safety and just plain inconvenience.  The state should adopt a lot of the practices adopted by Broomfield but recognizing that drilling in urban areas is different than Weld County  The 500 foot setback is arbitrary. Local governments should collaborate with operators to identify drilling islands. Technology allows operators to drill 2 miles from the target.  I do have concerns over property rights. Takings?

QUESTIONS????? What are your questions?