Oil, gas efforts take shape in county

Posted

While other areas of the state struggle with developing the administrative permitting process that accompanies oil and gas exploration, major oil companies have praised Arapahoe County for its open and collaborative efforts.

But as District 2 County Commissioner Nancy Sharpe detailed much of the history behind the process to residents at a July 20 town hall meeting hosted by Republican state Rep. Spencer Swalm of Centennial, she hinted at the notion that oil and gas activity in Arapahoe is starting to “look promising.”

“We’ve approved 33 wells since the use by special permit process was finalized,” she said, and while it’s still too early to know how much windfall the county would receive should production take off, Sharpe said it would most likely come in the form of ad valorem tax — a tax on the value of the fuel.

Under state law, the county would also be entitled to a share of the severance tax, which is a tax imposed by the state on non-renewable resources extracted or “severed” from the earth. Revenues from extracted minerals are split between the state and the county. The county would then divide its share among eligible municipalities.

Citing improvements in safety and production best practices, Sharpe said she is confident with how the county has laid out expectations for oil and gas exploration, particularly when it comes to things like spills.

“The smallest of spills must be mitigated,” explained Sharpe. “Even a spill the size of a water glass is still considered a spill and must be reported to the state.”

The county also has hired a new oil and gas specialist that will serve as the county’s eyes and ears in the field.

“The new specialist has completed the same safety training that state inspectors get,” said Sharpe. “Although our specialist is not certified to perform drilling inspections, she can certainly look at and understand the same things they are looking at.”

There is a total of about 1,200 wells within the county, said Sharpe. A little more than 1,000 of them have long been abandoned or sealed off.

Although interest in drilling seems to be growing in Arapahoe County, Sharpe doesn’t anticipate the number of wells to exceed 2,000.

Part of that reason is that the most practical areas to drill are in eastern unincorporated Arapahoe County. State setback regulations and local control of access point and roads become extremely complicated in more densely populated areas.