Last month the Colorado Oil & Gas Conservation Commission (“COGCC”) held three days of public hearings on a series of proposed updates to its rules governing oil and gas wells. Among other things, the COGCC adopted new rules requiring drillers of hydraulically fractured wells to test nearby groundwater both before and after drilling — making Colorado the first state to require drillers to sample groundwater after hydraulic fracturing activities occur. At yesterday’s meeting, the COGCC voted 8-1 to raise the minimum distance between oil and gas wells and buildings, including homes, to at least 500 feet statewide. The new rules go into effect August 1, 2013.

Under the COGCC’s new rules, wells drilled in Colorado must be at least 500 feet from buildings. The rules also require mitigation efforts to reduce noise, as well as other restrictions on the use of pits and requirements for closed loop drilling systems in certain areas. The rules, however, do allow for operators to seek permission to locate wells closer than 500 feet.

Under the old rules, the minimum setback distance in rural areas was 150 feet with a minimum of 350 feet in urban areas.  Industry groups had argued for a minimum of 350 feet for all wells, while environmental groups pushed for 1,000 feet setbacks for homes, and 1,500 feet from schools. There are a number of exceptions in the rules, and operators may request variances from them, so it remains to be seen how the new rules will actually be implemented.

Our prior coverage of these rules can be found here. We will continue to monitor develops in Colorado that will impact shale development.