Boulder County submits formal comments on Crestone's Third Draft Preliminary CDP to COGCC

Boulder County, Colo. - Boulder county submitted comments to COGCC on Crestone Peak Resources LLC’s Third Draft Comprehensive Development Plan on Friday, Jan 19. To review the county’s comment see **Boulder County's Comments**

Boulder County’s Comments to Third Draft Preliminary
Comprehensive Drilling Plan Elements

The
following comments are submitted on behalf of Boulder County by County staff
members. For ease of reference, staff submitting these comments will be
referred to below as “the County.” However, these comments are not the result
of a full review of any kind, including a review under the Boulder County Land
Use Code (“the Code”) by the Board of County Commissioners, which will be
required even if the Comprehensive Drilling Plan (“CDP”) is approved by the
COGCC. For purposes of the CDP process only, staff has compiled the following
comments on Crestone Resources Operating LLC’s Third Draft Preliminary
Comprehensive Plan Elements (“Third Draft”). The County reserves the right to
supplement or amend them at any time.

I. Crestone still has not demonstrated its right to extract the minerals
in the CDP.

In
its comments to the second draft CDP, the County argued that the CDP process
should be put on hold until Crestone meets critical threshold issues, one of
which is proving its right to develop the minerals it proposes to drill in the
CDP area. Crestone provided five lease documents with the Third Draft that the
County is reviewing, but Crestone has not identified how or under what terms
they obtained the rights to any of those leases. Moreover, the five leases
provided do little to support Crestone’s claim of “approximately 43% working
interest” ownership in the overall CDP area. The County again urges the COGCC
to require, immediately, actual proof of Crestone’s specific right to drill the
minerals it seeks to develop with the CDP before the final draft can be
accepted.

II. Crestone is overburdening County-owned open space
lands that are protected from development.

The
Third Draft proposes five large-scale facilities on three County-owned open
space properties. As Crestone and the COGCC are aware, Boulder County taxpayers
have invested millions of dollars over several decades to purchase and preserve
these open space lands for the very purpose of protecting critical
agricultural, ecological and recreational values. The newly proposed multi-well
locations and their associated completions pads, drill pads, facilities pads
and workover areas are all proposed in the Boulder County Comprehensive Plan’s
East County Environmental Conservation Area and designated for rural
preservation in the Boulder County Countywide Coordinated Comprehensive
Development Plan Intergovernmental Agreement (“Super IGA”) among Boulder County
and seven municipalities. The specific
multi-well pad proposals sit on:

(1)
the Wheeler property (Section 1), which was very
recently purchased for $8,000,000 after being on the County’s open space
acquisition list for decades in part due to its 15 acres of sensitive wetlands
and 55 acres of riparian features at the confluence of two important waterways
which provide potential restoration habitat for the federally endangered
Preble’s meadow jumping mouse, as well as to prevent flood damage by keeping
flood-prone lands free of development; (2) the Vicklund property (Section 2),
which is designated as Significant Agricultural Lands of National Importance
due to its highly arable, irrigated farmland; and (3) the Haley property
(Section 3), which is also highly prized, irrigated cropland. All three open
space properties’ agricultural, ecological and cultural value will be virtually
wiped out by the large-scale facilities proposed, which will obliterate their
agricultural uses essentially permanently.

The
County joins and emphasizes Colorado Parks & Wildlife’s (CPW) comments
regarding South Boulder Creek and Coal Creek on the Wheeler property and their
importance as Aquatic Recovery and Conservation Waters. The County also
endorses CPW’s requests and recommendations for specific wildlife surveys
before any construction or preparation activities take place.

In
addition to existing preserved open space and conservation easement lands,
several jurisdictions have long-existing plans for recreational trails through
the area near the large-scale facility proposed on the Wheeler open space
property.

While
the County sees potential value in the CDP process to evaluate a larger area to
determine the optimal sites for surface development with respect to all
relevant considerations, Crestone is not able to select the optimal sites in
the 12 square mile CDP area because it cannot find a way to access significant
surface area currently controlled by other competing operators. For example, the only reason Crestone has
given for not seeking sites on
privately owned land to the north of the Highway 52 corridor is that Extraction
Oil and Gas owns mineral rights in some of those areas and Crestone has been
unable to reach any agreement with Extraction and, to the County’s knowledge,
the surface owners. The COGCC should not countenance the obstruction of the
kind of comprehensive planning promised by Rule 216 on this flimsy basis.
Furthermore, Boulder County taxpayers and residents should not be burdened, nor
should publicly- owned land preserved for its significant values be destroyed,
due to Crestone’s inability to acquire surface rights in other parts of the
CDP.

III. The Third Draft locates a larger facility (56 wells)
in an identified floodway and critical wetlands areas.

The
County pointed out in its last set of comments, and notes again, that the
former proposed multi-well location on the Wheeler open space property is
within the properly measured floodway (as
opposed to the floodplain). The floodway is the portion of a floodplain that
will actually convey the bulk of the flood flow, while the floodplain will
experience stagnant or lower velocity flow. See,
e.g., 44 C.F.R. 59.1 (defining “regulatory floodway” as the “channel of a
river . . . and the adjacent land areas that must be reserved in order to discharge the base flood”) (emphasis
added). Thus, the floodway poses significantly more hazards to development than
the remainder of the floodplain.

Approximately
seven years ago, the Colorado Water Conservation Board, a sister agency to
COGCC within the Department of Natural Resources, adopted a six-inch water rise
measure to delineate floodways. Exhibit A depicts the former one-foot rise
floodway (darker purple) and the updated six-inch rise floodway (lighter purple
with hatching) surrounding the large-scale facility proposed on the Wheeler
open space. It is clear from Exhibit A that even the outdated, more
conservative measure of the floodway covers the 56 well site proposed on the
Wheeler open space property and the newer floodway delineation encompasses the
entirety of both pads. The former proposed 36-well site on the Wheeler open
space parcel was partially within only the six-inch rise floodway, and the new
56-well proposal has moved the critical above-ground equipment more deeply into
the floodway as defined under any measurement.

During
the 2013 Flood in Boulder County, the existing, single Wheeler G Unit #1 well,
located close to the newly proposed multi-well pads, took enough damage that
the storage tank leaked hydrocarbons.
Containment berms were heavily damaged at four well sites and six sites
were inundated along South Boulder Creek. Yet, in this particular stream reach,
the 2013 Flood represented only a 50-year event, even though it was more
significant in western areas, meaning that events equivalent to the 2013 Flood
and much larger are likely to reoccur frequently in the area purchased as the
Wheeler open space.

Because
of its floodway and floodplain designations, the Federal Emergency Management
Agency (FEMA), through the Community Rating System (CRS) which is a national
program developed by FEMA, gives credit points to Boulder County for preserving
the Wheeler property as open space. The CRS
Coordinator’s Manual spells out the credits for community activities and
programs that go above and beyond the minimum requirements for participation in
FEMA’s National Flood Insurance Program (NFIP) and encourages state, local, and
private programs and projects that preserve or restore the natural state of
floodplains and protect their functions. Specifically, CRS credits communities
because of program priorities as described below:

• Goal 3 ‘Foster comprehensive floodplain management’ of ‘Goals of the Community Rating System’ – beginning on page
  110-111. “The CRS recognizes local
  efforts that protect lives; further public health, safety, and welfare;
  minimize damage and disruption to infrastructure and critical facilities;
  preserve and restore the natural functions and resources of floodplains and
  coastal areas; and ensure that new development does not cause adverse impacts
  elsewhere in the watershed or on other properties.”
• ‘Other Program Priorities -- Natural Floodplain
  Functions’ –page 110-112. “The CRS provides special credit for community
  activities that protect and/or restore natural floodplain functions…. When kept
  open and free of development, floodplains provide the necessary flood water
  conveyance and flood water storage
  needed by a river …. When the floodplain is allowed to perform its natural
  function, flood velocities and peak flows are reduced downstream.”
• Preserving Open Space – Activity 420’ described
  beginning on page 420-421. “Floods are
  natural processes and floodplains are necessary to every river and coastal
  system. Floodplains can also be regarded as the land needed by a river or
  stream to convey and store flood waters … Preserving the floodplain as open
  space allows it to serve these primary natural functions and many other important functions. Keeping the
  floodplain free of development… means that …. the community can return to
  normal quickly after flooding occurs.”

(CRS Coordinator’s Manual: https://www.fema.gov/media-library-data/1493905477815-d794671adeed5beab6a6304d8ba0b207/633300_2017_CRS_Coordinators_Manual_508.pdf)

COGCC
rules address only mitigation measures relevant to the less-hazardous
floodplain area and are inadequate to protect such sensitive infrastructure in
the floodway. With the entire CDP area under consideration, there is no reason
for proposed placement on the Wheeler site. Regardless of the area under
consideration for the CDP, siting large-scale oil and gas facilities in the
floodway should be avoided.

In
addition to floodway concerns, other water-related issues are raised by the new
double multi-well pads on the Wheeler site.
The massive pads are squarely in a large wetlands area, which is
ecologically and geologically sensitive and should not be disturbed. As stated
below, the maps Crestone is using omit numerous water bodies, including ponds
and irrigation ditches that have been in place for decades, and cannot be
relied upon, which means none of the related proposals can be fully analyzed.
None of these issues are referenced in the narrative.

IV. The Third Draft proposes large pads too close to numerous homes.

Even
while over-burdening County open space, the new proposals are also unacceptably
close to numerous homes, including the entire Crystal Views platted subdivision
and the individual farmsteads south of Hwy 52. Several individual homes appear
to be within or right at the minimum 500’ setback. If Crestone had the mineral
ownership or surface control it needs to make the CDP effective, it would not
need to encroach so intensely on existing residences where incessant and
significant impacts from oil and gas development and disruption to residents’ lives
will be severely experienced. As long as any other options are available, such
disruption must be avoided.

V. The Third Draft proposal will entail severe
agricultural interruption and fails to identify critical irrigation ditches.

All
of the proposed large-scale facilities currently proposed sit on active
agricultural lands. All are large enough to effectively wipe out all or a
significant amount of the production on the parcels. Farmers lease these sites from the County and
make their livings from their products. The reasonable accommodation doctrine
does not allow Crestone to use these sites to effectively prevent any
agricultural uses on these prime farmlands and destroy the livelihoods of
individual farmers. Moreover, Crestone has
made no response to the County’s earlier and repeated concerns about
accommodating irrigation systems, if any such activities could continue at all
near such massive pads.

Secondly,
the Third Draft does not adequately identify existing irrigation ditches and
ditch laterals. Many identified “streams” and “stream crossings” on Crestone’s
Attachment C are actually ditches and ditch crossings and many ditch or lateral
crossings are simply not identified. These important crossings cannot be
adequately designed and constructed to accommodate irrigation if they have not
even been identified.

Finally,
the newly proposed well pad on the Vicklund open space requires that the
Leggett Ditch company be added to the list of entities that must be contacted.

VI. Crestone proposes to make excessive use of surface
locations to drill minerals from
miles away.

While
the leases provided with the Third Draft are relevant to the newly proposed
sites, Crestone has neither demonstrated how it has obtained rights under those
leases nor how those leases give Crestone the right to construct massive 28 and
56 well pads on particular parcels to extract pooled minerals from two or more
miles beyond such sites. The leases supplied grant the right to use the surface
to extract minerals under those sites or from other sites unitized with those
leases. They do not grant the right to use so much of any given surface as is
necessary to drain a four-square-mile area. The County is not aware of a legal
rule or principle that requires a single parcel to accommodate all the drilling
a leaseholder wants to do as far in any direction as technology allows. Until
Crestone can prove that it owns the leasehold interests it asserts and that its
leasehold rights allow it to place massive, multi-acre facilities on a given
parcel, such proposals should not be approved.

VII. The Third Draft leaves the majority of earlier comments unanswered,
fails to use updated information and is therefore not adequate to lead to a
final draft as contemplated by the COGCC timeline.

The
County acknowledges that Crestone made changes to its proposed locations in the
Third Draft that were suggested by some stakeholders, but it wholly ignored
significant and specific problems with former drafts and did not respond to
requests for corrections and further information from numerous commenters,
including the County. Crestone made no direct response to any of the specific
comments offered on its second draft.
Numerous comments on the first draft have yet to be acknowledged or
answered.

Some
of the most important issues that Crestone has not addressed are: pipelines are
still not identified as above or below ground; there is still no mention of
sensitive plant species and how they will be identified or protected; there has
been no estimate of truck trips required to transport waste and wastewater; the
County provided a list of Planned Unit Developments in the CDP area including
Crystal Views NUPUD in close proximity to where one of the multi-well pads has
been relocated in this third proposal, but the Third Draft says Crestone is
“continuing to determine whether there are any PUDs in the CDP area;” Crestone
has continued to stay silent on its plans to obtain water for drilling and
completing; the topographic maps Crestone is using are badly outdated and lack
significant water bodies and updated wildlife information; and, critically,
Crestone has still not identified any of the variances that it foresees to
Rules 303, the entire 1000 series and “other applicable rules,” leaving the CDP
wide open to major modification by variance at any point in the development process.

In the Third Draft, two of the maps at Attachment C
appear to show a well pad outside the CDP area to the south, south of Jasper
Road. No development outside the CDP should be part of CDP consideration, and
if Crestone has mineral interests in that area, they should be developed from
the pads proposed as part of the CDP.

Stakeholders
have spent dozens and possibly hundreds of hours commenting on Crestone’s first
two drafts and Crestone’s failure to acknowledge the bulk of those comments and
questions undercuts the value of the stakeholder process. Even if the answer is
“these matters will be addressed at a later stage,” commenters deserve some
response.

VIII. Final comments.

For
all the reasons stated, together with the comments in the County’s responses to
the first and second drafts, it seems unlikely that the Third Draft can become
an acceptable final draft in the current timeline. The County appreciates
COGCC’s willingness to adjust the timeline as necessary and hopes that it will
do so again if the next draft is not ready to be deemed final.

To review Boulder County's comments on the first and second draft CDP’s, visit Crestone tab on the oil and gas website.

For all county-related oil and gas activity, visit Boulder County's Oil and Gas Development webpage: https://bouldercounty.gov/property-and-land/land-use/planning/oil-gas-development/

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