Colorado regulators approve plan to drill up to 166 petroleum wells at Lowry Ranch near Aurora Reservoir

State oil and gas regulators have given the green light to a comprehensive plan from Crestone to drill up to 166 petroleum wells near Aurora Reservoir, despite strong opposition from a nearby homeowner’s group and concerns that the plan was short on details.

“We are devastated by the commission’s decision to approve the Lowry Ranch Comprehensive Area Plan,” said Marsha Goldsmith Kamin, president of Save The Aurora Reservoir or STAR in a statement. “This is without doubt the wrong decision for the health, safety and environment of our community.”

The Colorado Energy and Carbon Management Commission, after considering and rejecting a request for an additional delay, voted 3 to 1 on Wednesday afternoon to approve the Lowry Ranch CAP, or comprehensive area plan.

The approval was conditioned on Crestone using electric-powered rigs and equipment at all pad sites rather than the three out of 11 it had gotten guarantees from Xcel Energy to supply. Electric rigs generate less noise and air pollution and are now common when drilling occurs near residential areas. Sound walls would add another level of noise mitigation.

Crestone must still win regulatory approval for individual pad sites and local approvals from Arapahoe County, and Kamin vowed that her organization would keep up its fight. But the CAP approval removes a major hurdle for Crestone.

Commissioner John Messner, who cast the dissenting vote, expressed concerns that Crestone left several important questions unaddressed, including wildfire mitigation, which has become a more pressing consideration after the 2021 Marshall fire in Boulder County destroyed more than 1,000 homes.

“I’m not sure the applicant has met the burden of proof in this application,” he told the other commissioners. In short, Crestone wasn’t comprehensive enough in its planning and seemed more focused on checking the boxes, Messner argued.

Wildfire mitigation plans aren’t required under state CAP rules and emergency response plans are typically addressed with local pad requests. Given the dry grass and high wind conditions in the area, STAR has expressed a concern about the fire risk.

Other concerns raised by opponents include the contamination risk to the Aurora Reservoir, potential seismic activity and disruptions to the Lowry Landfill, a 480-acre Superfund site at the northeast corner of Quincy Avenue and Gun Club Road owned by Denver. Crestone has addressed that last concern by agreeing to not drill under the landfill.

Increased road traffic in the area is another worry. Crestone plans to pipe its brackish “produced” water to a central location and then truck it up to Weld County to process, said Mike Foote, an environmental attorney representing STAR. More than 100 million barrels will be moved on local roadways.

Crestone, a subsidiary of Denver-based Civitas Resources, plans to drill up to 166 wells on 11 locations across about 32,000 acres.

The State Land Board owns most of those mineral rights on that land and will use proceeds to fund schools. Lowry Ranch represents one of the state’s most lucrative holdings with solar, farm and oil and gas leases, including 17 existing Crestone wells that have generated more than $200 million for state coffers.

The original mineral rights agreement with the state land board dates back to 2011, but opponents argue strong growth in the area has altered the conditions behind the initial approval.

Crestone, which obtained the mineral rights at a later date, filed its application 645 days ago and its plan has faced public scrutiny from multiple parties for more than a year, said Jamie Jost with Jost Energy Law, which is representing Crestone in its application.

Under state rules, only “impacted parties” are allowed to weigh in on an application, including homeowners living within 2,000 feet of a proposed well site. Only one home at Lowry Ranch met that condition and the owner has agreed to allow drilling. Two other homes are within 3,000 feet.

The ECMC made an exception and allowed STAR members to testify on the application despite a lack of legal standing to do so, she said.

Kait Schwartz, director of API Colorado, a petroleum industry trade group, said it was both “disappointing and revelatory” that despite meeting all the requirements outlined in state law, Crestone still faced significant resistance.

“Our operators are proud to produce in Colorado, yet it is disheartening to encounter such opposition even when the regulations and requirements are strictly adhered to,” Schwartz said in a statement.

Members of STAR viewed it differently, saying Crestone’s plan would impact them in multiple ways and that they deserve to be heard.

“Local residents and STAR raised dozens, if not hundreds of concerns with this CAP while expert witnesses pointed out many issues with its analysis, conclusions, and stated facts. In my opinion, this ECMC decision ignores or dismisses a vast majority of these concerns made by the community,” said Jason Ephraim, a resident of the nearby Southshore neighborhood in an email.