GREELEY — The official audio recording of a land use hearing before the Board of Weld County Commissioners contradicts statements made by company officials that DCP Midstream did not withdraw an application for a compression station near Kersey because of Senate Bill 19-181.
Complete Colorado reported late Monday that DCP had withdrawn its permit application after a company official reported such to the Board of Weld County Commissioners just hours before the commissioners testified on the bill at the Capitol.
In testimony on Monday before the House Finance Committee concerning the fiscal impact of Senate Bill 19-181, which would make sweeping changes to how oil and gas drilling is regulated in Colorado, Weld County officials said DCP withdrew its application from Weld because of uncertainty surrounding the new regulations connected to SB 181.
“If you don’t believe us, we had our first casualty today” Commissioner Chairwoman Barbara Kirkmeyer said in her testimony to the House Finance Committee. “In our land use hearings today, we had an applicant withdraw a application for about a $350 million compressor plant. And the reason they withdrew it was because of the regulatory uncertainty of Senate Bill 181.”
By Tuesday morning, DCP officials were denying the claims.
“It’s my understanding he did make reference to regulatory uncertainty, but not a direct reference to Senate Bill 181,” DCP spokeswoman Sarah Sandberg told Complete Colorado Tuesday evening about remarks by DCP Attorney Patrick Groom, who has represented the company with Weld since it initially filed the application. “But in this political environment, we can understand how these dots were connected. But this has nothing to do with 181.”
Sandberg also said the company had no plans to pull out of Weld County. Complete Colorado has reached out to Sandberg again since the audio surfaced and will update as necessary.
“We had several potential plans that we were looking at as it related to compression as it was relevant to (a currently approved) plant, and we are just pursuing other compression alternatives at a different location,” Sandberg said. “It’s a very small piece of an overall project that we’re solving at an alternative location.”
Although $350 million was the estimated financial impact to Weld County, the actual amount is unknown, as DCP has not filed an application for a new location, and it is unknown what the effects of withdrawing this facility will have on the bigger picture. The producers affiliated with it are unsure if they will be able to drill if SB 181 passes, Groom told commissioners.
The facility was a piece of a larger project, known as the Bighorn plant, that connects pipelines across the county around Greeley to move oil and gas. It included: “A Natural Gas Compressor Facility, one up to 100 feet in height secure communications tower, a temporary laydown and storage yard, up to eight construction office trailers and sixteen (shipping/storage) containers for use during the construction of the facility.”
Sandberg said that a new location for would also be inside Weld. However, because the USR was withdrawn, the company will have to start from the beginning with any new site, costing more time and money.
“It’s not changing anything we were planning to do, other than the geographic location,” she said.
Wednesday, reports that Kirkmeyer lied in her testimony before the Finance Committee began circulating in various media outlets. However, based on the official land use hearing audio tape obtained by Complete Colorado, Kirkmeyer’s remarks were accurate.
“In light of market conditions today, and regulatory uncertainty, DCP has determined that there is no need for compression at this time at this location,” Groom told the BOCC. “Rather than go though a hearing … and obtain a USR for a plant that DCP is not certain to build … DCP is requesting to withdraw the application for the USR at this time.”
The full audio of the meeting is about 3 minutes and 49 seconds. It can be found here.
When asked by Commissioner Sean Conway to clarify his remarks and whether “regulatory uncertainties” was in reference to SB 181, Groom is heard directly tying the withdrawal to Senate Bill 181.
“The producers are uncertain with their drilling plans,” Groom said. “As a result of that, that impacts the contracts DCP has. DCP cannot predict or anticipate the volume of gas that’s going to be produced in light of that bill and other regulatory issues as well.”
Conway then asks Groom a second time if DCP’s withdrawal is evidence that SB 181 would have an impact on drilling procedures, Groom tells the board it is.
“In my opinion, there clearly is,” Groom said. “And this is an example of that.”