Colorado Oil and Gas MOU Stakeholder Assessment

oil gas longmont photo

As fracking technology has enabled oil and gas companies increasingly to drill near communities, tensions involving industry, community advocates, state regulators, and local governments have escalated on Colorado’s Front Range. While local governments in western Colorado have had to find ways to address local concerns about the impacts of oil and gas drilling for years, the debate has reached a new level as production has moved to the populated cities on the east side of the Rockies.

Among the strategies used by local governments to address the impacts of oil and gas development are Memoranda of Agreement (MOUs) with operators to define how, and under what conditions, local development may occur. While the use of MOUs has drawn some mixed reactions from stakeholders regarding their efficacy, enforceability and transparency, MOUs have been increasingly utilized to address oil and gas concerns at the local level while avoiding lawsuits over the authority of communities to regulate oil and gas development.

What types of MOU provisions and processes have effectively addressed local concerns while reducing polarization over the issues? Which have done so less successfully? What have been the most significant challenges or barriers to the use of MOUs in this context? What are the greatest opportunities for using MOUs to build broadly supported outcomes? These are among the questions CDR is asking, along with the Intermountain Oil and Gas Best Management Practices (BMP) Project, originally a project of the Getches-Wilkinson Center for Natural Resources, Energy and the Environment at the University of Colorado Law School. With grants from the Rocky Mountain Mineral Law Foundation, Colorado Energy Office and others, the project will result in a searchable repository of Colorado oil and gas MOUs and the best management practices they contain, as well as a stakeholder assessment regarding the use of MOUs in Colorado.

For more information, please contact Ryan Golten or visit our energy practice page.

Trust Building: Moving Slow to Go Fast

Environmental Justice

“We, who participated in the mediation process, had an experience that none of us anticipated.  While we believed that we could form a ‘legal’ agreement, we gave little thought to personal relationships.  We started out as adversaries with firm positions, people who did not know one another, and began by treating each other as stereotypes.  However, during the process we began to learn about, know and value one another as people of integrity and good faith.  In the end we formed relationships based on mutual respect, understanding and appreciation.  In short, we became friends.  This was not a goal, it was a gift.  It was a lesson for life for all of us and is of much greater value than any legal settlement could ever be.”

Lorraine and Michael for the community organization

Joy and David for the chemical company

Background

In 1995 a toxic chemical (sodium chloride) was spilled at an off-loading terminal in a low-income community where a mix of industrial and residential use has created a number of challenges for residents of the neighborhoods.  The EPA agreed to a settlement with the responsible chemical company.  Neighborhood residents in the community where the spill occurred had organized meetings with city and State representatives to discuss this settlement.  This resulted in a recommendation to request a mechanism for contacting residents in the future, should another evacuation be necessary.

Although the EPA settled, the company was still responsible under the Emergency Planning and Community Right to Know Act (EPCRKA) to provide information about the spill to the affected residents in the community. This information was not provided, as required by the law and, two years after the spill, residents felt forced to sue the company.  However, residents were open to a settlement discussion, believing that communication and negotiation could possibly result in a satisfactory solution for all.  The company, which had positive experience with mediation in the past, was also interested in pursuing a mediated agreement.  After meeting in two one-day sessions, the parties reached agreement on all the issues, and the community organization that had filed suit agreed to have the suit dismissed with prejudice.

The affected community of 2200 homes was split in half during the 1960’s by the construction of two highways.  Over the past two decades, heavy industry has moved into the neighborhood.  61% of homes are owner occupied, many with two or three generations living in the community.  They are well organized and, due to the existence of many environmental hazards, have developed experience in working constructively (where ever possible), with companies who emit pollution into the environment.

In 1987 the community formed an Environmental Justice organization.  That organization has since grown statewide with over 500 members.  It was members of this organization that undertook the mediation with the chemical company.  The chemical company, itself, had also been seeking ways for developing better relationships with people in the communities where they are based.

Keys to Success

There were three primary factors that helped this process to succeed. First was the mediators’ determination, as a result of the pre-mediation interviews, that a fundamental issue was the development of relationship among the real parties to the dispute.  To that end, the logistics were arranged in such a way that the parties were near one another, across the table.  The mediators then structured the initial stages of the process to focus on personal communication among the parties, with little input from the mediators OR the attorneys.  By focusing on this fundamental, developmental theme, the parties began to build relationships, which sustained the process when it moved into more difficult negotiation on the practical, financial resolution of the conflict.

Second was the “slower is sometimes faster” principle, something CDR references often in our work.  The parties were asked to slow down, in spite of the urge to present (and respond to) monetary demands, we postponed settlement discussions until there had been an opportunity to understand how each group had experienced the spill and resulting perceptions of one another.  These frank discussions helped to humanize the situation and build mutual appreciation, creating a foundation for a productive negotiation on the settlement itself.

The third factor involved the roles played by the attorneys and the parties in the actual negotiations.  The parties took the lead in discussions, with their attorneys present to provide legal guidance.  This allowed direct, unfiltered expression of perspectives and concerns.  This was especially valuable because the direct conversations enabled the parties to build on the developing relationship, making tangible proposals and offers based on the real interests expressed by both sides.

Alfred P. Sloan and Cynthia and George Mitchell Foundation Fund CDR Assessment of Industry Best Practices

resourcesforfurture

Recently, we were happy to announce the receipt of a generous grant from the Alfred P. Sloan Foundation in cooperation with Resources for the Future (RFF) to conduct a third-party independent assessment of best practices in social performance and community engagement in unconventional energy development in Colorado and Pennsylvania. That project is now underway. RFF and CDR are excited to announce a second grant from the Cynthia and George Mitchell Foundation to add Texas to the research. The Mitchell Foundation describes itself as “an engine of change in both policy and practice in Texas, supporting high-impact projects at the nexus of environmental protection, social equity, and economic vibrancy.” Its mission is to “seek innovative, sustainable solutions for human and environmental problems.” The late George Mitchell pioneered the modern technology of hydraulic fracturing.

The RFF/CDR project will focus on case studies where industry practices in community engagement and social performance have shown success in addressing community needs and overcoming conflicts. The project will examine what practices are working, where and why they are working, what outcomes they produced, and whether the practices are transferable to other regions. The findings will provide the oil and gas industry with tools to improve their “social licenses to operate” within communities and will empower communities to engage more effectively with industry to better satisfy community interests.

The 18-month assessment will rely on community, industry, and government input to identify potential case studies and initial contacts that have direct experience with industry operators and community outreach staff. The research team is also collecting data on the social, economic and political makeup of communities where case studies are conducted to help determine whether such variables are factors in the effectiveness of industry practices. Industry transparency is also a critical component of the study and the willingness of industry representatives to openly share their practices and to allow the research team to critically evaluate them.

The project is led by CDR Senior Program Manager Todd Bryan. Dr. Bryan has conducted comprehensive assessments and helped groups overcome challenging conflicts for more than 25 years. He holds a Ph.D. from the School of Natural Resources and Environment at the University of Michigan.

For more information, please contact Todd Bryan or visit our energy practice page.

Final Indian Oil Valuation Rule Published

indian oil

CDR Associates is excited to announce that the Indian Oil Valuation Rule, which they facilitated development of through a two-year Negotiated Rulemaking Committee, has been published and will be effective on July 1, 2015. As Secretary Jewell stated, “the final regulations will ensure that tribal communities receive all the royalty they are owed from oil production on their lands, reduce administrative costs, and provide greater predictability to the oil industry.”

The committee was comprised of Tribal, Indian mineral owners, industry, and federal government representatives. There had been a number of initiatives, beginning in 1998, that attempted to resolve concerns with the Rule, and none were completely successful until this negotiated rulemaking. Discussions involved highly complex technical discussions that resulted in consensus on the concepts that form the basis of the Final Rule. For more information, please contact Chris Moore or Laura Sneeringer.

The Produced Water Conversation

Produced water

Produced Water is a term used to describe water that is produced in the fracking process.   CDR Associates has been working with stakeholders across Colorado to facilitate the conversation around produced water and its future uses, recycling possibilities and more.

CDR’s white paper on this process caught the attention of Colorado Public Radio and aided in a story being run this week as part of the Ripple Effect series.

You can read our white paper and check out the written and audio versions of the Produced Water episode of the Ripple Effect series.

For more information on CDR’s work on produced water, contact Ryan Golten, rgolten@mediate.org.