Penry Gardner

General Assemblrz State of Colorado Denver August25, 2009

Mr. David Neslin Director COGCC lI20 LincolnStreet,Suite801 Denver,CO 80203 DearDavid: Over the courseof the past year,Coloradohaswitnesseda dramaticdeclinein the numberof for drilling permits.As a result,we haveseenthousandsofjobs andmillions of applications dollarsin investmentleaveour state. There'sno questionthat the economicstormthat hasswept acrossthe nationhasimpactedenergyproductionin everystate.But, Colorado'senergysector hasbeendealta secondblow in the form of restrictivenew rules and regulationsthat have createdhigherhurdles,and more onerousobstaclesfor job producingenergycompanies,making a bad situationmuch worse. An articlepublishedlast month in the DenverBusinessJournalrevealedthat a recentsurveyof Oil and GasexecutivesrankedColoradoas the leastattractivestatefor oil and gasinvestment, down from the top rankingjust two shortyearsago.One executivewas quotedas saying, "operational,legal,and air qualityrulesand regulationsarebeinginstitutedat a dizzyingpace.It is hardto keepup with as an operator".Adding to this problemis the reality that onceall of the roadblockshavebeencleared,and companiesare finally eligibleto obtaina drilling permit, it expiresafterjust one year. Colorado'senergysectoris vitally importantto the long term stabilityof our state'seconomyas it is a majorproducerofjobs, and a reliablesourceof homegrowncleanenergy.As such,we would encouragethe COGCC to help createsomelevel of long term certaintyfor companies wantingto investin Coiorado'scleanenergyeconomyby extendingthe shelf life of the Applicationfor Permitto Drill (APD) to two years,with an option to extendthe permit for an additionalyear beyondthat. This frameworkis not unheardof, as it is more conservativethan the standardusedby the Bureauof Land Management.

Changingthis rule will opennew lines of credit,and attrastweary investorswho might otherwise declineto put forth the time and effort necessaryto overcomeColorado'sregulatoryhurdlesfor a one yearpermit. We will continueto oppose,and work to repairsignificantaspectsof the new oil and gasrules,but we seethis policy changeas an opportunityfor Coloradoto signalthat we are not happy with our standingas the worst statefor oil and gasinvestment,and that we are seriousaboutrecoveringfrom the dramaticlossesin the energysector. If the COGCC doesnot seethe utility in this change,we would ask for a detailedexplanationfor its rejection.Further,if the decisionmadeby the COGCC is in fact that this rule changeis not needed,it is our intentionto takelegislativeactionthis comingsessionto addressthis situation. We thank you in advancefor your consideration,and look forward to your response. Sincerely,

/rl--

JoshPenry SenateMinority Leader

a-1 Cory Gardner StateRepresentative

Cc: Director Harris Sherman,Departmentof Natural Resources