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Under pressure from Utah cities and counties, the oil and gas industry has asked the Legislature to withdraw a bill that would constrain local governments from regulating drilling.

Sponsored by Sen. David Hinkins, R-Orangeville, SB189 states regulation of oil and gas operations is of statewide concern and state authority "occupies the whole field of potential regulation."

But fears of unintended consequences prompted the bill's proponents to rethink the legislation, which had passed out of committee and is now cued up on the Senate floor, according to James Owen, legislative liaison for the state Division of Oil, Gas and Mining.

"They intend to spend the summer working on bill language and collaborating with cities and counties," Owen told the Utah oil and gas board Wednesday.

The bill would expressly reserve oil and gas regulation for the state, but would allow political subdivisions to enact local measures that regulate surface activity if the regulations are "commercially reasonable," do not "effectively prohibit" oil and gas operations and are not otherwise preempted by federal or state law.

No Utah city or county has tried to regulate drilling, but in other states local governments have passed ordinances restricting fracking, a method of extracting natural gas.

While it would be appropriate for local entities to regulate surface impacts, such as air emissions, wastewater handling, dust and noise, Utah Petroleum Association executive director Lee Peacock, a key mover behind the bill, said, down-hole operations are best left to state regulators who have the relevant expertise.

"We need to be extremely competitive in comparison with other states to be able to attract capital here," he told a Senate panel earlier this month. "We want to stay away from local decision that dramatically change a companies' planning on bringing capital to the state."

While supportive of the concept, however, the Utah Association of Counties saw problems with the bill, which the sponsor had conceded was hastily drafted.

"Their issue is with down-hole drilling, we don't have concerns with those issues, we have concerns with our land-use regulatory authority being preempted, which the bill as currently drafted may do," said Lincoln Schurtz, government affairs director. "We are all in unison with what is trying to be accomplished here."

Twitter: @brianmaffly

Twitter: @brianmaffly

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