Governor Jared Polis, a Democrat, is expected to sign the bill passed by majority Democrats, into law.
The controversial measure, which proponents say is the most sweeping changes to regulations in energy-rich Colorado in decades, would give local communities more oversight over development in their jurisdictions.
The legislation requires the Colorado Oil and Gas Conservation Commission, which oversees the industry, to hire a full-time staff of experts who will evaluate drilling impacts to air quality, among other controls.
The bill’s sponsor, Democratic state Senator Steve Fenberg, said in a statement that the revamped regulations were “long overdue.”
“This bill will ensure that public health and safety are the top priority in regulating oil and gas development in Colorado, and will empower local governments with the tools they need to address the concerns of their individual communities,” Fenberg said.
Colorado ranks as the fifth-biggest state in the nation in crude oil production and sixth in natural gas production, according to the U.S. Energy Information Administration.
The Colorado Oil and Gas Association, an industry group which opposed the bill, last month released a study it commissioned that said oil and gas production employs 89,000 people and pours $1 billion in tax revenues to state and local government coffers.
The association said new rules could jeopardize what it called an “economic juggernaut.” The association said in a joint statement with the Colorado Petroleum Council after the bill’s passage that despite some amendments to the original bill that allayed some of the industry’s concerns, it still opposes the measure.
“State officials have committed to working with industry experts during the highly complex regulatory rulemakings following the bill’s enactment,” the statement said. “That will be critical to minimizing the bill’s negative impacts on our state, and we hope that process can begin immediately.”
Environmental groups that pushed the legislation hailed its passage.
“Coloradans can breathe easier today knowing that our state is finally on track to put the health and safety of workers and residents, and our environment ahead of oil and gas industry profits,” Kelly Nordini, executive director of Conservation Colorado, said in a statement.
Reporting by Keith Coffman; editing by Bill Tarrant and Leslie Adler