The U.S. state of Colorado’s oil regulator this week rejected a request by Occidental Petroleum Corp. to drill new oil and gas wells roughly 800 ft (244 m) away from homes, in a test of a new rule that sets a wide berth between drilling activity and residential areas.

The proposed site in Firestone, Colorado, was near where natural gas leaked from a pipeline owned by Anadarko Petroleum Corp. in 2017 and triggered an explosion that killed two people. Occidental acquired Anadarko in 2019.

Colorado in 2020 imposed a rule that requires new oil and gas wells be no closer than 2,000 ft (610 m) from residential areas and other buildings. The rule allows for companies to seek exemptions.

But the Colorado Oil and Gas Conservation Commission voted 4-1 to reject Occidental’s plan.

Occidental said it was “disappointed” by the decision and said its proposed development showed its commitment to safety standards that protect public health and the environment.

“Our partners in Firestone want us to operate in their town, and our next steps include reviewing all available options to develop the mineral resources Coloradans rely on for their energy needs,” the company said.

Environmental groups, however, applauded the decision.

“The oil and gas commission made the right decision to protect the people of Firestone and Frederick over corporate interests today,” Michael Freeman, an attorney for Earthjustice said in a statement this week.

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