#Colorado’s battle over regulating fracking shifts to ballot — the Fort Collins Coloradoan

Directional drilling from one well site via the National Science Foundation
Directional drilling from one well site via the National Science Foundation

From the Associated Press (Dan Elliott) via the Fort Collins Coloradoan:

Colorado’s battle over who should regulate fracking — and how much — now shifts to the November election after the state Supreme Court overturned attempts by local governments to impose their own rules.

The court ruled Monday that a ban on fracking in Longmont and a five-year moratorium in Fort Collins are invalid because they conflict with state law. State officials and the industry argued the state has the primary authority to regulate energy, not local governments.

It wasn’t the end of the debate, however. Coloradans face a loud and fierce campaign over fracking this fall if activists succeed in getting any constitutional amendments on the ballot to restrict oil and gas drilling or give local governments the authority to do so.

“We’re taking them as a serious threat to responsible oil and gas development in the state of Colorado,” said Karen Crummy, a spokeswoman for an industry-backed group called Protecting Colorado’s Environment, Economy and Energy Independence.

“We consider all of these measures to be a ban on fracking,” Crummy said. “We’re going to fight.”

Backers of the proposed constitutional amendments also vow a fight, saying Monday’s ruling injects a sense of urgency into their cause.

“It can only help us because it shows that communities don’t have many rights right now when industry wants to drill,” said Tricia Olson of Yes for Health and Safety over Fracking, which hopes to get two measures on the ballot.

Fracking, or hydraulic fracturing, has long been a contentious issue in Colorado, the nation’s No. 7 energy-producing state. Fracking injects a high-pressure mix of water, sand and chemicals underground to crack open formations and make it easier to recover oil and gas.

Combined with other drilling techniques, it opened up previously inaccessible oil and gas reserves and boosted the economy, although low oil prices have led to widespread layoffs and a steep decline in drilling.

Critics worry about danger to the environment and public health from fracking spills and leaks. Others say around-the-clock noise, lights and fumes from drilling rigs make their homes unlivable as oilfields overlap with growing communities.

The industry says fracking is safe and that drilling companies take steps to minimize the disturbances.

Restrictions on fracking were proposed for Colorado’s 2014 ballot, but they were withdrawn because of fears they would lead to a huge Republican turnout and hand several close statewide races to the GOP.

Gov. John Hickenlooper promised to convene a task force to address the conflicts caused by drilling, but fracking critics were disappointed by its recommendations, and the industry said regulators went too far in implementing them.

This year, the presidential election will have a bigger impact on turnout than the fracking proposals, said Floyd Ciruli, a nonpartisan Denver pollster. But fracking could influence races in the Legislature, where Democrats have a narrow majority in the House and Republicans have a narrow edge in the Senate, he said.

“I do think that at the legislative level where relatively small shifts in turnout could be a big thing, it could be very important,” Ciruli said.

Some of the proposed constitutional amendments would clamp specific restrictions on the oil and gas industry, such as minimum distances between wells and homes. Others would grant local governments more regulatory power. Because they’re constitutional amendments, they would supersede Monday’s Supreme Court ruling.

Olson’s group and others are still gathering petitions to get their amendments on the ballot. If they succeed, they will face a well-financed campaign to defeat them.

By the end of last year, the pro-industry group, Protecting Colorado’s Environment, Economy and Energy Independence, had $746,000 on hand, according to state records.

Two groups supporting the constitutional amendments to restrict fracking reported they had less than $15,000 combined on hand this spring. Their reports covered a different period than the industry group’s.

“What we know is that industry has already been advertising nonstop,” Olson said. “What we know is they will put everything against it. But what we also know is that we have very few options left to protect Colorado’s health, safety and welfare.”

From The Durango Herald (Peter Marcus):

The issue does not directly impact La Plata County, where there is no ban or moratorium on oil and gas drilling activities. But it stands to guide future actions.

“The Supreme Court’s decision does not mean that the local control issue is going away,” said La Plata County Commissioner Gwen Lachelt, a Democrat. “Local governments need the ability to plan and ensure that oil and gas development occurs away from schools and neighborhoods.”

Some observers say the ruling reaffirmed local governments’ land-use authority, since it stated only that bans and moratoriums interfere with the state’s rule-making.

La Plata County in 1992 had a stake in determining that authority, when the Supreme Court upheld the county’s authority to regulate land-use impacts of oil and gas development.

In separate unanimous written rulings Monday, the Supreme Court declared a fracking ban in Longmont and a moratorium in Fort Collins illegal, stating that the voter-approved actions conflict with state law.

“This ruling sends a strong message that bans are not the way we do business in Colorado,” said Christi Zeller, executive director of the La Plata County Energy Council.

She underscored that La Plata and the Colorado Oil and Gas Conservation Commission have “robust” rules that have been re-written dozens of times over several decades.

“The reality is political decisions take away private property rights, they restrict and hinder business, and they disrupt the economy, here in La Plata County, and in other counties and cities in the state,” Zeller said.

Bruce Baizel, a Durango-based energy program director for Earthworks, called the Supreme Court’s ruling disappointing, but not surprising.

“It kind of pushes things back into the political realm in terms of initiatives,” Baizel said. “They (the Supreme Court) explicitly said it doesn’t matter if drilling or fracking negatively impacts residents, and the state has decided it’s not going to address that.”

Justice Richard L. Gabriel, who wrote the court’s opinion, said justices were not charged with weighing the economic advantages or health risks associated with fracking.

“This case … does not require us to weigh in on these differences of opinion, much less to try to resolve them,” Gabriel wrote.

Groups are readying ballot initiatives for November that run the gamut, including allowing local governments to ban fracking and increasing the distance of well setbacks.

“It makes absolute sense that it would strengthen those folks’ resolve to get a measure on the ballot,” Lachelt said of the ruling.

She co-chaired a task force that convened in 2014 to address the local control issue.

“I’ve expressed my disappointment that the task force didn’t adequately deal with the issues,” Lachelt said. “But just because we have a Supreme Court ruling doesn’t make this issue go away.”

Gov. John Hickenlooper, a Democrat who convened the task force as part of a compromise to avoid ballot initiatives at the time, defended the work of the panel.

“The work of the task force amplified the role of local governments in siting large oil and gas facilities and built a stronger connection between state and local regulators,” the governor said in a statement.

Attorney General Cynthia Coffman, a Republican, doubts the high court’s ruling will quell controversy.

“I fear today’s ruling will not end this divisive debate and instead some activists will continue to push anti-development initiatives undermining the state’s record of local cooperation on these policy issues,” Coffman said.

Lauren Petrie, regional director of Food and Water Watch – which helped with several initiatives across the state – said much of the opposition is just beginning.

“Today’s decision deals a devastating blow not just to Longmont residents, but to all Coloradans who have been stripped of a democratic process that should allow us the right to protect our health, safety and property from the impacts of this dangerous industrial activity.”

From the Fort Collins Coloradoan (Jacey Maramaduke):

The Colorado Supreme Court on Monday struck down Fort Collins’ five-year fracking moratorium, a long-awaited decision that could have statewide implications for the controversial oil and gas recovery method.

The court also ruled against Longmont’s voter-supported ban on hydraulic fracturing, the widespread practice of injecting a high-pressure mix of water, sand and chemicals underground to break open formations and recover oil and gas.

In its first judgment on local fracking bans and moratoriums, the court called both laws “invalid and unenforceable” because they’re preempted by state law.

Fort Collins voters supported the moratorium in 2013, and Longmont’s ban was voted into place in 2012. But the Colorado Oil and Gas Association sued both cities in separate cases and won in the lower courts, resulting in the bans being thrown out.

Both cities appealed the lower court’s decisions, and the state appeals court in August asked the Supreme Court to take the cases. The high court heard oral arguments for the cases in December.

ANALYSIS: What’s in Larimer County’s fracking fluid?

The Fort Collins and Longmont cases represent an ongoing debate in Colorado and beyond about whether the ultimate right to regulate the oil and gas industry should belong to states or municipalities. The city of Fort Collins spent about $191,000 on outside counsel defending the citizen-initiated moratorium in court. COGA spent about $1 million fighting the Fort Collins and Longmont laws, along with a fracking ban in Lafayette and moratorium in Broomfield.

There are currently no active wells or permit-pending wells in Fort Collins. One oilfield extends into the northern edge of Fort Collins, but it’s been at least three and a half years since a well was fracked there.

What’s next?

Fort Collins and Longmont can’t appeal the decisions to the U.S. Supreme Court because they aren’t a matter of federal law. The city of Fort Collins hasn’t yet announced its next steps, if any.

In a statement, Fort Collins city attorney Carrie Daggett said it’s “premature” to comment until the city has carefully reviewed the high court’s decision.

“These issues are complex, and we’ll thoroughly examine the decisions relative to Fort Collins and Longmont,” she said.

Citizens for a Healthy Fort Collins, which campaigned for the ballot measure that installed the moratorium, wrote in a Facebook post that the group will meet in two weeks to discuss next steps. The group had not replied to the Coloradoan’s request for more information by mid-afternoon Monday.

COGA leaders said they were pleased that the court sided with them in their view that local fracking bans and moratoriums are illegal in Colorado.

“This is not just a win for the energy industry, but for the people of Colorado who rely on affordable and dependable energy and a strong economy,” COGA President and CEO Dan Haley said in a press release. “It sends a strong message to anyone trying to drive this vital industry out of the state that those efforts will not be tolerated.”

Longmont’s City Attorney’s Office will meet in executive session with the Longmont City Council on Tuesday night to review the court ruling, according to a city press release.

Broomfield, which faced a COGA lawsuit similar to Fort Collins’ for its voter-initiated, five-year fracking moratorium, stalled the lawsuit in anticipation of the Colorado Supreme Court decision. Monday’s rulings will likely lead to the invalidation of that moratorium, along with a five-year moratorium in place in Boulder and unincorporated Boulder County.

The city of Lafayette didn’t appeal after a district court judge struck down its fracking ban in 2014.

Mixed reactions

City of Longmont

“The case did not end as the city hoped, but we respect the Supreme Court’s decision,” Longmont Mayor Dennis Coombs said in a press release. Coombs noted that Longmont’s other oil and gas regulations, including no drilling in neighborhoods, mandatory groundwater monitoring and setbacks from riparian areas remain in place.

U.S. Rep. Jared Polis, a Democrat whose district includes Fort Collins

Polis called the decision “a blow to democracy and local control” in a statement.

“Now that the law has been interpreted, it’s up to the state legislature or the people of Colorado to act to protect our neighborhoods and homes,” he said. “I look forward to continuing to help advocates in these efforts to protect our communities.”

The representative also submitted an amicus curiae brief to the court siding with Fort Collins. Through his attorney, Courtney Krause, Polis argued that Fort Collins’ moratorium was a valid land use regulation.

Colorado Rep. Mike Foote, a Democrat whose district includes Longmont

In a press release, Foote said he was disappointed about the decisions but noted that they reaffirmed local governments’ land use authority.

“Cities and counties may need to modify their approach somewhat,” Foote said, “but it’s clear that the Court has reaffirmed that local governments do have a seat at the table when it comes to oil and gas development.”

“And “in cases where local control isn’t recognized, we as legislators have the ability to step in,” he added.

Colorado Attorney General Cynthia Coffman

In a press release, Coffman said that local fracking bans “undermine the interests of the state as a whole.” But despite the court decisions, the fight might not be over yet, she said.

“Sadly, I fear today’s ruling will not end this divisive debate and instead some activists will continue to push anti-development initiatives undermining the state’s record of local cooperation on these policy issues,” she said.

Boulder County Board of Commissioners, which passed a moratorium on fracking in unincorporated areas of the county until July 2018

The high court decisions are specific to the communities named in the lawsuits, an unidentified board representative wrote in a press release, so the impact of the decisions on Boulder County will need further analysis.

“Like all other Colorado communities that regulate oil and gas development, we need to take a close look at our existing regulations before we take any action to change our stance on fracking in unincorporated Boulder County,” the release said.

Conservation Colorado

In a press release, Conservation Colorado executive director Pete Maysmith called the decisions “disappointing” and said that local governments should be able to call a timeout on drilling while they examine its impacts.

“These decisions … show that the oil and gas industry’s threats of litigation are a hammer that the industry has no qualms about wielding against local governments if they decide to engage in land use planning,” he said in the release. “In order to combat this hammer, local governments must be empowered with better tools to protect their citizens from heavy industrial drilling.”

Colorado Petroleum Council

The Colorado Petroleum Council welcomed the decisions for upholding the state’s primacy in overseeing oil and natural gas permitting and curtailing “arbitrary bans” on fracking that could cost local jobs, deprive state and local governments of tax revenue and limit access to energy resources, according to a CPC press release.

“Today’s decision protects private property rights, which are a main driver for the energy renaissance in this country,” executive director Tracee Bentley said in the release. “The U.S. was counted out as an oil and natural gas superpower, but with states like Colorado leading the way, the U.S. defied the odds to become the world’s largest producer of natural gas and a world leader in crude production.”

Advancing Colorado, a political advocacy group that supports fracking and the production of coal and natural gas, among other things

“Today’s ruling protects Colorado’s robust energy portfolio and energy independence, and sends a strong message to the deceptive anti-energy extremists,” executive director Jonathan Lockwood said in a statement. “The Colorado Supreme Court is protecting our democratic process and their ruling will help protect our health, safety and property from the attacks of dangerous special interest groups.”

Interior official looks toward Roan — The Grand Junction Daily Sentinel

From The Grand Junction Daily Sentinel (Gary Harmon):

The Roan Plateau is high on Interior Secretary Sally Jewell’s list of issues to be resolved in the remaining months of the Obama administration.

Jewell recently discussed the next 100 years of conservation and a “course correction” before the National Geographic Society.

The Interior Department has “some work left to re-examine whether decisions made in prior administrations properly considered where it makes sense to develop and where it doesn’t,” Jewell said. “Or where science is helping us better understand the value of the land and water and potential impacts of development. Places like Badger Two-Medicine in Montana, or the Boundary Waters in Minnesota, or the Roan Plateau in Colorado.”

Jewell’s comments, however, left some Colorado officials questioning whether they signaled a change in the direction of the management of the Roan.

The Bureau of Land Management is completing an environmental study of the area. BLM, industry and environmental groups and local governments in late 2014 reached an agreement to cancel 17 of the 19 leases issued on the plateau in 2008. The remaining two leases on top and 12 leases at the base of the plateau were to remain in place.

Jewell was referring to the plan now under study by the BLM, the Interior Department said…

The Roan Plateau was managed by the U.S. Department of Energy as an oil shale reserve until 1997, when President Bill Clinton signed legislation transferring the area to the BLM.

The act required the BLM to manage the area for multiple use and instructed the agency to begin leasing it for oil and gas development.

“We hope the secretary’s mention of the Roan Plateau bodes well for the future of the area,” said Luke Schafer, West Slope Advocacy director for Conservation Colorado, urging the BLM to complete the management plan “to protect the pristine lands, rare species, and remarkable habitat on the Roan.”

The directive to lease the area, however, remains, said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association.

Jewell’s “policies may contribute to compliance with that law taking decades rather than years,” Ludlam said, “but for the benefit of future generations we will never stop advocating for the responsible development that must and someday will occur on the Roan Plateau.”

Proposal creates ‘monumental’ friction — the Valley Courier

Rio Grande del Norte National Monument via the Bureau of Land Management
Rio Grande del Norte National Monument via the Bureau of Land Management

From the Valley Courier (Ruth Heide):

Proponents of an expanded national monument met with water leaders and some resistance on Tuesday in Alamosa.

Rio Grande Water Conservation District (RGWCD) Board Member Dwight Martin , who lives in the southern part of the San Luis Valley where the proposed expansion would occur, was clear in his opposition to expanding the existing Rio Grande del Norte National Monument northward from New Mexico into the San Luis Valley.

“I am adamantly opposed to this monument designation ,” Martin said. “We really don’t need this monument in Conejos County. I really don’t see what it serves.”

He added that the Conejos County commissioners are also opposed to the monument expansion. Martin said about 90 percent of Conejos County residents at a meeting he attended on the monument were opposed to the expansion, and he questioned why the expansion was needed.

Anna Vargas, project coordinator for Conejos Clean Water, the organization promoting the monument expansion, responded that the meeting Martin attended was a meeting hosted by opponents .

“There has been interest in supporting the national monument, and there has been opposition that has been raised,” Vargas said. “We have tried to address all the concerns.”

Vargas told water board members on Tuesday that Conejos Clean Water had accepted language recommended by the water district to safeguard water rights within the monument, if it is expanded into the Valley. The language also recognizes the existing Rio Grande Natural Area, which lies in the proposed monument expansion.

“We are not trying to trump any of the work that’s been done on the natural area,” Vargas said.

Vargas recently completed the intensive water leadership course sponsored by several water groups including the Rio Grande Water Conservation District. She said the course gave her a better understanding of water issues and rights, such as the Rio Grande Compact. She said she had not viewed the monument expansion as affecting water rights but as more of a land protection issue . She said she now understood the potential problem implied water rights could generate.

“We don’t want national monument designation to have any implied water rights,” she said. The goal of the monument expansion, she said, is to preserve the land for traditional uses.

The Rio Grande del Norte National Monument, encompassing 242,500 acres, was designated by presidential proclamation in 2013. The expansion proposal would bring the monument north of the New Mexico state line into the southern part of the Valley and would encompass about 64,000 additional acres of Bureau of Land Management (BLM) land, Vargas explained.

She said the goal would be to preserve traditional uses such as piñon and wood gathering, hunting, fishing and other recreational uses. The monument would also prevent the land from being sold or leased for mining extraction. The turquoise mine would be “grandfathered in,” she said.

Vargas said proponents of the monument expansion want to be proactive in protecting the land from oil and gas activity.

“To us, that is a threat,” she said.

In 2007 that threat was real, she said, with four oil/gas sales involving 14,500 acres in the San Luis Hills and Flat Tops. The reason drilling did not occur, she added, was “basically because of a loophole” created because private landholders had not been notified of the sales.

“What we don’t want is a repeat of that,” she said. There might not be a loophole to prevent it in the future, she added.

Martin said, “This is really about oil and gas and not about protecting the land. All the monument will do is make it more restrictive for landowners.”

Vargas said that is why Conejos Clean Water is trying to get more community input and address these issues. She said there are rumors that the group is trying to prevent such uses as cattle grazing, but that is not the case. Such traditional uses are what the monument would protect, she said.

The land would continue to be BLM property, public lands, she said.

“We want it to stay publicly accessible.”

“Thank you for recognizing the concerns the district expressed,” RGWCD Attorney David Robbins told Vargas.

The district also sent a letter to the Department of the Interior and Colorado’s congressional delegation expressing the district’s concerns about the monument expansion without terms and conditions that would ensure water resources and the Rio Grande Natural Area are not adversely affected. The Rio Grande Natural Area, created through a federal, state and local partnership, integrates the management of federal and private properties along the Rio Grande between Alamosa and the state line to protect the riparian corridor for several purposes including Rio Grande Compact deliveries.

The district’s letter to congressmen regarding the monument expansion stated: “Every federal withdrawal or designation carries with it an implication that sufficient water will be made available to support the purposes of the designation unless specifically disavowed. The flows of the Rio Grande and the Conejos rivers in this area of the San Luis Valley are intimately tied to the economic and social health of the entire region, and reflect 150 years of water use practices that support the entirety of the San Luis Valley’s population as well as a water management structure designated to allow Colorado to freely utilize its share of the Rio Grande and its tributaries pursuant to the Rio Grande Compact. Any new federal land use designation that could impact or interfere with the water use practices in the San Luis Valley or Colorado’s ability to utilize the water resources to which it is entitled must be strenuously resisted by our elected federal representatives , as well as all of our state officials . This matter is of enormous importance.”

Representatives of the district also personally met with congressmen and Deputy Secretary of the Interior Mike Connor.

The district presented language protecting the Rio Grande Natural Area that it requested be included in the monument designation, were that to occur, and Conejos Clean Water has agreed to that language.

Robbins said the Valley’s congressmen and Department of Interior also assured the district they would not move forward with a monument expansion unless the district’s concerns were properly addressed.

Business voices come out in support of Clean Power Plan — GreenBiz #keepitintheground

Solar panels, such these at the Garfield County Airport near Rifle, Colo., need virtually no water, once they are manufactured. Photo/Allen Best
Solar panels, such these at the Garfield County Airport near Rifle, Colo., need virtually no water, once they are manufactured. Photo/Allen Best

From GreenBiz (Barbara Grady):

Tech titans Apple, Google, Microsoft and Amazon as well as global brand companies Ikea, Mars, Adobe and Blue Shield Blue Cross Massachusetts told a U.S. court Friday that they need the federal Clean Power Plan for economic reasons.

In two separate Amici Curiae briefs filed in U.S. Circuit Court supporting the EPA’s plan for reducing carbon emissions from the nation’s power plants by 32 percent, the corporate giants said without a “national carbon mitigation plan,” they face “undesirable business risk,” energy price volatility and higher costs.

With these arguments, the businesses seem to have flipped prospects for the Obama administration’s centerpiece climate change policy, which only a month ago looked dim after the U.S. Supreme Court ruled to delay its enforcement.

Since the eight companies collectively employ about 1 million people, account for nearly $2 trillion in market capitalization and are major energy consumers — the tech companies alone use 10 million megawatt hours of electricity a year — they have clout.

Their briefs refute some claims made by 27 states that are plaintiffs in the State of West Virginia, et al vs. U.S. Environmental Protection Agency case challenging the Clean Power Plan as an overreach of federal authority by the EPA in a way that would harm jobs and raise electricity prices.

Among the companies’ most interesting refutations? Their expansion plans depend partly on how they can procure low-carbon electricity.

Mineral owners assert property rights #keepitintheground

Directional drilling from one well site via the National Science Foundation
Directional drilling from one well site via the National Science Foundation

From The Denver Post (John Aguilar):

At a contentious meeting in Adams County in January that carried on until the early-morning hours, several mineral rights owners stood up before the commissioners and lambasted a proposed 10-month drilling moratorium as an abrogation of their property rights.

In late February, a group of mineral owners appeared before a state House committee to support HB-1181, a bill that would require communities that ban drilling to compensate mineral owners for lost royalties.

And on Tuesday, those who own minerals are being encouraged to attend a Greeley City Council special meeting in which the council will consider an appeal from Extraction Oil & Gas to drill up to 22 wells on the city’s west side. The plan was turned down by the city’s planning commission earlier this year in the wake of strong public resistance.

“It’s all about protecting the economic foundation of our country, which is private property rights,” Smith said. “The issue is this is my property, and I have every right to realize the benefit of that property right.”

That right, she said, is enshrined in the very fabric of the state constitution and reflected in Colorado’s long history of mining.

No simple line

But Rep. Michael Foote, D-Lafayette, said the issue is not that cut and dried. Where one person’s property right ends, he said, another’s begins.

Foote was one of five Democratic legislators on the State, Military and Veterans Affairs committee to vote to kill HB-1181 on Feb. 24.

“It can’t just be that someone has mineral rights and they say they can exploit those rights any way that they see fit,” he said. “You have surface property owners who are losing value in their homes when drilling is done right next door.”

Foote characterizes the clash of property rights revolving around oil and gas activity as a “big issue” playing out across the state. It has even reached the Colorado Supreme Court, where the high court is set to decide in the coming weeks on how far a local community can go in limiting oil and gas development.

Emily Hornback, a community organizer with the Western Colorado Congress, has spent the past few years advocating for residents of Battlement Mesa. They worry about the impacts of a plan by Ursa Resources to drill 53 natural gas wells in the neighborhood.

In December, the company got special use permits from Garfield County but still must get approval from the Colorado Oil and Gas Conservation Commission before moving forward.

Hornback said residents of the 5,500-person community, many of whom are retirees, fear for their property values in the face of heavily industrialized activity on their doorstep.

But they don’t have the political power as an unincorporated community to do much to mitigate the impacts, she said.

“For the adjacent landowner, the world appears against them and they don’t have much legal recourse,” Hornback said. “Whose property right is winning and whose property right is losing?”

Doug Saxton, a retiree who has lived in Battlement Mesa for 11 years, said his wife has asthma that is exacerbated by emissions from oil and gas activity.

Saxton said with the dramatic advances in horizontal drilling technology in the last few years, Ursa should be able to get to the natural gas deposits under Battlement Mesa — and in turn pay the mineral rights owners for their assets — from a much farther distance.

“They have tremendous technology they like to brag about,” he said, “and they ought to be using it when they’re going to impact this many people.”

Key issue

Lance Astrella, a Denver-based attorney who has represented landowners and mineral owners alike, said providing “reasonable” access to minerals beneath the surface is the key issue under Colorado law.

That’s because the state operates under a “split estates” rubric, in which the surface rights and the subsurface rights are often owned by different parties.

Under state law, the mineral estate is considered the dominant estate and operators cannot be prevented from “entering upon and using that amount of the surface as is reasonable and necessary to explore for, develop and produce oil and gas.”

But that dominance isn’t unbridled.

Astrella helped draft a 2007 state statute that introduced the concept of “reasonable accommodation” for a surface owner affected by nearby drilling activity. The law states that an operator shall conduct its operations in a manner that minimizes “intrusion upon and damage to the surface of the land.”

The industry insists that it has made numerous accommodations to surface owners and communities over the years, buffering noise with berms and walls and reducing pad size through the use of directional drilling.

In some communities, oil and gas operators have agreed to abide by memorandums of understanding, which are specific agreements between companies and local governments spelling out stricter standards of operation than what the state mandates.

But Astrella said the people who own the oil and gas deposits that the companies are trying to extract find it hard to prevail in the court of public opinion.

“The ones who have the intrusion and negative effects of oil and gas drilling — their situation is obvious and they have the public’s attention,” he said. “The mineral owners are less likely to have that benefit.”

Smith, with the National Association of Royalty Owners, said that’s because the conflict is between a property you can see — a home — and one you can’t — a pocket of natural gas.

“We don’t have the same voice because the legislature will take care of the property right on the surface rather than the property in the mineral estate,” she said. “It’s out of sight and out of mind. However, it’s a property right you can buy and sell like any other property right.”

Paying the bills

Minerals rights can also be inherited. That’s how Mike Paulsen, a wine and spirits deliveryman in Denver, obtained his minerals in Weld County. He said he used to get $200 a month from his holdings, but the industry’s recent price and production drop means he now gets a $50 check every few months.

It’s harder for him to keep up on his bills and pay off his debts.

“I not only used it to pay my bills but to have something to pass on to my kids,” said Paulsen, 53. “There’s not going to be anything left by the time I get my bills paid.”

He worries about the rising movement to limit oil and gas operations spreading to where his minerals are and impinging on his property rights.

“It really bothers me,” Paulsen said.

The total amount of royalty income in Colorado is hard to determine, Smith said, because agreements between oil and gas companies and mineral owners are privately negotiated. But based on the $475 million in royalties paid out in 2014 on state and federal lands, Smith extrapolates that total payouts statewide were around $1.1 billion.

Jon Isaacs of Adams County showed off a measley $102 check from Anadarko Petroleum Corp. The money represents a year’s worth of royalty payments off a 30-year-old oil and gas well on Isaacs’ property.

It’s not much, he concedes, but the real value under his 40-acre spread located just 4 miles north of Denver International Airport lies in the future. He smooths out a spreadsheet in his basement office that shows estimated royalty collections should a firm using the latest highly productive extraction methods drill new wells on his land.

At $31 per barrel, Isaacs says he’d get $19,000 in royalties a year. That rises to $37,000 annually by 2021, assuming a rebound in prices to $75 per barrel.

It’s his retirement fund, he said. No different than someone who invests in stocks, bonds or cattle futures.

“It’s so I can stay here at this house that I’ve improved and plant crops on my land and stay in Adams County into retirement,” said the 58-year-old, who bought this windswept parcel only because it came with mineral rights. “I bought this land as an investment.”

Roni Sylvester of La Salle is also looking to the future, which she now deems “uncertain” given recent anti-oil and gas efforts in the state. Her husband was planning to donate a ranch he owns in Wyoming to Colorado State University’s agricultural college.

That plan is now on hold because the couple can’t be certain their royalty income stream will remain intact.

“There’s no way you can plan,” Sylvester said. “It knocks the foundation out from underneath you. You have to plan for the absolute worst-case scenario.”

“We’re in a new territory for everyone where the BLM and public are gong to mix in [on oil and gas exploration]” — Nada Culver

Montezuma Valley
Montezuma Valley

From The Durango Herald (Jonathan Romeo):

A Master Leasing Plan doesn’t sound provocative, but bitter lines have been drawn as a result of the Bureau of Land Management planning the future use of its federal land in Southwest Colorado, 92 percent of which is open to gas and oil development.

Debate now lingers over whether the BLM should engage in such a plan to further analyze when and where new wells should be drilled.

Conservationists and recreationists in support of a master plan say the study will give natural resources and recreational uses the same level of priority as gas and oil development, which the BLM has historically favored.

Energy companies and those dependent on the industry argue the BLM already has protections in place, and the call for additional review is a cheap attempt by those who wish to see fuels remain in the ground.

The BLM falls somewhere vaguely in between.

Leveling the playing field

Around 2010, the Tres Rios BLM office estimated up to 3,000 new wells would be drilled over the next 20 years for federally controlled minerals in western La Plata County and eastern Montezuma County.

And within the 820,000-acre area of minerals, only 62,000 acres would be closed to drilling.

The plan caught the ire of some community members who felt the boundaries come too close and adversely impact naturally valued lands, including the corridors into Mesa Verde National Park and Canyons of the Ancients National Monument, around the mountain biking destination Phil’s World and on the edge of two wilderness study areas.

In February 2015, the BLM released an updated Resource Management Plan, outlining guidelines for land use, including future exploration and development of new well pads in the region.

But environmentalists say the resource plan fell short of keeping oil and gas in check, leaving too many areas of discretion and loopholes for over-development.

Concerned with effects on wildlife migration, cultural resources, water quality and air quality, the groups pressured the BLM to consider a master plan, which could tighten restrictions in the two-county area.

“We’re not going to make the entire area on the map a park,” said Nada Culver, director and senior counsel for the Wilderness Society. “The idea is to get more balanced with oil and gas. (A master leasing plan) takes resources like wildlife, recreation, agriculture – and evens the playing field.”

Bringing together interests from across the board, the BLM set up and assigned an advisory committee to draft a recommendation on whether a master leasing plan is warranted. A sub-group of that committee is holding public hearings in Durango and Mancos on Thursday.

Delay tactics?

But not all are in favor of a second look at resources and interests on BLM lands.

“This is being done for political reasons,” said Eric Sanford, operations and land manager for SG Interests, which is representing the energy industry on the sub-committee…

BLM has final say

BLM officials pointed to the $247 million the state of Colorado received in 2015 from royalties for all federal minerals, including oil and gas, as well as the more than 22,900 jobs tied to the industry’s operations on public land.

The BLM Tres Rios Field Office will receive the advisory committee’s recommendation in August, but ultimately, the federal agency has the final say whether it will undertake a master leasing plan project.

“We haven’t taken a stance one way or the other,” said Justin Abernathy, assistant field manager for the BLM’s Tres Rios office. “We’re a multiple-use agency, and in my experience with BLM – the people, the employees really try to balance their approach on how we manage public lands we’re responsible for.”

The BLM ceased all gas and oil leasing on the area in question until the matter of a master leasing plan is resolved. Still, the federal agency has 35 previously authorized leases covering about 13,500 acres within the master plan’s boundaries.

Between the 3,740-square-mile area that covers La Plata and Montezuma counties, the most recent data show nearly 6,000 gas wells dot the countryside.

Throughout the mineral-rich San Juan Basin, the total number of drilling operations are hard to pin down, yet some reports reach into the tens of thousands.

And numbers like those make the battle for the landscape of the West worth fighting for, the Wilderness Society’s Nada said.

“This is a new culture,” Nada said. “The BLM has historically left it up to the oil and gas industry to decide when and where they drill.

“We’re in a new territory for everyone where the BLM and public are gong to mix in.”

COGA statement on new COGCC rules

Here’s the release from the Colorado Oil and Gas Association (Dan Haley):

Mr. Chairman and Commissioners – my name is Dan Haley, President and CEO of the Colorado Oil & Gas Association (COGA). Thank you for allowing me a few minutes to speak to you regarding the important and complex rules that are before you today.

COGA is not new to rulemakings and engaging in our state’s ever-changing regulatory process. Over the last several years, COGA has stepped up to work with the administration, local governments, citizens and, other stakeholders to achieve constructive, meaningful, and practical solutions to tough issues faced in setback, groundwater, enforcement, citizen complaint, spill reporting, and floodplain rulemakings by this Commission. The outcome of these rulemakings resulted in the oil and gas industry operating under one of the most stringent regulatory environments in the nation.

Again, we find ourselves working in coordination with numerous stakeholders in yet another significant rulemaking – this one geared to the implementation of two of the unanimously approved recommendations by the members of the Governor’s Task Force, many of which are parties you will hear from today.

COGA fully supported the 9 recommendations submitted by the Governor’s Task Force in March 2015. In fact, our members said yes when the Governor asked industry to serve on the Task Force to help find ways for state and local governments to better collaborate and coordinate efforts for oil and gas operations. It was in the interest of all parties on the Governor’s Task Force to have a meaningful dialogue and work hard to seek ways in which the concerns of local jurisdictions, operators, and the state could be addressed and to provide constructive recommendations for policy on how best to achieve these goals.

In the end, all 21 task force members voted to adopt the language in Task Force Recommendations 17 and 20. Those recommendations were thoughtful and meaningful in approach and, by their unanimous support, addressed many of the issues before you today. These recommendations would bring a big change in the way oil and gas locations are permitted in Colorado. The changes proposed in Recommendation #17 are significant because for the first time:

  • The State would have a process and a standard for reviewing whether operators have worked in good faith to achieve agreement with local government on issues of concern about large facilities in urbanized areas.
  • There would be a record of negotiation to help the State decide what site specific mitigations may be necessary to respond to local concerns.
  • There would be established expectations that provide all parties with an understanding of when and with what conditions state permits will be considered.
  • These are meaningful changes.

    And with regard to Recommendation #20, for the first time, the State would identify parameters for industry to share longer-term planning information with local governments.

    COGA supports this rulemaking, however, maintains that the COGCC proposed rules must be modified to uphold the intent, meaning, and integrity of the task force recommendations.

    If Recommendations 17 and 20 were written the same as the draft rules before you, the industry representatives and maybe even a few non-industry members would NOT have voted in favor of the recommendations, and as such would not have passed out of the Task Force. In fact, as you will hear during the Industry presentation, there are certain elements of the rules that were outright rejected by the task force.

    That is why today, COGA, along with CPA and CPC, will be presenting an alternative rule that is based on the COGCC’s proposed rules, but reflects needed modifications in order to respect the intent, meaning and integrity of the actual recommendations of the Governor’s Task Force. The industry’s alternate proposed rule is based on the 3 C’s of Clarity, Consistency, and Certainty – you have heard this in prior rulemakings and we will explain in later testimony how our alternate rule follows the 3 C’s. Industry’s proposed rule maintains the intent and purpose of the unanimous recommendations of the Governor’s Task Force, while providing language that allows for the practicable and realistic application of an early evaluation process.

    Please keep in your mind that, in addition to the two recommendations before you today, industry task force members voted to support the other 7 recommendations, and COGA communicated and supported those recommendations to the legislature, as necessary. A lot is getting done, and today we are talking about two additional important recommendations to be implemented for further improvements in the responsible development of Colorado’s oil and gas resources.

    COGA recognizes that this is a very important hearing and that you have heard and will hear a lot of testimony, from many perspectives. We appreciate your patience and consideration and also want to say thank you to the staff for their very hard work on these tough issues. COGA asks that you strongly consider our alternative rule as presented later today by Ms. Jost as we do believe our proposal provides clarity, consistency, and certainty for all stakeholders, not just Industry.”

    Oil and gas well sites near the Roan Plateau
    Oil and gas well sites near the Roan Plateau