Shelton: Balance Comes to Oil and Gas Commission | View to the West
May 25, 2007 | 612 views | 0 0 comments | 8 8 recommendations | email to a friend | print
Peter Shelton

It’s amazing what a difference a new administration makes.

I wish I were talking about Washington. But no, this is Denver we’re discussing. And the changes being put in place by a Democratic legislature and the Ritter administration regarding oil and gas development.

Oil and gas has run amok in parts of Colorado (and elsewhere in the Rockies) since the Cheney administration decided to fast-track domestic production. Colorado now has 30,000 active wells pumping billions of cubic feet of gas each year. In six years the state is expected to have over 60,000 wells.

These are the numbers the Colorado Oil and Gas Conservation Commission want you to know. These and the millions of dollars in royalties flowing into state coffers. What the COGCC doesn’t want you to know is that these operations are also making people sick; fouling the air; polluting ground water; disrupting wildlife; degrading traditional industries like ranching, hunting and tourism; despoiling the landscape; and dramatically reducing the value of private property.

The misnamed COGCC (“conservation” has nothing to do with it) is theoretically in charge of regulating this insatiable and fabulously profitable boom. But, as former Colorado Division of Wildlife director John Mumma said in a recent letter, “You’ve really got the fox guarding the henhouse.”

Of the 1,500 pollution or damage complaints filed with the commission over the last five years only 11 resulted in fines. Duh. Five of the seven COGCC members were by law industry insiders. Now, with the passage of HB 1341, thanks to Governor Ritter and the Democrats (with grudging acquiescence by industry lobbyists), the commission will be expanded to nine members.

Three will have industry expertise. One will come from the world of environmental or wildlife protection. One will be a local government representative. One will be an ag person or a royalty owner. One will come from soil conservation or reclamation. And two seats will be filled by state officials, the Director of the Department of Natural Resources and the Director of the Department of Public Health and Environment.

“It’s long overdue that the commission get a new face and a new look,” Richard Long, a top air-quality official with the Environmental Protection Agency told the Durango Herald. A new face and a new mission statement that should help “balance maximizing energy extraction with protecting public health, safety, the environment and wildlife.”

Industry apologists threatened that passage of the bill would cause drillers to take their business elsewhere. Balderdash. With profits of $9 million per well/per year in the rich basins of Garfield and La Plata, San Miguel and Montrose counties, those boys aren’t going anywhere except into the ground. Now, though, they might have to follow agreed-upon best practices and clean up their acts.

This would be good news for surface owners even without the passage of a sister bill, HB 1252, the so-called Landowners Protection Bill. This one is long overdue, too.

A significant portion of oil and gas development is happening on private land without the landowners’ agreement. Welcome to the world of split estate, where one party owns the surface (a house, maybe, some cows, fields, ditches, and so on) and another party (typically the federal government represented by the Bureau of Land Management) owns everything below the surface, the minerals, oil and gas, etc.

Federal law says the mineral owner (or leaseholder) has the right to reasonable use of the surface in order to extract his resource. If this means bulldozing roads and well pads, evaporation ponds, setting up drill rigs, noise, lights, dust, trucks, weeds, trucks, holding tanks, pipelines, trucks, compressors, and chemical spills all within a minimum 150 feet of your dwelling, well, so be it. If the driller wants to negotiate with you, you may get some say in where the well pad goes, and you may even get a small monetary compensation. But the driller doesn’t have to talk to you; he can instead post a bond of as little as $5,000 with the COGCC and proceed without so much as a howdoyoudo.

As for your quality of life and the resale value of your place – forgetaboutit.

The Colorado Landowners Protection Bill will not prevent this nightmare scenario; only a change in federal law would do that. But it will for the first time require that oil and gas companies “minimize their impact to the surface.” It will for the first time give the landowner the right to sue over unreasonable use of the surface. And in any litigation the burden of proof is on the company to show reasonable use, not the landowner, as it was in the past.

Much more needs to be done to protect surface owners. (For example, the BLM is not even required to notify landowners that their minerals are about to be leased to energy companies.) But these bills are “steps in the right direction,” says San Miguel County Planner Mike Rozycki. He helped draft a set of oil and gas regulations and development standards for the county that have been in place since March 2006. Among the issues they focus on are: notification of surface owners, getting the industry to use best practices and innovative techniques, and getting them to move back a minimum of one-half mile from somebody’s house.

County powers are limited, however, and Rozycki admits that his standards have yet to be tested. “Push come to shove,” he says, “I don’t know how effective they’d be in a lawsuit.” So far, all of the drilling has been in the sparsely-populated West End. The test may come when drill rigs arrive in “the higher-density neighborhoods around Miramonte” where leases have already been auctioned.

In Ouray County, after nearly two years of work, commissioners were set to pass oil and gas regulations Monday, May 7. Commissioner Keith Meinert is “very positive” about the changes at both state and county levels. But, like Rozycki, he worries about enforcement. “Our requirement for good faith negotiations between companies and surface owners, for example, has very little teeth to it…If you look at the BLM’s website you’ll see that they believe mineral rights trump surface rights.”

Energy companies with extremely deep pockets haven’t hesitated to sue counties (Gunnison and La Plata are just two) over their attempts to control where and how drilling takes place. That’s the way it’s been in this state. Now maybe we’re seeing a shift, incremental though it may be. “Let’s say I’m cautiously optimistic,” says San Miguel’s Rozycki. “Time will tell.”
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