Colorado lawmakers ready for more debate on oil, gas rules
DENVER A plan to give Colorado landowners more say when energy companies want to drill on their property has riled the industry but heartened property owners who say their voices haven’t been heard.”I think there are a lot of protections for mineral rights owners,” said Richard Goodwin.A bill the Colorado Senate will consider Tuesday is “a giant step forward” in creating more balance, said Goodwin, whose subdivision in southern Colorado is in the middle of a gas field.The House approved new and revised oil and gas regulations March 12 after long debate and several attempts by mostly Republican opponents to change or delay the rules. More objections are expected in the Senate.Giving landowners the right to appeal approval of a drilling permit “is a lever available to throw up a monkey wrench,” leaving projects in the lurch, attorney Ken Wonstolen told a legislative committee last week. He represents the Colorado Oil and Gas Association, a trade group.The roughly 100 rules moving through the Legislature would enact two laws requiring more consideration of the environment, wildlife and public health and safety when approving oil and gas development. Lawmakers overwhelmingly approved the two measures in 2007, when Colorado and the rest of the Rockies were in the middle of a natural gas boom.But drilling rates across the state have dropped as the recession has worsened. The industry has blamed the pending rules. They say they’ve created uncertainty and driven companies to invest their money elsewhere.The rules’ supporters dispute that. They point to plummeting natural gas prices, tight credit markets and lack of pipeline capacity in the region as the true culprits.Provisions protecting fish and western Colorado’s big-game herds, some of the country’s largest, have been assailed by trade groups and companies. They claim the rules will give state wildlife officials veto power over drilling. Regulators deny that.Another flashpoint is a new rule that would give surface owners in a split estate more input.A split estate occurs when one party owns the surface and another owns the minerals underneath. Companies that own or lease the minerals have the right to reasonable use of the surface to extract the minerals.As drilling has hit record rates in Colorado, companies and landowners have clashed over what’s reasonable. Landowners complain the industry holds all the power because if the two sides can’t reach an agreement, companies can post a bond and drill anyway.The new regulations would allow landowners to appeal a permit if they believe the operator isn’t following the rules or think there are potential health, safety and welfare problems.Companies’ right to appeal would be expanded beyond the withholding of a drilling permit to include conditions imposed as part of a permit.Carol Bell sees a need to give landowners more input into the process. After nine months of negotiating, she and her husband, Orlyn, signed an agreement with EnCana Oil & Gas USA to drill on their land south of Silt, nearly 180 miles west of Denver. Bell said it took “weeks of hours,” trips to Denver and hiring an attorney to reach a deal the couple still didn’t like.The Bells sold their 110-acre property, where they raised hay and horses, in 2007 and moved to Fort Collins. Carol Bell and she and her husband, who retired from the state engineer’s office, planned to eventually sell their land.”But we probably would have stayed on the West Slope if not for what was going on with the oil and gas,” Bell said.There was damage from three spills of drilling and waste fluids on the land. Bell said a pipeline carrying drilling fluids interfered with the irrigation for the hay fields. She said EnCana worked with them, but in the end it became too difficult to keep farming there.”I think at the end of the day, we did feel we reached a fair agreement” with the Bells, EnCana spokesman Doug Hock. “They didn’t get everything they wanted, we didn’t get everything we wanted.”Hock said EnCana has agreements with surface owners in “99 percent of the cases.” He and other industry representatives believe giving landowners the right to appeal a drilling permit will remove the incentive to cooperate with the companies.Dave Neslin of the Colorado Oil and Gas Conservation Commission, the main regulatory body, said he believes the rules strike a balance between the property rights of the companies and landowners.Brett Corsentino said he feels his property rights have been ignored. He blames Petroglyph Energy, which has coal bed methane wells in the area, for damage to his dairy farm in Walsenburg in southern Colorado.Petroglyph Energy, based in Boise, Idaho, has pumped millions of gallons of groundwater to free gas trapped in coal. The water is dumped in the river, which Corsentino uses to irrigate crops to feed his cows.The water is high in salt and has made the ground so hard that it can’t absorb much water. Corsentino said his corn yield dropped from 6,000 tons a year to under 3,000 tons.The state health department is considering new rules for the kind of discharge permit Petroglyph has to set standards for irrigation water so similar problems don’t occur.Petroglyph has temporarily shut down its wells to solve problems with gas seeping into area water wells. Even so, Corsentino isn’t sure his farm will survive.”We’ve been here since 1939, on the same place,” Corsentino said. “We survived floods, drought, bad milk prices. These people have damn near put us out of business.”Paul Powell, the company’s chief operating officer, said Petroglyph employees regularly visit the Walsenburg area to talk to people and do talk to Corsentino.”Do we always agree? No,” Powell said. “Some people say you’re not listening if you don’t agree with them.”
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Determining where the fish are in the river can be a challenge in itself, but during runoff the predictability factor tilts in your favor.