Legislation addresses drilling impacts
Editor’s note: This is the first of a two-part series. Part two will look at the possibility that Colorado residents will vote on a surface-use measure in the fall, either in the form of a citizens initiative or legislative referendum.In a surface-use showdown, two coalitions are working on separate solutions to the impacts of oil and gas development on landowners.State Rep. Kathleen Curry, D-Gunnison, is preparing to introduce new surface-use legislation following the failure of a bill she carried last year. The state Legislature opened its session Wednesday.Meanwhile, the energy industry is working with agriculture interests in hopes of pursuing its own legislation.The land on the surface and minerals underground are often owned separately, a situation known as “split estate.” When gas companies lease or acquire the mineral rights, the surface owner cannot prevent them from drilling.State law requires gas companies to notify landowners of plans to drill and to negotiate compensation for damages. But if no deal is struck, the gas companies can commence work after posting a bond of up to $5,000.A citizens group in Garfield County tried last year to force a statewide election to make sure landowners are fairly compensated for damage caused when gas wells are drilled on their property.Now the Colorado Livestock Association, Colorado Wool Growers Association, Colorado Cattlemen’s Association and Colorado Association of Wheat Growers are working with the Colorado Oil & Gas Association on a draft bill.”We’re I think getting close to some things, but no bill has been finalized yet,” said Calvin Roberts, a rancher outside New Castle who sits on the Colorado Farm Bureau board of directors.The organizations remain uncertain if a bill will be introduced. But they have made some progress in that the industry has agreed to a legal requirement to reach a surface-use agreement, if possible.”That’s far more than what we have today,” said Troy Bredenkamp, executive vice president of the Colorado Farm Bureau.Now, he said, owners of mineral rights pretty much can do what they want. If they don’t reach an agreement with owners of surface rights, they can simply post a bond and start to drill.Ken Wonstolen, senior vice president and general counsel for the Colorado Oil & Gas Association, said the developing legislation would allow the parties to pursue the matter in court if an agreement can’t be reached.Said Bredenkamp, “Our thought is that I think both sides would be more apt to come to an agreement … rather than going to court. That’s a lose-lose a lot of the time for everyone.”Curry said she doesn’t think such a measure meets the needs of landowners, and she is committed to her own bill.The House Agriculture, Livestock and Natural Resources Committee, of which Curry is chairwoman, defeated her measure last year.Her new measure has been drafted by a coalition that includes associations representing homebuilders and real estate interests, and several environmental organizations, including the Grand Valley Citizens Alliance, based in Garfield County.Last year’s bill got hung up on an appraisal and arbitration process designed to determine how much compensation was needed, Curry said. Her new measure steers clear of that.It also retains the bond-out option. But it raises the bond to $25,000. Now, a company can post bond of as little as $2,000.Under the measure, a surface owner also could go to court to seek remedies. If the court awards more than a company offered, the company would have to pay triple damages and legal costs.”What the bill is about is a whole lot of checks and balances to try to encourage an upfront surface-use agreement that would be a meaningful agreement,” Curry said.Bredenkamp said it’s possible Curry’s bill could come out of the House, and a bill by his coalition could emerge from the Senate, requiring a compromise.”That may be the path forward, and that’s not all bad,” he said.But the state senator who Bredenkamp and the industry hope would carry the bill has some reservations about doing so. Like Curry, state Sen. Jim Isgar, D-Hesperus, isn’t sure the bill goes far enough.”I think we need a little more, and I’ve worked with them on that,” he said.Isgar had planned to carry Curry’s bill in the Senate last year, had it emerged from the House.”Ideally it would be nice to have one bill that we could carry together,” he said.Curry said industry representatives attended a meeting in Glenwood Springs about her bill, but she wasn’t invited to talks about the other bill. Wonstolen said she hasn’t run her bill’s specifics by the industry.”We’re not likely to have an agreement with Ms. Curry on those concepts. … My guess is she’s not expecting our approval,” he said.Bredenkamp thinks the agriculture/industry coalition is close to reaching a compromise that is capable of passing the Legislature and winning approval from Gov. Bill Owens. A Republican, Owens is a former oil and gas industry lobbyist.Duane Zavadil, an executive with the Bill Barrett Corp. energy company, predicts the industry isn’t likely to be dramatically impacted by any of the bills under consideration. He said the industry’s chief concern is the additional delays legislation might build into the drilling process when companies already are dealing with seasonal considerations and the challenges of scheduling drilling rigs.Duke Cox, president of the Grand Valley Citizens Alliance, thinks Curry and her coalition have come up with a good answer to the issue.”Until the problem is solved, no one is going to quit trying, that’s for sure,” he said.
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