Tag Archive for fracking bans

Coloradans will continue to say “No” to oil and gas without action.

The following Guest Commentary appeared in The Denver Post on June 27, 2013 and is reproduced on Free Range Longmont with permission from State Representative Mike Foote.
Mike Foote, Colorado State Representative, House District 12

Mike Foote, Colorado State Representative, House District 12

Oil and gas is an issue that will not go away. The number of active wells in Colorado has doubled over the last four years. The number of spills and other contamination incidents has also increased. Drilling has encroached ever closer to more densely populated areas. The industry will spend and make billions of dollars in Colorado in the upcoming years.

People across Colorado have expressed legitimate concerns about their health and safety as well as their lack of a voice in the process. Changes to the system to increase transparency, accountability, local control and safety can go a long way in addressing those concerns.

That’s why I and other legislators brought forward proposals, including imposing minimum penalties for serious violations of the Oil and Gas Conservation Act and changing the mission of the Colorado Oil and Gas Conservation Commission (COGCC) to focus on protecting public health and the environment, ending its conflicted dual role of promoting oil and gas drilling while simultaneously regulating it.

The industry opposed those bills, as well as others increasing water monitoring requirements, increasing the number of well inspectors, creating a health impact study, and assessing fees for local inspection programs. None of those common-sense reforms made it through the legislature.

However, some hope emerged at the end of the session when Gov. John Hickenlooper issued an executive order directing the COGCC to “reevaluate its enforcement philosophy and approach.” The governor’s order went on to say, “Colorado requires strong and clear enforcement of the rules and assessment of fines and penalties accordingly.”

Implicit in the order was the recognition that enforcement of oil and gas industry regulations in Colorado is neither strong nor clear, and that the COGCC has become too cozy with the oil and gas operators it is supposed to be monitoring. It is my hope more progress can be made on this issue as well as many others related to oil and gas over the next year.

Recently, the Colorado Oil and Gas Association announced it would conduct a “listening tour” around the state this summer. As an elected official, my job is to listen to the people of Colorado all year long, and I hear widespread frustration about the current oil and gas system. Perhaps after listening like I have, COGA will be more interested in partnering toward some solutions rather than saying no to any real reform. Because if the industry continues to say “no,” the people of Colorado will say “no” to oil and gas.

That is exactly what is happening across the Front Range right now. Concerned citizens’ groups have popped up from Fort Collins to Colorado Springs. A ballot measure banning fracking passed in Longmont with a bipartisan 60 percent margin. Ballot measures in other cities and counties are promised this year.

Instead of taking their concerns seriously, industry supporters have called these citizens extremists and hypocrites for heating their homes and driving cars to work. That isn’t the language of dialogue; that’s the language of confrontation. People have responded with the tools available to them: public protest and the ballot box.

Coloradans know that our most precious natural resources are not gas and oil, but water, air and natural beauty. They will act to protect what’s most precious.

Until Coloradans have confidence that the oil and gas industry is behaving responsibly in our state, and under strict environmental safeguards, we will see this dynamic continue. Building public confidence by setting and enforcing high standards will not only protect the environment and people’s health and safety, it will also protect the livelihoods of the Coloradans who work in the industry.

Negotiation requires more than just sitting at the negotiating table. It requires a willingness to accept opposing viewpoints and a commitment to find common ground. Coloradans deserve no less.

State Representative Mike Foote represents House District 12 in Longmont, Lafayette and Louisville.

 

 

Hick and severance: possibilities abound

Governor John Hickenlooper today recently threatened any municipality in Colorado with legal action, should it have the temerity to try to ban fracking within its corporate limits. His remarks did not resonate from supremacy clauses (state laws are “higher” than local) or any appreciation for local land-use discretion. Rather, the Guv lamented that property owners “paid for” the mineral estates beneath their feet, and so must not lose. He also alluded to severed mineral estates. There lies the meat of the argument.

Only recently employed, directional drilling accompanied by hydraulic fracturing is being used to reach targets that can not be drilled with a vertical well.

Only recently employed, directional drilling accompanied by hydraulic fracturing is being used to reach targets that can not be drilled with a vertical well.

Most severances occur when someone sells a property and retains the mineral rights, or a portion of them. This may be a hedge against benefit from future development. But modern “fracking” was not generally known or acknowledged until 2007 or so, and so I doubt many property sellers anticipated or expected that particular form of beneficiation.

I was a commercial real property appraiser long enough to learn that the “bundle of rights” within a property depends on reasonable expectations, plus knowledge of what is feasible. If someone in Colorado retains rights to mining diamonds, he is pretty likely to be wasting his time. But when a property is purchased without a severance, is the buyer cognizant of what is to be deeded? If so, what is paid for it?

The answer is very little. Only a buyer of a mineral estate in an area where a certain kind of mineral production is not only likely but also being prosecuted, would pay what might be recognized as “market value” for that estate. The increment attributable to all or part of POSSIBLE minerals within a purchase of the fee-simple interest, encompassing minerals, surface, and everything else, is generally minimal. Oil and gas operators almost always lease; they have no interest in ownership. In these days of CERCLA that may not surprise. At least there were such days prior to Dick Cheney’s tenure in Washington’s Executive Office Building.

Monopoly moneySo, guvna, are you going to bat for the owner of the severed mineral estate, or the owner of a complete fee-simple property? Mineral values are speculative until proven by production; drilling may or not prove them. A former oil geologist ought to know that. You also should know that the market value of a speculative probability is lower than the value of what can be seen, touched, and enjoyed (commonly known as the surface of the planet). It is a real shame you have no interest in protecting that.

Fortunately, owners of the latter are usually citizens of the state and can vote. Owners of severed mineral estates may not live here. If you’ve got nothing better to do than sue cities, then I suggest you go back to drilling. In Zimbabwe.