Fight over forced drilling – even when property owners object – spills into court

Colorado’s teetering 67year-old law that lets fossilfuel companies drill inside neighborhoods even when residents who own mineral rights object could not be buttressed one way or the other Tuesday as a state oilfield fight spilled into federal court in Denver.

U.S. District Judge Brooke Jackson told state attorneys and disgruntled mineral property owners from Broomfield — one of the municipalities around Denver where oil and gas firms are expanding industrial operations — that he lacked jurisdiction to weigh in.

The case at issue challenges as unconstitutional Colorado’s “forced pooling” statute, which allows oil and gas firms to extract — for a price — minerals belonging even to those unwilling to sell.

Extraction Oil and Gas, currently constructing a drilling pad and installing infrastructure for 19 new wells that would span 1,600 acres near homes, was not a party in Broomfield residents’ lawsuit, Jackson pointed out. And the residents had yet to protest at the state level because the regulatory Colorado Oil and Gas Conservation Commission had delayed a required “forced pooling” hearing.

But Jackson assumed the role of a crisis diplomat, brokering peace between parties in this property rights dispute.

Jackson told attorneys for the Broomfield residents that, while he couldn’t grant their request to temporarily block Extraction and stop the COGCC from allowing forced pooling, he would hear from them in the future following a state hearing if necessary.

And when Kyle Davenport, Colorado’s assistant attorney general, couldn’t immediately guarantee that no drilling would begin until after that hearing, now set for March 11, Jackson ordered Davenport out of the courtroom to a hallway — “right now, please” — to extract a commitment from an Extraction executive that no drilling would happen before June 1.

Davenport did so and returned with that assurance. Jackson smiled. “I do not anticipate that the commission or Extraction will renege on what they agreed to in this courtroom.”

At issue is a 1951 Colorado forced-pooling law that favors extraction of fossil fuels — a law made long before horizontal drilling technology widened the industry’s reach across multiple properties, and before the oil and gas boom led to companies pushing to establish industrial operations inside communities north of Denver.

Oil and gas industry officials contend forced pooling of mineral property rights is essential to enable efficient fossil-fuel production.

And the COGCC, a regulatory agency simultaneously charged with promoting efficient exploitation of resources, has granted permits for large-scale drilling with bore holes as long as 2 miles to tap hundreds of different underground mineral properties.

“We remain on track to begin drilling … in early June and will appear before the COGCC pooling hearing in March as previously planned as part of that established process,” Extraction Oil and Gas spokesman Brian Cain said in a prepared statement.

Extraction has leased rights to, or obtained consent for, removing 80 percent of the minerals in the area, Cain said. “By the time this unit is drilled, we’re hopeful that percentage will be even higher.”

COGCC officials declined to comment.

The Broomfield residents of the Wildgrass community own rights to minerals under their homes. Many are opposed to the drilling, and some cite global warming concerns as a factor.

“What bothers us is that we are being forced, by Colorado’s ‘forced pooling’ statute, to lease our mineral property rights to a private company. That seems unconstitutional,” Wildgrass Oil and Gas Committee cochairperson Jean Lim said. “And we do have health, safety and environmental concerns. Those concerns haven’t been addressed by the COGCC permit conditions for those wells.”

Technological development and companies’ inclination to expand industrial operations inside cities render the existing law inappropriate, Lim said. “The forced-pooling law has to be changed.”

Next month, COGCC must hold a forced-pooling hearing, without further delay, under the deal that Jackson hashed out orally in court.

Broomfield residents must be allowed to raise concerns involving health, safety, the environment and fairness in a forced-pooling protest before the COGCC.

Former Colorado lawmaker Joe Salazar, helping to represent Broomfield mineral property owners, said legislators ultimately must deal with intensifying strains on an outdated law.

“This is the business of the legislature. It needs to be addressed,” Salazar said.

The problem is that oil and gas companies likely will try to block any action, he said.

“It is the lobbying problem. There is a power imbalance.”