A slew of proposed ballot initiatives aimed at giving Colorado towns and counties more controls over oil and gas development within their boundaries could be detrimental to mineral owners and, ultimately, could cost taxpayers a lot of money as well, according to the regional representative for a national group that works to protect mineral royalty interests.
“This is an issue that affects not only our members and others who own mineral rights, but the entire state’s economy,” said Michelle Smith, president of the Rockies chapter of the National Association of Royalty Owners (NARO).
“We believe people need to make up their own minds on these issues,” she said during an interview with the Post Independent on Wednesday. “Our goal is to educate people with the facts and the correct information, so they can make an informed choice.”
Smith, who owns mineral interests herself along with husband Mark in rural Elbert County, also met Wednesday evening in Parachute with mineral/royalty owners to explain the implications of the various ballot initiatives that are being proposed.
Petition signatures are being collected for as many as 11 different regulatory proposals that could end up on the November ballot.
Four of the ballot proposals would increase setbacks to between 1,500 feet and one-half mile for new oil and gas wells, which is above and beyond the new state standards that went into effect last year following a lengthy rulemaking process.
“We just did go through that process, and we felt good with the increases,” Smith said. “These initiatives would completely undo all that work that was done just a year ago.”
The new regulations approved by the Colorado Oil and Gas Conservation Commission increased the standard setback between new wells and homes from 350 feet to 500 feet, and required that new wells within 1,000 feet of high-occupancy buildings such as schools and nursing homes be considered on a case-by-case basis by the commission.
Three of the new setback proposals would assert that the new setback rules are not a “taking” of a private property right, essentially changing the state constitution, Smith said.
“There are constitutional implications that we feel would be challenged even if these measures do pass,” she said.
Other measures proposed for the November ballot would give local jurisdictions greater control over oil and gas operations, including limits or possible bans on hydraulic fracturing, or fracking, the controversial practice of pumping a mixture of water, sand and chemicals underground to free up hydrocarbons.
Supporters say more local control is needed for communities that desire to go above and beyond state regulations, including moratoriums so that local regulations can be crafted, and even outright drilling or fracking bans.
Some Front Range cities and counties have already voted to approve such limitations or bans, although they are being legally challenged.
Imposing local controls means making certain areas inaccessible to drilling, Smith said, which means mineral owners in those areas would have to be compensated somehow.
“It’s not clear how you would do that, but it would probably have to come from taxpayers,” she said. “Taxpayers need to realize that it doesn’t come without a cost.”
That includes a resulting decrease in the local and state tax base related to energy development, Smith also said.
“Mostly, our goal is to raise public awareness around the state, and that these initiatives will affect you individually, whether you own minerals or not,” she said.