Curry, industry may be nearing compromise on surface use bill |

Curry, industry may be nearing compromise on surface use bill

A Colorado House of Representatives committee delayed action Wednesday on proposed surface use compensation legislation amid signs that the oil and gas industry might be agreeable to a compromise version.State Rep. Kathleen Curry, D-Gunnison, welcomed news that BP Amoco has proposed what she considers to be minor and probably acceptable amendments to her House Bill 1185.”It was a really exciting concept because here we had a member of industry supporting 1185 with what I would consider just peripheral changes,” she said.Meanwhile, an industry trade group, the Colorado Oil & Gas Association, is working on new language of its own to address the issue.The House Transportation and Energy Committee had been scheduled to hear remaining testimony and possibly vote on Curry’s bill Wednesday. However, state Rep. Jack Pommer, the committee’s chairman, postponed resumption of the hearing in light of the ongoing discussions over the bill between varying interests. A hearing now is expected sometime next week.Curry said the delay will give members of the original coalition behind her bill time to consider the proposed changes.Duke Cox, president of the Grand Valley Citizens Alliance, a Garfield County property rights organization, said he has yet to see the changes. But he said it’s remarkable that after years of surface use proposals, the industry finally appears willing to work with advocates of reform on an acceptable solution.”I kind of look at it as sort of a groundbreaking kind of thing. I’m very encouraged, very pleased,” he said.Curry’s bill seeks to address the conflicts created by so-called split estates. Under Colorado law, land and the underlying minerals can have separate owners. When energy companies drill, they often reach surface use agreements to compensate landowners for impacts. But property owners say they are at a disadvantage in negotiations because companies can post a bond with the state and drill if no agreement is reached.Curry’s bill seeks to level the playing field in negotiations and encourage more agreements to be reached. She is seeking to raise the bond requirements for drilling without an agreement. Those bonds are now $2,500 in the case of drilling on dry land, $5,000 for irrigated land, or a blanket bond of $25,000 covering all of a company’s wells lacking agreements statewide. Curry wants to require a bond of $25,000 per well, plus written offers from companies for compensation where agreements aren’t reached.She also wanted to let a court impose triple damages on companies if the court awarded compensation at least 20 percent above their offers. But the industry objected, and Curry now is willing to eliminate that provision.BP Amoco also wants to address how long bonds could be held by the state, and require licensed appraisers to be involved in determining compensation for loss in fair market value of property due to drilling, Curry said.She is happy that BP Amoco is comfortable with the fair market value standard for compensation, which up to now had drawn opposition from the industry.An executive with Williams Production, one of the biggest natural gas operators in Garfield County, said Williams is working with BP Amoco on its proposal. Dave Cesark, principal environmental specialist for Williams, also is Western Slope chapter president for COGA. He said he is comfortable with parts of the BP Amoco proposal, and not with others.”We’re very encouraged with the progress that’s been made to date,” he added. “I think there’s a lot of good, positive discussions going on right now. We hope as an industry that we can reach a good compromise with Kathleen.”COGA, which had worked with agricultural groups to try to introduce a separate surface use bill, now is working on language separate from that in the BP Amoco proposal, and hopes to have it incorporated into Curry’s bill.It would stipulate that the industry has a right to reasonably access 10 percent of a property, and that expansion beyond that amount would be compensable based on assessed property value.”We would hope that we would get some consideration of these ideas,” said Ken Wonstolen, COGA’s senior vice president and general counsel.Cox said it’s important that the final bill isn’t gutted. The result would be “Paris Hilton” legislation – “something that looks good but doesn’t have any substance to it,” he said.He just wants a bill that treats landowners fairly.”We don’t have a problem with compromising and negotiating to get to that point,” he said.Curry’s bill faces some of its strongest opposition among energy companies in Weld County. There, residential development is booming, while the industry is seeking to increase production from a major field. The industry fears that a demand for compensation for losses in fair market value would make wells uneconomical in areas where property values are high.Said Curry, “I appreciate the situation in Weld County but I really brought a bill to address the issues on the Western Slope. I’m inclined to stick with where we have been all along. I think it’s a matter of sharing the pain up there” in Weld County.

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