EAB considers oil and gas proposal
State Rep. Kathleen Curry’s proposed legislation intended to level the playing field between oil and gas developers and surface land owners was the subject of lively debate at the Garfield County Energy Advisory Board meeting Thursday night. by donna grayPost Independent StaffState Rep. Kathleen Curry’s proposed legislation intended to level the playing field between oil and gas developers and surface land owners was the subject of lively debate at the Garfield County Energy Advisory Board meeting Thursday night. The board and members of an audience of more than 50 citizens spoke to Curry, D-Gunnison, via cell phone to her office in the Statehouse in Denver, about the bill. The bill covers compensation by and oil and gas operators to a surface owner for surface damages resulting from drilling operations. In case the two parties fail to reach an agreement, it establishes a procedure for an appraisal of the property and arbitration.Curry said her intent in framing the bill was “to bring more equity to the table for surface owners … The main purpose of the bill is to provide an incentive for fair negotiation between the parties before an application for a permit to drill is issued.”Curry will introduce the bill in the Legislature Feb. 2 and is now taking comments that will help her refine it. At issue for the members of the EA Board, and the audience, was the current open-ended nature of the bill, which does not set deadlines for negotiation, appraisal or arbitration; the choice of an appraiser and the cost involved and who, in fact, is covered by the bill.As written in a Jan. 13 draft of the bill, the appraiser would be chosen by the oil and gas operator. A number of people objected that in choosing the appraiser, the operators could introduce a level of bias into the process.Real estate agents present at the meeting pointed out that there are only a handful of appraisers in the area certified for commercial property. Such appraisals can cost $2,000. Many asked who would cover that cost, the land owner or the operator.Representatives of the oil and gas companies argued against any delays in drilling. However, they agreed they could live with a 30-day period for an appraisal and arbitration. “The way this is written it would basically shut down drilling” because delays could cause companies to lose contracted drilling rigs, said Steve Soychak of Williams Production.”We would have a hard time supporting the bill as written. The Colorado Oil and Gas Commission has rules (covering protection for surface owners). We should give (them) a chance,” said Scott Donato of Bill Barrett Inc. “We deal fairly with land owners. All of us (gas producers) here feel that way.”Those in the surface owners camp argued back that it would be reasonable to extend that time for appraisal and arbitration from six weeks or eight months.”We’re asking industry to plan a little better, and give surface owners time to negotiate in good faith, not five to 10 days,” said Peggy Utesch of Silt.Curry agreed that some timeline that would be agreeable to everyone is necessary. “It’s not my intent to shut down drilling. I need to add deadlines so it’s not open-ended,” she said.Soychak also asked Curry to clarify what type of split estate the bill applies to. Split estate refers to a situation in which the mineral owner and surface owner are not the same. He pointed out that sometimes a surface owner can also own a portion of the minerals, or federal and state ownership can be involved.Also among those commenting Thursday night was Liz Limpet, a mortgage broker who owns property in Silt Mesa. She was concerned about how drilling will affect property values in the area.”I have seen cases recently where getting a long term conventional loan is difficult if there is active drilling on a property,” she said. She also pointed out that mortgage lenders balk at lending on a property if there are health and safety issues associated with it.Curry said she would take all comments into consideration before finalizing the bill.The Jan. 13 version of the bill is available on the Garfield County Web site, http://www.garfield-county.com. Comments can be e-mailed to Curry firstname.lastname@example.org.The Jan. 13 version of the bill is available on the Garfield County Web site, http://www.garfield-county.com. Comments can be e-mailed to Curry email@example.com.
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