Surface-use compensation issue resurfaces in legislature
Editors note: This is the first of a two-part series. Part two will look at the possibility that Colorado residents will vote on a surface use measure in the fall, either in the form of a citizens initiative or legislative referendum.In a surface use showdown, two coalitions are working on separate solutions to the problem of the landowner impacts of oil and gas development.State Rep. Kathleen Curry, D-Gunnison, is preparing to introduce new surface-use legislation following the failure of a bill she carried last year. The state legislature goes into session on Wednesday.Meanwhile, the energy industry is working with agriculture interests in hopes of pursuing their own legislation.Were I think getting close to some things but no bill has been finalized yet, said Calvin Roberts, a rancher outside New Castle who sits on the Colorado Farm Bureau board of directors.The Colorado Livestock Association, Colorado Wool Growers Association, Colorado Cattlemens Association and Colorado Association of Wheat Growers are working with the Colorado Oil & Gas Association on a draft bill.They remain uncertain if a bill will be introduced. But they have made some progress in that the industry has agreed to a legal requirement to reach a surface-use agreement, if possible.Thats far more than what we have today, said Troy Bredenkamp, executive vice president of the Colorado Farm Bureau.Now, he said, owners of mineral rights pretty much can do what they want. If they dont reach an agreement with owners of surface rights, they can simply post a bond and start to drill.Ken Wonstolen, senior vice president and general counsel for COGA, said the legislation being considered would allow the parties to pursue the matter in court if an agreement cant be reached.Said Bredenkamp, Our thought is that I think both sides would be more apt to come to an agreement rather than going to court. Thats a lose/lose a lot of the time for everyone.Curry said she doesnt think such a measure meets the needs of landowners, and she is committed to run her own bill.Her measure last year was defeated in the House Agriculture, Livestock and Natural Resources Committee, which Curry chairs.Her new measure has been drafted by a coalition that includes associations representing homebuilders and Realtors, and several environmental organizations, including the Grand Valley Citizens Alliance, based in Garfield County.Last years bill got hung up over an appraisal and arbitration process designed to determine how much compensation was needed, Curry said. Her new measure steers clear of that.It also retains the bond-out option, unless last years measure. But it raises the bond to $25,000. Now, a company can post bond of as little as $2,000.Under the measure, a surface owner also could go to court to seek remedies. If the court awards more than a company offered, the company would have to pay triple damages and legal costs.What the bill is about is a whole lot of checks and balances to try to encourage an upfront surface use agreement that would be a meaningful agreement, Curry said.Bredenkamp said its possible Currys bill could come out of the House, and a bill by his coalition could emerge from the Senate, requiring a compromise to be reached.That may be the path forward, and thats not all bad, he said.But the state senator who Bredenkamp and the industry have hoped would carry the bill has some reservations about doing so. Like Curry, state Sen. Jim Isgar, D-Hesperus, isnt sure the bill goes far enough.I think we need a little more and Ive worked with them on that, he said.Isgar had planned to carry Currys bill in the Senate last year, had it emerged from the House.Ideally it would be nice to have one bill that we could carry together, he said.Curry said industry representatives attended a meeting in Glenwood about her bill, but she wasnt invited to talks about the other bill. Wonstolen said she hasnt run her bills specifics by the industry.Were not likely to have an agreement with Ms. Curry on those concepts. My guess is shes not expecting our approval, he said.Bredenkamp thinks the agriculture/industry coalition is close to reaching a compromise that is capable of being passed by the legislature and signed by Gov. Bill Owens. A Republican, Owens is a former oil and gas industry lobbyist.Those drafting the bill see a natural fit between agriculture and the energy industry. Roberts said the Farm Bureau is a property rights organization too. Some of its members also own mineral rights, and those also must be protected, he said.Duane Zavadil, an executive with the Bill Barrett Corp. energy company, said that while a lot of environmentalists have worked on Currys bill, those working with the industry have a vested interest in the issue.Were inclined as an industry to try to seek out the farm growers and stock growers and those kind of groups to try to work through issues with, he said.Isgar, a rancher himself, said he still could be the Senate sponsor of Currys bill. But hes torn between her measure and the other groups.Right now Im in between Kathleen and theirs and Im trying to get a little movement both ways, he said.One point he and Curry agree on is that compensation should be for long-term impacts not the time a drilling rig is there.Its not fair to the industry to determine the lost property value on a temporary condition, Curry said.Isgar said some people want compensation for any loss of property value, but the industry has a right to drill.I personally dont feel they have to compensate for their mere presence, but I think they have to mitigate their impacts, he said. Then the question becomes to what degree. Isgar believes there should be compensation for lost agricultural production. And other impacts such as nuisance and noise should be considered, he said. As the surface use compensation issue returns for debate this year, more lawmakers are apt to be sympathetic to the plight of landowners. The issue has gotten increasing attention on the Front Range in recent months after the industry pursued authority to increase drilling density in Weld County.They (lawmakers) werent as exposed to some of these issues until that Weld County density issue started to really come up, Curry said.Zavadil predicts that the industry isnt likely to be dramatically impacted by any of the bills under consideration. He said its chief concern is the additional delays legislation might build into the drilling time line, when companies already are dealing with seasonal considerations and the challenges of scheduling drilling rigs.Duke Cox, president of the GVCA, thinks Curry and her coalition have come up with a good answer to the issue at hand.Until the problem is solved, no one is going to quit trying, thats for sure, he said.
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