Column: Deck stacked against Battlement, other oil and gas neighbors
Gov. Hickenlooper, who’s standing up for Bill and Eleanor Nelson?
I ask you specifically for two reasons: 1. I believe you care for the well-being of all Coloradans. 2. The Oil and Gas Task Force you formed last year to head off ballot initiatives that might have imposed arbitrary rules on drilling (and might have been a risk to your re-election) was supposed to balance the interests of the industry, communities and residents.
But if you hear the Nelsons’ story, representative of many others around the state, it’s easy to come away feeling like they got screwed some years ago, there’s nothing they can do about it now — and only activists, rather than their local and state governments, are on their side.
That seems like a recipe to revive those ballot initiatives, which would lead to an ugly, divisive, expensive fight we all have an interest in avoiding.
This isn’t the oil and gas companies’ fault. They are going about their business within their legal rights, and get no reward if they back off their plans. They also have more money and powerful allies than folks like the Nelsons.
If the task force was to come up with new rules to balance all these competing interests, it’s falling short.
THE NELSONS’ STORY
The Nelsons moved to Colorado from Florida in 1998 believing they had fulfilled their retirement dream. They had vacationed here often, so when they saw a magazine article that listed Battlement Mesa as a top place to retire, they visited.
They spent a weekend in an apartment and looked at potential home sites in the development, which started as employee housing for Exxon’s effort to develop shale oil in the Piceance Basin. When Exxon pulled out in 1982, it had this nascent neighborhood with infrastructure in place that was a non-performing asset. Someone came up with the idea of marketing it as a retirement community.
A retirement kit prepared for visitors by the Battlement Mesa Co., which bought surface rights from Exxon in 1989, pictured a fit older couple with bicycles stopping to enjoy the scenic vista. “Winning the battle for beautiful living on a retirement income,” the cover said. Nary a drilling rig was in sight, as remains the case today on the Battlement Mesa Co. website.
During their 1997 visit, the Nelsons were aware of natural gas reserves in the area and asked the salesperson about it. They and other buyers from that time say they were assured that because Battlement Mesa is a covenant-controlled community, no drilling could occur within the Planned Unit Development.
That wasn’t true. When Exxon sold the surface rights, it kept mineral rights and executed a so-called Surface Use Agreement that allowed it to build at least 14 well pads inside the PUD. That agreement wasn’t filed publicly until 1999, and then only in an obscure place, Bill Nelson contends.
The Nelsons, who are about as nice a couple as you’ll meet, were no rubes. Bill was an accountant and Eleanor a regional bank vice president who previously worked in real estate. They are credible when they (and other residents) say they were told that the covenants would bar drilling, and they are credible when they and others say that no one disclosed the existence of the Surface Use Agreement.
“I feel absolutely deceived,” Eleanor told me. “When we bought, we had no knowledge of any Surface Use Agreement or map details of any proposed pad locations.” While their deed is clear they don’t own mineral rights beneath their home, they did not imagine they would deal with drilling within their dream neighborhood.
Said Bill, “Had we seen the pad locations at the time of our purchase, we would never have bought the lot.”
Battlement Mesa Co.’s Eric Schmela did not respond to an email and phone call seeking comment for this column.
The Nelsons chose a lot overlooking the Colorado River and Parachute where they built a 3,200-square-foot home, living in a townhome in the development for about eight months while it was constructed. They made many friends and became active in the community.
Battlement Mesa is a tidy development, with a mix of apartments, some prefab houses, townhouses and neighborhoods of larger, gracious homes like the Nelsons’. It has one of Colorado’s top public golf courses and a 53,000-square-foot activity center. About 5,000 people live there, many of them employed by energy companies and untroubled by the industrial development around them that also pays their checks.
While the gas companies and their allies like to point out that the development was started as employee housing for oil workers, seeming to imply that buyers like the Nelsons should have known what would happen, what Battlement Mesa subsequently became is far from a gritty man camp.
“For the first 10 years, it was a wonderful place,” Bill said. “We thought, ‘Boy, have we ever made the correct decision.’”
Then came the fracking boom and proposals to put well pads up against the boundaries of the PUD, hundreds of wells drilled from those pads and, now, a proposal to put well pads inside the PUD, including one 991 feet from the Nelsons’ deck.
Ursa Resources, which now holds leases to drill for gas from within the Battlement Mesa PUD, is going through the process for a special use permit, a Garfield County provision created especially for the community.
These leases are assets for Ursa, property it owns just as surely as the Nelsons own their home.
Just as I spent time with the Nelsons and others in Battlement Mesa, I spent roughly an hour with Ursa officials discussing the plan. It’s clear that Ursa is working to be as good a neighbor as it can be while still pursuing its business, limiting drilling hours, reducing the number of well pads it proposes to build in the PUD and taking other steps to minimize its impact, such as buying the county a new air-monitoring device.
DECK IS STACKED
Residents ask why Ursa can’t wait until drilling technology improves and the pads could be built further away; Ursa says geology makes that improbable and it has obligations to its investors and other mineral rights holders to develop an asset in its portfolio that promises a good return even in these down times.
It’s a vexing situation, to say the least.
The Post Independent is not opposed to responsible natural gas development. While natural gas is in a down cycle right now, it’s critically important to the county’s economic health, is a provider of jobs that pay well — all too rare here — and is needed for the foreseeable future. At a minimum, it is a bridge fuel to help us to a time when we get our energy from above the ground rather than relying on, as Rocky Mountain Institute co-founder Amory Lovins enjoys putting it, dinosaur poop.
I also want the PI to stand up for ordinary folks, and I can’t help feeling that the deck is badly stacked against the Nelsons and their neighbors.
The county permit process, unique to Battlement Mesa, does impose extra requirements on Ursa. Kirby Wynn, the county’s oil and gas liaison, works to provide information through the Energy Advisory Board and to ensure that complaints are heard.
But in a county that relies on gas revenue, rejection of the Battlement PUD permit is extremely unlikely, as is the case with the state permit that’s also needed.
Todd Hartman, communications director with the state Department of Natural Resources, said “applications are rarely rejected outright” by the Colorado Oil and Gas Conservation Commission. “Instead, a back-and-forth often occurs to get an application to the point where it’s acceptable to staff. Often various conditions of approval or other adjustments are developed so the permit can meet the criteria for an approval.”
If we were to have truth in naming, this body would be the Colorado Oil and Gas Development Commission — the point being that I would not bet against approval of the well pads within the Battlement Mesa PUD.
Nor does it appear that the commission is shifting the rules in a way that empowers surface owners.
New rules that grew from Hickenlooper’s task force being considered by the state commission would have covered less than 1 percent of Colorado drilling and storage sites approved in the last two years.
Emily Hornback, a community organizer with the Western Colorado Congress, told the COGCC this month that “whatever comes out of this rulemaking is … critically important to the otherwise-unrepresented adjacent landowners who have been fighting for some sort of legal standing before the COGCC for 30 years.”
Agreeing was Brent Boydston, vice president of the Colorado Farm Bureau.
“There is absolutely no assurance that the surface owner will actually have a say in what happens on their property” under the proposed rules, Boydston told the COGCC.
I don’t know the solution — and apparently I’m not alone in the state or nation on that point. A few places have banned fracking. That won’t happen here. A few intense battles have been settled with lease swaps — something, by the way, that Bill Nelson proposed in 2008 that withered for lack of local government support.
That’s a mostly unreasonable way to ask the gas companies to do business — asking them to negotiate leases they already own every time they want to put a drill bit in the ground. But are the circumstances of Battlement Mesa as meritorious of seeking a swap as those of the Roan Plateau, where a lease swap was worked out, or of the Thompson Divide, where one is under discussion?
IT’S NOT ACADEMIC
The Nelsons and their neighbors certainly have less leverage, money and support than the coalition fighting to prevent drilling on public lands in the Thompson Divide.
I looked out from the Nelsons’ deck and realized that a drilling rig would be about as close to them as James Surls’ “Sewing the Future” sculpture in the Carbondale roundabout is to my house. I thought, “How would I feel if that were a gas rig?”
I asked Don Simpson, an Ursa vice president a similar question: Don’t the neighbors have a legitimate concern? He acknowledged that it would be difficult to live so close to drilling operations.
It’s not an academic discussion. Only so much can be done to mitigate noise, release of airborne toxins, odor and long-term risks inherent to oil and gas. Residents say noise from drilling has forced them inside at times. Some — and as a group, older people are more susceptible to such things — are sensitive to the volatile organic compounds inevitably released in gas operations. And accidents happen, too.
A 2010 draft report by the Colorado School of Public Health on Battlement Mesa risks analyzed data showing that about 6 percent of operations in the state have reportable “accidents or malfunctions.” From January 1997 through August 2010, the report said, operations in Garfield County had “21 fires, loss of well control (including gas kicks) and explosions.”
Now imagine living on a ridge above a drilling operation and possible storage facility.
If the Nelsons tried to sell their home today, they would be required to disclose the proposal for the well pad just below them. Good luck finding a buyer.
“I don’t believe that anyone in the state of Colorado really cares about the affect drilling has on residents,” Eleanor told me. “Their objective is to generate tax revenues and improve the economy by creating jobs, taking advantage of boom times so as to have sufficient revenues to carry them through the bust times. The groups that organize to voice their objections are classified as troublemakers when in fact they have the residents’ health and quality of life in mind.”
Her husband said, “I’m 82 years old. I’m going to have this the rest of my life.”
Randy Essex is editor of the Post Independent.
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