Broomfield’s impending doom

On Tuesday night the Broomfield City Council voted unanimously in favor of passing the first reading for an ordinance that will impose a 6-month temporary moratorium on new oil & gas drilling permits. The ordinance comes up for a second reading on January 10, and is expected to pass.

Frustrated with “limited toolkit,” Broomfield considers 6-month fracking moratorium

In a packed and emotional meeting Tuesday night, Broomfield City Council took the first step toward approving two ordinances to increase its control over fracking and drilling, including a temporary moratorium on new drilling projects.

Council members were upfront about the city’s limited control over drilling activity. Last May, the Colorado Supreme Court struck down long-term fracking bans in Fort Collins and Longmont, ruling that state law trumps local governments when it comes to regulating or prohibiting oil and gas activity.

“We just don’t have that many tools in the toolkit,” said council member Elizabeth Law-Evans. “We turned over the toolbox, and not much fell out” …

… Both the meeting room and an overflow lobby were packed with residents, most wearing stickers for community advocacy group Anthem Clean Air & Water. The crowd was highly reactive, applauding statements they approved and booing those they didn’t …

… Anne Carto, community outreach manager for the Colorado Oil and Gas Association (COGA), expressed concern about the moratorium, saying it would hinder economic activity and deny mineral owners access to their property rights. “Rather than singling out the oil and gas industry by halting development,” she said, “I hope you will let COGA and industry members come to the table and work through your community’s unique concerns.”

The crowd booed loudly …

I included that last part in the excerpt because I thought it was funny. Good old COGA propaganda. As you all know, I enjoy taking COGA tools’ words out of context to promote my own agenda.

The purpose of the moratorium is to give councilors time to address the overwhelming concerns of residents as the city considers a proposed drilling plan by Extraction Oil and Gas. The plan includes 4 well pads located adjacent to Anthem and Wildgrass, two densely populated subdivisions with playgrounds, schools, and hundreds of homes. [See map above] Forty wells will be drilled at three well pads and 20 wells on the fourth pad.

According to Broomfield Mayor Randy Ahrens, Extraction’s current drilling plans are far more aggressive than what was originally proposed. He claims the city was misled because they understood the plan was for 8 to 10 wells on each well pad.

“Come to find out they’re talking about putting 40 wells on one site,” said Mayor Ahrens. “All of the sudden it becomes a massive industrial site. Immediately adjacent to citizens’ homes, future reservoir, and future schools.”

At Tuesday’s meeting city councilor Sharon Tessier said she felt “very duped” by Extraction Oil & Gas and called the change from 40 to 140 wells “unacceptable.” She said she has received more than 200 emails from residents and assured them that she would work on their behalf.

“Our voices are louder in numbers,” she said. “We don’t have a lot of control, but that doesn’t mean we can’t get it.”

Hundreds of Anthem and Wildgrass residents have raised the alarm and voiced their concerns in opposition, forming two citizens groups: Anthem Clean Air & Water and Wildgrass Fracking. In a poll of 510 Wildgrass residents, 300 responded, with 75 percent firmly opposed to drilling in their neighborhood. Others felt they are facing a losing battle.

For more than 500 residents in Wildgrass and some of their neighbors in Anthem, Extraction’s drilling plans have added insult to injury.

All of the Wildgrass properties and some in Anthem include mineral rights, which increased their market value for prospective buyers. Townhomes in Wildgrass start at over $400 thousand and executive homes sell for over $1 million. Homeowners paid a premium for those mineral rights. To them it was worth it to be able sleep well at night believing they had the right to prevent drilling in their community.

Then last June they were introduced to “forced pooling” and likely have not slept well since.

A mass mailing from High West (Extraction’s landman) went out to mineral rights owners in Wildgrass and Anthem that included a mineral rights lease contract offering a $500 signing bonus and a 15 percent royalty on an unknown amount of potential oil and gas revenue.

Most of the homeowners dismissed the letter. Some thought it was a hoax. A few signed the contract.

Those who ignored the fine print did so at their peril. The contract stipulated a 15-day deadline after which time any homeowner who did not sign would have their mineral rights subject to forced pooling, so long as one homeowner had signed on.

Once the baffled residents realized what was happening to their property rights, they were understandably outraged.

What is forced pooling?

Definitely NOT mandatory swim lessons.

Forced pooling regulations cropped up across the country beginning in the 1930s to prevent helter-skelter drilling. Colorado is one of 39 states that have rules enabling the pooling of oil and gas reserves. The policy was intended to limit the number of drilling rigs and prevent landscapes like this.

standard-oil-wells
In Colorado, a company first submits a request to the COGCC for a “spacing order,” which defines the exploration area and number of wells to be drilled.

The drilling company offers to purchase leases — usually for 3 to 5 years — which provide a signing bonus and a royalty based on the well’s production.

Mineral rights owners within the designated spacing who do not sign leases (or cannot be located) are subject to forced pooling. Under the rules, the driller only needs one signed lease in order to request a pooling order from the COGCC, which Extraction has stated they fully intend to do.

Forced pooling is on the rise in Colorado as a tool for operators drilling in densely populated suburban areas, especially in Weld County and northern Denver suburbs.

In 2011, COGCC’s permit manager Thom Kerr, now retired, told the Denver Post that there are cases where as much as 40 percent of the land in the spacing order has been force pooled.

“It really is there to protect landowners,” said Kerr. “It is a way to make sure they benefit from the exploitation of the resource.”

Others view forced pooling as the taking of private property — aka eminent domain — that forces the impacts of drilling onto landowners.

Former Pennsylvania Governor Tom Corbett, who supports drilling and whose state has a pooling rule, told an oil and gas industry group in April 2011:  “I do not believe in private eminent domain, and forced pooling would be exactly that.”

Forced pooling does not provide a level playing field for landowners when dealing with gas companies.

To the small mineral owners, forced pooling is a tactic to blackmail them into accepting a less than fair gas lease. The majority of mineral owners can’t afford the attorneys’ fees required to negotiate a fair lease.

Colorado uses a risk-penalty approach, meaning any non-consenting landowner must pay for 100 percent of his share of equipment and operating costs for the well as well as 200 percent of his share of costs incurred in well exploration (that’s the risk penalty). The Colorado scheme allows these costs to either be paid to participating landowners upfront, at which point the landowner receives dividends as if he had been a consenting owner from the start, or, to pay for these costs through a calculated royalty system.

Any way you look at it, it’s a lose-lose proposition.

What’s that you say?

Once the wells are drilled and the gas is flowing, those homeowners can pay their mortgages with the royalty payments.

Not so fast.

According to the Boulder Weekly article, Forced pooling is not mandatory swim practice: “Best estimates are that an average Wildgrass homeowner with a quarter-acre lot might receive about $3,000 over the first four years and $100 a year after that, according to information from Extraction provided to Wildgrass resident [Bill] Young. In any case, it’s hardly Beverly Hillbillies money.”

The Anthem and Wildgrass subdivisions are ten years old, which makes most of the residents relative newcomers to the state and/or city of Broomfield. The crash course in fracking they have endured this past year has been more than a rude awakening. Welcome to Colorado — our very own little Saudi Arabia.

On top of being stripped of their property rights to allow Extraction to drill and frack in their community, they are forced to give implied consent to toxic air emissions, risks of water pollution from leaks and spills, ear-splitting noise, noxious odors, stadium lighting, decreased property values, and trucks, trucks, and more trucks.

At a Broomfield City Council meeting last month Patricia Romero-Trustle said that she had recently moved from Los Angeles for a better quality of life.

After the meeting she lamented to a Boulder Weekly reporter: “I told my husband, ‘We’ve moved to Doomfield’.”

For an in-depth look at the situation in Broomfield read: Forced pooling is not mandatory swim practice by Daniel Glick

Spoiler alert!

This is the end of Glick’s article:

When several Wildgrass residents met with COGCC Director Lepore recently, they asked him plaintively where they could move in Colorado to avoid having to fight oil and gas development.

His reply: “Summit County.”

In other words, we’re all doomed.

**********

For more information

PUBLIC NOTICE:   Public Hearing to Consider Status of Temporary Moratorium on the Processing of New Oil and Gas Permits
Public comment for the 11:30 a.m., Tuesday, December 13 hearing will be taken in written form

Boulder Weekly: Forced pooling is not mandatory swim practice
Colorado law compels communities that own their mineral rights to lease them against their will

Denver PostBroomfield officials eye another moratorium on oil, gas development

Colorado IndependentFrustrated with “limited toolkit,” Broomfield considers 6-month fracking moratorium

FOX31Broomfield residents upset about plan for over 100 oil wells near neighborhood

BizWestUnwilling drilling: Mineral-rights owners opposed to extraction face forced pooling, few options

ProPublicaForced Pooling: When Landowners Can’t Say No to Drilling

COGCC:  Horizontal Well Development Pooling, Spacing, and Unitization

Anthem Clean Air & Water

Wildgrass Fracking

, , , , , , , , , , , , , , , , , , ,

Get From the Styx delivered

Subscribe to our RSS feed and social profiles to receive updates.

One Comment on “Broomfield’s impending doom”

  1. frackfiles Says:

    This is sad… soon the entire state of Colorado will become a Industrial Sacrifice Zone like Weld (Welled) County with NO Concern for the health and future of those who call it our home. Find us on Facebook at Frack Files.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: