DENVER – Republicans on a Senate committee Thursday advanced a measure that seeks to compensate mineral owners if a local government bans hydraulic fracturing.
But the bill faces an uphill battle if it makes its way to the Democratic-controlled House, where a similar measure was delayed Wednesday after facing criticism from Democrats.
The measure in the Senate, sponsored by Sen. Jerry Sonnenberg, R-Sterling, would offer a means for mineral-rights owners to claim compensation from a local government if that government reduces the value of the owner’s royalties by at least 60 percent. It passed the Senate Agriculture, Natural Resources, and Energy Committee 5-4.
The measure in the House, sponsored by Rep. Perry Buck, R-Windsor, would more generally hold a local government liable for the value of lost royalties if that government enacts laws that limit natural-gas and oil extraction, such as by banning fracking. The measure was laid over Wednesday after lawmakers heard testimony. A vote is expected by the committee Feb. 25.
“This is not about the oil and gas industry; this is about property rights,” Sonnenberg said of his measure. “This bill is about property rights guaranteed in the Constitution.”
Still, several representatives of the gas and oil industry testified in support of the measure. The industry is worried about ballot initiatives that could give local governments the right to ban fracking.
Fracking critics – funded by U.S. Rep. Jared Polis, D-Boulder – were prepared to ask voters to give local governments greater control over fracking last year. But a compromise orchestrated by Gov. John Hickenlooper stalled the initiatives for a task force that is meeting to make recommendations. Those proposals are expected at the end of the month.
“The self-funder of ballot initiatives, Congressman Polis, has been very clear that he wants to allow local governments to ban oil and gas development,” said Stan Dempsey, president of the Colorado Petroleum Association.
There are more than 600,000 residents who have mineral ownership in Colorado, which is separate from surface rights above the ground.
Mineral-rights owners have the option of leasing their assessed rights to a producer in return for either a one-time payment, or a percentage of shares, known as a royalty.
The payments can be critical to owners and their families. Michelle Smith, who owns the mineral and surface rights to her Elbert County farm, said payments kept her farm afloat. She is the state director of the National Association of Royalty Owners.
“Leasing our mineral rights went a long way towards paying for our hay, so that is invaluable to the farmer,” Smith said.
But other property owners spoke of the nightmare that has been fracking, in which industrial operations moved into their rural communities bringing a host of health and nuisance concerns.
Amanda Harper said her family invested all of their money into a home to live a rural life in Weld County surrounded by nature and farm animals. But then they learned that a drilling operation would be located just 1,200 feet from their house.
“We did not make the choice to live around a major industrial site,” Harper said with tears in her eyes. “We will do everything we can to exercise our inalienable right to live the life we chose to live in this beautiful, pristine rural area.”
The issue gained momentum as several local governments along the Front Range banned fracking, either through a vote of the people or actions taken by city councils and county commissioners.
Many of those cases are tied up in legal battles, as the state believes the local ordinances overstep their authority.
Rep. Joe Salazar, D-Thornton, who heard the bill in the House State, Veterans and Military Affairs Committee on Wednesday, said he worries the measure erodes a local government’s ability to make health and safety decisions.
“Would you say that your interest of being able to access mineral property rights is more important than the public health, safety or welfare?” Salazar asked. “This bill doesn’t allow for the balance of interest.”
pmarcus@durangoherald.com
