Will this affect the area under the drilled horizontal well or only the drilling site. I’m asking about the buffer zones.
Nancy, This is a comprehensive change to the way that oil and gas is regulated in Colorado. It would have the potential to affect all aspects of how wells are permitted and because it would hand control over to local governments to regulate the siting of new oil and gas locations so it could have a significant impact on the setback requirements, too (the buffer zone).
Most importantly, if passed, the bill would impose an immediate and indefinite statewide moratorium on new oil and gas development until all rulemakings are complete (this could take a couple of years!).
Also, the bill would eliminate the requirement to have at least 3 members with substantial experience in oil & gas (geologists and engineers) on the Commission. It reduces the number of industry members to only one. (This is like only having one doctor on the Colorado medical board).
There are myriad of other requirements that are outlined in the bill. I would encourage everyone with mineral rights in Colorado to keep tabs on this bill and to write to your local legislators ASAP to let them know that this is moving too fast and goes too far.
In my opinion, the one good thing about the bill as it is currently written is that it would increase the statutory minimum royalty rate from 12.5% to 15% for nonconsenting mineral owners that are force pooled. It would however, increase the requirement that he owners of more than 50% of the mineral interests to be pooled to have joined the application for pooling (in other words, be leased). Normally, this would be a good thing from a mineral owners perspective but Anadarko owns a significant amount of the minerals in the DJ Basin (think all the odd sections) and would effectively have a monopoly over development. Or on the flip side, it would allow mineral owners who don’t want their minerals developed for ideological reasons to hold other mineral owners hostage from ever having their minerals developed. This would result in a significant hit to the value of affected minerals.
The bottom line is that this is the time to get involved and have your voice heard. If we don’t speak up then this bill could have a significant negative impact on the value of mineral rights in Colorado.
Thanks, Matt Sands