Committee against leasing mineral rights to oil and gas company

The Parks and Open Space Advisory Committee has recommended that Boulder County not lease its mineral rights to an oil and gas company, despite the threat of forced pooling.

Extraction Oil and Gas sent a letter to Boulder County in July related to its “Blue Paintbrush” well pad planned in Weld County. The pad is located approximately 1,000 feet east of the Boulder County line on land that Boulder County has a conservation easement on.

According to Deputy County Attorney David Hughes, Extraction plans to begin drilling on 16 of its 32 permitted oil wells on the pad within the next six months. The wells, which were permitted by the Colorado Oil and Gas Conservation Commission, are designed to drill horizontally from the Weld County site to produce oil and gas under four square miles of Boulder County, where Boulder County owns the majority of mineral rights.

Boulder County filed a lawsuit in 2018 arguing that its conservation easement and several existing leases do not allow for the approved drilling, but the suit was unsuccessful.

On Thursday, the parks and space advisory committee was given three options for recommendation: lease the mineral interest and receive a royalty share, join the company as a working interested owner by paying for costs and receiving revenues, or not lease the mineral rights and risk a forced pooling order from the state.

“As you may have picked up from this presentation, this is far from a voluntary situation,” Hughes said. “The offer that we’ve received from Extraction is essentially under threat of forced pooling.”

Boulder County has a longstanding policy of not voluntarily leasing mineral rights to oil and gas developers, so the first option did not appeal to staff or advisory committee members. County staff cautioned that joining Extraction as a business partner through the second option might be illegal.

That left the third option as staff’s recommendation. Extraction has already filed an application with the state to force pool Boulder County’s minerals and, if approved, would require Boulder County to allow its mineral interests to be leased while sharing in the cost of drilling and producing oil and gas along with paying fines totalling around $5 million.

Hughes said the county does believe it has a legal case against the forced pooling, but could not guarantee that would protect from that outcome.

“We cannot predict with any certainty what the outcome of the forced pooling application will be or, any subsequent or related litigation, what the outcome of that will be,” Hughes said.

Several community members commented on the decision, including neighbors to the planned operation, and urged the advisory committee to not lease the mineral rights. Many expressed concerns about the health and environmental concerns of fracking.

“I really do hope that this haven of health and hope in Boulder County can continue to be that and really stop the pressure and fear from the oil and gas industry,” Tracy Koller said during public comment. “There is no benefit to Boulder County from this proposal, and given how it may set precedent, I’m really concerned and do hope that Boulder County fights this at all cost.”

After hearing from staff and the public, the advisory board quickly agreed that it would not align with the vision of parks and open space in Boulder County to lease these mineral rights, despite the financial risk of declining to lease to Extraction.

“We do have our backs against the wall here, no good options in front of us, but the money, the royalties, the cost, all of those financial concerns may be minimal compared to long term health impacts of the population at large as well as environmental impact to the habitat and the wildlife out there,” advisory committee chair Paula Fitzgerald said. “… I think the principle versus the practical, financial outcome is in the county’s best interest to hold the line of acting on principle.”

The advisory committee voted unanimously to recommend against leasing the county’s mineral rights. That recommendation will go to the Boulder County commissioners at a public hearing scheduled for 4 p.m. Nov. 1.

The commissioners will now be accepting public comments on the issue at [email protected] leading up to the hearing.