Industry unclear about new Colorado landowner law

Colorado Gov. Bill Ritter on May 29 signed legislation that promoters said clarifies the structure for negotiated compromises between oil and gas companies and surface landowners.

Paula Dittrick
Senior Staff Writer

HOUSTON, May 30 -- Colorado Gov. Bill Ritter on May 29 signed legislation that promoters said clarifies the structure for negotiated compromises between oil and gas companies and surface landowners.

The Oil & Gas Accountability Project (OGAP) of Durango helped write the law, which it called "precedent-setting legislation that is one of the most powerful state laws in the nation in terms of protecting landowners' rights and the environment."

An OGAP news release said the law means landowners can require directional drilling of multiple wells from one pad. However, the law itself makes no mention of directional drilling.

The law calls for a "reasonable accommodation" regarding "oil and gas operations in a manner that accommodates the surface owners by minimizing intrusion upon and damage to the surface of the land."

Greg Schnacke, executive vice-president of the Colorado Oil & Gas Association (COGA) in Denver, said oil and gas companies are unclear about exactly what the new law will mean to industry.

Colorado Oil & Gas Commission statistics show that more than 80% of drilling permits filed in the state already are accompanied by a negotiated surface agreement, Schnacke noted.

"Nobody has ever called a surface owner protection bond," Schnacke said, adding that Colorado oil and gas companies already maintain good relationships with surface owners.

"The concept is an attempt to put into statute what generally already is occurring today. You always are liable for negligence," Schnacke said, adding that COGA expects someone probably will file a lawsuit stemming from the new law.

Contact Paula Dittrick at paulad@ogjonline.com.

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