Colorado Legislature Considers Limitations On “Force Pooling”

Rep. Mike Foote (D-Lafayette) and Rep. Dave Young (D-Greeley) introduced House Bill HB17-1336, legislation which would prevent a lessee representing less than a majority of the mineral royalty owners from obtaining a force pooling order. The authors of the legislation argue the intent of the bill is to prevent a mineral rights owner or lessee from forcing adjacent mineral interest owners to lease their minerals and to provide better information to affected parties. In addition, the legislation would provide mineral owners with additional time to decide whether to lease, participate in proposed well(s), or decide not to participate in the drilling of proposed well(s). Proponents of the legislation also argue that under current law, an oil and gas operator has too much of an advantage when it can tell an unleased mineral owner that if he or she does not sign a lease, then they will be force pooled.

The bill was introduced late in the session where rules allow expedited consideration, with the probable strategy being to prevent extended deliberation. The bill appears to conflict with Colorado property and constitutional law. Given significant departures from existing law, a longer time is necessary to fully appreciate how current law would be changed. Here are some of the problems:

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Colorado Enters Discussion on Federal Land “Takeover”

Colorado has now joined eight other western states in the ongoing discussion of state assumption of control of federally-managed public lands. This has been a hot button issue among western conservatives since the 1970’s, but the movement has recently gained new momentum with the States of Utah, Wyoming, Montana, Idaho and Nevada in various stages of developing plans to either study or implement assumption of management of these lands.

Colorado is the first Democratic-leaning state legislature to take action—albeit tepid—to discuss the “takeover.” Earlier this week, the Colorado Senate Agriculture, Natural Resources and Energy Committee approved a proposal to study the benefits of assuming control of Colorado’s nearly 24 million acres of federally-managed land. The Committee voted along party lines to approve legislation that would establish the Colorado Federal Land Management Commission. The Commission would be a 15-member body made up of County Commissioners from around the state, but weighted toward representation from Counties dominated by federal public lands.

Opposition to the bill has been strong among elected Democrats and sportsman, conservation, and environmental groups in the state and, as reported by Greenwire, during public comment at the hearing, opponents to the bill outnumbered supporters 3-to-1. Much of the opposition has been focused on the make-up of the Committee, which opponents fear leaves numerous stakeholders out of the planning process. Other opponents raised concern that it would be legally impossible for states to “assume” control federally-managed public lands.

Supporters of the bill countered that the Commission is merely a first step in analyzing the issue. Under the bill, the Commission would prepare two reports to be issued in April 2016 and April 2017. It is only after the reports are completed that the legislature would re-visit the issue.

The bill now heads to the full Republican-controlled Senate, where it is expected to pass. However, the bill will likely face an uphill battle in the Colorado House, which is controlled by Democrats.

To read Greenwire’s coverage (subscription required), see:   http://www.eenews.net/greenwire/2015/04/24/stories/1060017407

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