Continued efforts to ban energy development are an affront to real property rights held by mineral owners in Fort Collins
DENVER (September 24, 2014) – Last night, Fort Collins City Council passed a resolution that directs the interim city attorney to appeal a ruling that overturned Fort Collins’ five-year moratorium on fracking. The resolution passed by a vote of six to one. The National Association of Royalty Owners – Rockies Chapter questions the wisdom of the decision.
“We are disappointed that the Fort Collins City Council voted to continue on a path that seeks to prevent royalty interest owners and mineral owners from benefiting from their real property rights within the Fort Collins city limits,” said Michelle Smith, president of NARO-Rockies. “Not only are such bans on energy development unfair to mineral owners, but Colorado families rely upon local energy development for jobs, lower cost of living, and the taxes that fund roads, schools, and parks.”
In August, District Court Judge Lammons ruled that a five-year moratorium on hydraulic fracturing was in conflict with state laws and regulations. Lammons’ ruling upheld the property rights of mineral owners, many of whom depend on energy development revenue to supplement retirement and support their family farms.
Fort Collins’ decision to continue on an adversarial path runs counter to the statewide effort now underway to collaboratively address these very issues, wasting the city’s resources and taxpayers’ funds. It also violates the real property rights that royalty interest owners and mineral owners have. Bans on energy development also could lead to potential takings claims against the city.
In Colorado, mineral rights are dominant, so while they must reasonably accommodate surface use, the surface owner cannot thwart all mineral development. Thus, a ban on mineral development is akin to reverse condemnation, which requires just compensation. Currently, mineral rights owners do not receive compensation when bans prevent them from earning royalty income.
Earlier this year, NARO-Rockies commissioned a study on potential cash flows from undeveloped, but probable, minerals in Boulder County, which implemented a ban on fracking. The study by Netherland-Sewell Associates, Inc. found that Boulder County could be on the hook for $1 billion in takings claims from this ban.
About the National Association of Royalty Owners (NARO) – Rockies Chapter
NARO encourages and promotes exploration and production of minerals in the Rocky Mountain region. It represents the interests of over 600,000 mineral owners in the state of Colorado. The organization preserves, protects, advances and represents the interests and rights of mineral and royalty owners through education, advocacy and assistance to its members, to NARO chapter organizations, to government bodies and to the public. Additional information about NARO can be found here.