Big Colorado landowners have traction in negotiating oil, gas siting

DJ Basin Oil Drilling Rig - Image Credit - Encana Inc.

DJ Basin Oil Drilling Rig – Image Credit – Encana Inc.

By Mark Jaffe – The Denver Post – Aug 24, 2014

It was a clash between suburbanites and an oil and gas company. Why, the homeowners wanted to know, couldn’t the driller’s planned wells be located farther from homes? The answer, offered by Calgary-based Encana Corp. at the Aug. 12 Erie town board meeting, was that the wells were located where the property owner wanted them. As oil and gas drilling on the Front Range has moved closer to development and homes, there has been a clash over competing uses of the land.

Gov. John Hickenlooper is set to name a 20-person commission to recommend to the legislature ways to “minimize land-use conflicts.”

But large landowners who own their mineral rights, as well as small landowners who own their rights and band together, already have some clout in dealing with oil and gas operators.

“The larger the property, the more leverage there can be,” said Lance Astrella, an attorney who represents landowners in oil lease negotiations.

In Erie, Encana plans to drill 13 wells from two sites on property owned by Longmont-based Pratt Management.

One well pad is 770 feet from the nearest home, the other 1,652 feet. The state minimum setback is 500 feet.

Residents from the two nearest developments — Vista Ridge and Vista Point, where homes are listed from $400,000 to more than $1 million — and some of their elected officials weren’t satisfied by the answers they got that night.

Why couldn’t the pads be located farther north in the tract — even farther from homes, Erie Mayor pro tem Mark Gruber asked at the meeting.

“How can we put an industrial activity in a residential area?” he asked.

Drilling gets a special-use exemption, town community development director Martin Ostholthoff explained.

Gruber said he was “frustrated” by the state’s ability to undermine local zoning.

But property owner Susan Pratt had asked Encana earlier to place the new well pads near existing wells, which date to 1982 — long before the new subdivisions were built.

Continue reading story at The Denver Post

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