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Colorado Lawmakers May Impose Royalty Cost For Local Fracking Bans

Republicans in the lower house of the Colorado legislature have developed a proposed law for consideration next year that would require the payment of royalties to mineral owners by any local government entity that imposed a ban on hydraulic fracturing (fracking).

The state lawmakers indicated in an Associated Press report last Friday that state Rep. Perry Buck from Windsor, CO, plans to introduce the bill when the legislature reconvenes next month. In the same time frame, a governor-appointed statewide, 21-member task force will be making legislative recommendations early next year for dealing with the various local control issues that have sparked a series of local bans on oil/gas drilling and fracking (see Daily GPI, Nov. 21).

Separately last Friday, a Colorado court again ruled against Fort Collins in its effort to revitalize its five-year moratorium on fracking, which has been rejected by the state courts. In the latest case, the Colorado Court of Appeals denied Fort Collins' request for a stay of a district court's ruling invalidating the city's five-year moratorium (see Daily GPI, Nov. 10).

The Fort Collins court challenge, however, has not been terminated. The city's appeal is still moving forward; the rulings just mean that the outside groups cannot intervene and the prior decision invalidating the ban is in effect. 

Nevertheless, Tisha Schuller, president of the Colorado Oil and Gas Association (COGA), talked as if the matter was settled, citing four consecutive rulings dismissing bans and moratoria imposed on fracking. "It is clear that attempting to ban or improperly impede fracking violates Colorado state law," Schuller said.

The Colorado appeals court also denied a request by third parties seeking to intervene in the appeals process, continuing similar rulings by district courts, Schuller said, adding that COGA is trying to show a more productive way to deal with the issue by fostering agreements separately with more than 30 municipalities across the state on oil/gas regulations.

A COGA spokesperson said the new state Republican legislative proposal was not discussed with the local issues task force during its meetings last Wednesday and Thursday in Rifle, CO. He said COGA doesn't take positions on proposed legislative bills its staff had not been able to review.

"In a state where one person might own surface rights and someone else might own the mineral rights underneath, a ban on fracking directly affects those mineral owners, who represent our 'vertical' neighbors," said Doug Flanders, COGA director of policy and external affairs. "We must ensure their private property rights are protected and taken into account when either bans -- or any new legislation -- is considered."

With the boom in domestic oil/gas exploration and production activity, royalty owners nationwide are becoming more aggressive in asserting their rights, as shown this year in California (see Shale Daily, Nov. 10).

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