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Colorado Bill Addresses Water, Drilling Disputes

Colorado's state lawmakers are moving a bill (HB 1286) to strengthen the powers of the state engineer's office in resolving water disputes between ranchers and oil and gas drilling companies. The state's director of the Department of Natural Resources supports the measure as a means of avoiding a two-year period of uncertainty for oil and gas producers.

The House Agriculture, Livestock and Natural Resources Committee last Monday voted unanimously (13-0) to send HB 1286 to the full House in the Colorado General Assembly. A staff member for the vice chairman of the committee told NGI Thursday that the measure will probably be voted on by the end of this month and then sent on to the state Senate.

Lawmakers so far agree that Colorado state government needs to strengthen its power in water disputes that come up between ranchers and oil and gas drillers. Local news media have characterized the proposed law as a response to a 2009 Colorado Supreme Court decision in which ranchers prevailed in a lawsuit against the engineer's office for allegedly not protecting the ranchers' water rights when gas wells were drilled.

The state's high court ruled two years ago that groundwater used to produce coalbed methane (CBM) was not a waste product and that producers would have to separately obtain water permits if water supplies were affected (see Daily GPI, April 22, 2009). Later that year then Gov. Bill Ritter signed legislation giving CBM producers another year to comply with new state groundwater legislation (see Daily GPI, June 5, 2009).

The state engineer last year was given the power by the legislature to publish maps showing where gas wells interact with surface water as part of their requirement to provide water replacements. Gas wells located outside of the mapped zones by the engineer's office do not have to replace the water they use as it is assumed to be deep enough to not impact surface streams.

Under the lower House measure, the state engineer's determination that oil/gas wells would not deplete surface water is presumed to be valid, unless proven otherwise in court by farmers or ranchers challenging the assessment.

"This is critical that we resolve this issue and that it doesn't get litigated and then appealed to the Supreme County, and we have a two-year window of uncertainty that would not be good for oil/gas production in Colorado," Natural Resources Director Mike King told an Associated Press reporter.

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