Landowners square off against drilling companies

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Wes McStay says drilling companies have come onto his land and drained an agriculture pond and knocked over fence posts while accessing minerals someone else owned.

Plenty of rural landowners have horror stories of being mistreated by oil and drilling companies. Lately, split estate landowners have been calling for Moffat County to change its surface owner agreement policy to strengthen landowner rights.

McStay has led the drive, but there are other less vocal advocates of a policy change. These surface owners feel they don't have the strength to fight a multimillion-dollar energy company when their property sustains damage during mineral extraction.

Currently, Moffat County requires an oil company to make every reasonable attempt to negotiate a surface use agreement with split-estate landowners. McStay would like to see the county play a greater role in land use agreements, but the Moffat County Board of Commissioners say they can't do so without infringing on private property rights.

"In an individual versus a multimillion-dollar company you have no chance," McStay said. "How do you fully compensate someone for being forced to do something they don't want to do?"

McStay sent the commissioners a letter requesting a public meeting to discuss surface owner rights, and he outlined 15 points he thought the commissioners needed to consider regarding surface agreements. Only six surface owners attended the meeting.

One issue that came up at the meeting was royalty sharing. McStay asked the commissioners if they would be open to sharing the royalties collected from mineral rights with split-estate surface owners. Commissioner Marianna Raftopoulos said she "could consider" royalty sharing and Commissioner Les Hampton said he didn't "think it was unreasonable." Commissioner Darryl Steele didn't say anything at the time, and later on said it was something he would have to think about.

It would be an unusual move if the county commissioners agreed to share the royalties collected off mineral rights. Rio Blanco County Commission Don Davis has been fighting for split-estate surface owner rights throughout his political career. Several years ago, while on a trip to Washington D.C., he approached legislators about sharing 2 percent of mineral royalties with landowners.

"I was never met with such blank stares. It's a non-issue," Davis said.

Next week, Davis will go back to D.C., but he doesn't hope for much progress on the issue. The government doesn't want to share its revenue, he said.

Moffat County's ownership of mineral rights makes it unique among Colorado counties. The county came into possession of many land and mineral acres during the 1920s and later in the Great Depression, when county residents handed over their deeds in lieu of taxes they couldn't afford to pay, said Dan Davidson, Museum of Northwest Colorado director.

In the 1940s, the county began selling this land back to residents as split estates. The county sold the land but withheld the mineral rights.

It was a move that Jeff Comstock, Moffat County Natural Resources Department director, has called "visionary," but that some Moffat County landowners have referred to as "immoral."

McStay and Moffat County resident Paul Bishop have both gone on record at commissioner meetings stating their opposition to the county's acquisition of mineral rights. The county has not recently acquired mineral rights, except for the museum. Davidson has advertised that the museum will accept mineral rights as donations.

The county owns about 62,000 mineral acres, and the museum holds much less than that. Both holdings pale in comparison to the federal government's mineral acreage in Moffat County.

Across Moffat and Routt Counties, the federal government owns 1,878,000 mineral acres. Of those holdings, 561,000 mineral acres exist under private property. About 94 percent of those acres are available for leasing, although the number is slightly skewed because it includes the Vermillion Basin, which has been temporarily closed to leasing while the area is studied for wilderness characteristics.

The federal government accumulated mineral acreage in the early 20th century by reserving coal rights on homesteads. By the 1920s, the federal government was reserving all mineral rights, Davidson said.

Today, federal mineral acreage is governed through the Bureau of Land Management. Like Moffat County, the BLM only requires oil and gas companies to negotiate a surface use agreement with the surface owner.

The Colorado Oil and Gas Commission requires all oil and gas companies to repair any damage caused to the surface property during mineral extraction, and the reclamation work is bonded. However, no companies are required to pay a landowner for surface damages.

But by the end of the last meetings the commissioners held with surface owners, it seemed as though landowners might be getting piece if the oil and gas action. Comstock suggested the creation of a mineral owners association as a sort of coalition on pricing. He said that on the last four leases the county signed, they took one-sixth of the production profits as a royalty fee. He said the county could add another two percent to that fee, which would be given to the landowner.

Rob Gebhart can be reached at 824-7031 or by e-mail at rgebhart@craigdailypress.com.

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