Quicksilver hopes for compromise with Routt County

Oil & gas issues in Routt County

— Steve Lindsey, of Quicksilver Resources, said Wednesday that his company is determined to continue working with state agencies and Routt County toward a compromise on the subject of water-quality monitoring for oil wells. However, Colorado Assistant Attorney General Jake Matter said he does not see a way for the dispute between Routt County and Quicksilver to land back in the lap of the Colorado Oil and Gas Conservation Commission.

“I don’t think there’s a chance for Quicksilver to come back to the commission and say, ‘Commission, you be the tiebreaker; you sort this out.’” Matter said. “The permit was initially considered at the Oil and Gas Commission. That’s done. It’s fully permitted. There isn’t an opportunity I can think of for the issue to land back at the Colorado Oil and Gas Conservation Commission.”

Matter added that his sole client at the attorney general’s office is the Oil and Gas Commission.

The Routt County Board of Commissioners voted unanimously Tuesday night to approve the permit for Quicksilver’s Camilletti oil well north of Milner. But Lindsey entered his objection to the inclusion of a condition of approval that requires his company to drill a water-quality monitoring test well down gradient from the oil well to help determine whether any contaminants related to the drilling process have made their way into the groundwater.

Lindsey acknowledged Matter’s remarks Wednesday and added that he thinks it would be undesirable if Routt County’s actions Tuesday night led to counties all across Colorado devising their own similar conditions of approval for oil wells.

Instead, Lindsey said, he thinks there needs to be a policy in place that is consistent across the state, county and industry levels. And he thinks it makes more sense to borrow an existing water-quality monitoring system.

“The (Oil and Gas Commission) approved our permit, and so I’m sure as Jake stated, in their eyes, their job is done, and really the issue lies with the county and the state,” Lindsey said. “Our focus is going to be to work through the commission’s process to see if we can identify a compromise solution for the county’s permitting process and specifically for the Camilletti well. … If the county truly wants to work toward a compromise, they will be a willing participant and seek to work with us and the commission to seek a long-term solution.”

He added that if the Oil and Gas Commission’s nine-member board determined that his company should install water-quality monitoring measures at the Camilletti well, his company quickly would comply.

However, in an email to the Board of Commissioners on Tuesday, Oil and Gas Commission Interim Director Thom Kerr made it plain that he thinks water-quality monitoring measures at the local level are not needed.

“The county’s proposed water-sampling program, in addition to being in conflict with the (Oil and Gas Commission’s) permitting regime, is unnecessary because other technical safeguards, such as proper casing and cementing of the well, will address the county’s concerns over water quality.”

Kerr was traveling Wednesday and could not be reached for additional comment.

Matter said lawsuits about permitting of oil and gas wells are not uncommon on Colorado’s Front Range.

“I hope Quicksilver does not sue Routt County. And I hope Routt County does not sue Quicksilver,” Matter said.

County Attorney John Merrill said one of Quicksilver’s options might be simply to choose not to act on the Board of Commissioners’ approval.

“They don’t have to take the permit,” Merrill said.

If Quicksilver were to sue the county in an attempt to have the water-quality monitoring condition removed, it would be done under a specific form of suit: Rule 106(A)(4) used to challenge an action by a government agency, Merrill added.

Asked about that possibility, Lindsey did not directly address it.

“I think our goal is to work through the (Oil and Gas Commission) to reach a compromise. If the county chooses not to do that or the (Oil and Gas Commission) turns us down, we’ll cross that bridge,” Lindsey said. “On my return to Fort Worth, I’ll be meeting with the rest of our leadership team to make a determination. There are a lot of options on the table.”

He pointed out that as a public company, shareholder value is at the top of Quicksilver executives’ minds. Other considerations include commitments made in leaseholder agreements with local property and mineral rights owners like the Camilletti family.

“We’ve got to make prudent decisions about what option is best for the company,” Lindsey concluded.

To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com

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