December 10, 2014 09:29 AM UTC

Air...Water...Health...and Accommodation.

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• by: Duke Cox

(Promoted by Colorado Pols)

Today and tomorrow Governor Hickenloopers' Blue Ribbon Panel on Oil and Gas policy is meeting in Rifle to discuss the future of drilling and fracking in Colorado. Not many people I know have high hopes this will result in any groundbreaking policy suggestions, but it could. If the Commissioners are willing to set aside a century old principle for a few minutes and consider that we are living in 2014 and not 1872…and that consideration points the way to only one conclusion.

It is time to effectively incorporate the Rule of Reasonable Accommodation into COGCC policy, taking into consideration the advances in technology and practices used by the modern extraction industry.

When Congress split mineral and surface estates in the 19th century, it was done for reasons that seemed appropriate and necessary, at the time. But times have changed, and it is imperative that the "Blue Ribbon Panel" understand and act upon those changes. Since the beginning of the separation of the two estates, the mineral estate has generally considered to be dominant. The rationale for the mineral estate being dominant was that the ownership of minerals would be meaningless if the mineral owner could not access and extract those resources through the surface. That seems reasonable enough, and for a very long time, difficult to argue.

With advanced technology, specifically directional drilling, the Rule of Reasonable Accommodation becomes a much more flexible vehicle. The Rule, as set forth in CRS 34-60-127, states:

"An operator shall conduct operations in a manner that accommodates the surface owner by minimizing intrusion upon and damage to the surface of the land."

As used in this section, "minimizing intrusion upon" can include "selecting alternative locations for wells" among other measures as long as they are "technologically sound, economically practical, and reasonably available to the operator". With modern drilling practices providing the industry with the capability to reach out, literally and laterally, for miles, there is no longer any need for an operator to sit atop or even close to a mineral resource in order to gain access.

The Accommodation Doctrine was incorporated into O&G policy in Texas. The following is from the firm of Houston Harbaugh in Pittsburgh…

The Accommodation Doctrine, as first adopted by Texas in the 1971 case Getty Oil Company v. Jones, 470 S.W.2d 618 (Tex. 1971), tipped the balance between mineral and surface estates significantly back toward equilibrium.

Under the Accommodation Doctrine, the surface owner must generally show that the particular surface activities are not “reasonably necessary” to extract the oil or gas. Haupt Inc. v. Tarrant County Water, 870 S.W.2d 350 (Tex. App. Waco 1994). The surface owner can satisfy this threshold burden by showing that the mineral owner has available other reasonable means of production that will not interfere with the surface owner’s use. “[I]f reasonable alternative drilling methods exist that protect [the surface owner’s existing use], then an accommodation by the mineral owner would be required.” Tarrant County Water v. Haupt Inc., 854 S.W.2d 909, 912-913 (Tex. 1993).

 

It is pretty obvious that this "accommodation" policy has not squashed the oil and gas industry in Texas, nor will an application of fairness and consideration for Colorados' air and water quality, and the safety of its' citizens cripple the robust activity of this states O&G operators.

I have personally heard industry engineers boasting about their ability nowadays to reach out for thousands of yards with their high-tech drilling rigs. It is simply not necessary for an O&G mineral owner to park a drilling rig right on top of, or even close to the minerals they intend to access. I believe it is not unfair to expect operators to "accommodate" surface dwellers and owners by honoring a 2,500 ft. setback from occupied dwellings.

These twelve Coloradans, the Governors' hand picked panel, can make history by bringing Colorado Oil and Gas policy into the 21st Century. By recommending to the COGCC and the state legislature that a standard 2,500 ft. setback for O&G drilling should be enacted and enforced, the panel can defend Colorados' air, water, and people.