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First Regular Session | 75th General Assembly
Colorado General Assembly

PUBLIC
BILL SUMMARY For SB18-230

SENATE COMMITTEE ON AGRICULTURE, NATURAL RESOURCES, & ENERGY
Date Apr 11, 2018       Location SCR 357

SB18-230 - Referred to the Committee of the Whole
11:12:10 AM  
Senator Marble, prime-sponsor, discussed the provisions of Senate Bill 18-230 cocnerning drilling unit pooling orders. This bill permits the Colorado Oil and Gas Conservation Commission (COGCC) to authorize more than one drilling unit in a pooling order for oil and gas resources.  Drilling units may cover any pool, or a portion of a pool.  A statutory pooling order must specify that a nonconsenting owner is immune from liability for costs arising from spills, releases, damage, or injury resulting from oil and gas operations on the drilling unit.  Under current law, a nonconsenting owner in a forced pooling situation is required to pay consenting owners 200 percent of the nonconsenting owner's proportionate share of the cost if drilling and operating the well.  This bill limits this required cost recovery to wells 5,000 feet or less in depth, and increases the required compensation to 300 percent for wells greater than 5,000 feet in depth, and for horizontal wells.  Currently, a pooling order may only be made after all mineral rights owners have been given a reasonable offer to lease their rights to an oil and gas developer.  The bill specifies that the leasing offer must be given at least 60 days before the pooling hearing, and include a copy of or link to a brochure supplied by the COGCC that describes pooling procedures and the mineral owner's legal options.
11:13:52 AM  
Matt Sura, representing himself, spoke in opposition to the bill and discussed its impact on mineral owners.  He distributed a copy of his testimony [Attachment A] and an offer to lease that was prepared by Exterra Resources, LLC [Attachment B].  He also responded to questions from the committee about the cost allocations for nonconsenting owners under the bill and discussed the information provided in offers to lease oil and gas resources.
11:18:02 AM  
Jan Rose, representing herself, spoke in opposition to the bill and responded to questions from the committee about the bill and the time and expertise needed to review a mineral lease offer.
11:19:55 AM  
Jamie Jost, Colorado Petroleum Council, Colorado Oil and Gas Association, spoke in support of the bill.  She responded to prior testimony against the bill and responded to questions from the committee about the bill.  She also discussed the cost of drilling horizontal and vertical oil and gas wells.
11:53:30 AM  
Sara Loflin, League of Oil and Gas Impacted Coloradans (LOGIC), spoke in opposition to the bill.
11:56:35 AM  
Doug Vilsack, Legislative Liaison for the Department of Natural Resources, explained the department is neutral on the bill and discussed various provisions of the bill.
11:58:20 AM  
Shawn Martini, Colorado Farm Bureau, spoke in support of the bill.
12:03:13 PM  
Jean Lin, representing herself, spoke in opposition to the bill and discussed offers to lease mineral from mineral developers and other persons.  She also responded to questions from the committee about her opposition to the bill.
12:05:05 PM  
Neal Ray, Colorado Alliance of Mineral Rights Owners, spoke in support of the bill and discussed mineral owners affected by statutory pooling orders.  He responded to questions from the committee about the statutory pooling process and the condemnation of property.  He also discussed the role of land men in negotiating mineral leases.
12:14:58 PM  
The chair closed testimony, and Senator Marble closed her remarks on the bill.

12:16:36 PM
 Motion Refer Senate Bill 18-230 to the Committee of the Whole.
Moved Marble
Seconded
Cooke Yes
Coram Yes
Donovan No
Fenberg No
Fields No
Garcia No
Jones No
Marble Yes
Scott Yes
Baumgardner Yes
Sonnenberg Yes
Final YES: 6   NO: 5   EXC: 0   ABS:  0   FINAL ACTION:  PASS