A high-stakes clash of economic titans is set to break out at the Capitol today, when lawmakers consider forcing energy companies to increase compensation for landowners whose property values are hurt by the uninvited roads, gas wells and heavy equipment used to extract natural gas.
This isn’t the first time the General Assembly has considered landowners’ complaints about gas drilling. But it is the first time a bill has come out of the gate backed by the real estate development industry, a powerful force that can hold its own against energy lobbyists.
House Bill 1185 would encourage energy companies to enter into surface-impact agreements with landowners before drilling on their property and force them to post a $25,000 bond for every well where an agreement was not possible. Courts would decide disputes over compensation.
Currently, companies must only post a a single $100,000 bond to cover all of their activity in the state, and landowners can only collect for damage they can prove is “unreasonable.”
The bill, scheduled to be heard by the House Transportation and Energy Committee today, represents a second attempt of its kind from Rep. Kathleen Curry, D-Gunnison. The freshman chairwoman of the House Agriculture, Livestock and Natural Resources Committee saw a similar bill die in her own committee last year, a defeat she blamed on an aggressive energy lobby.
On Tuesday, Curry called a news conference to announce the bill. Representatives from real estate and agriculture stood behind her, as did environmentalists. House Speaker Andrew Romanoff, D-Denver, and House Majority Leader Alice Madden, D-Boulder, also stood with her.
Ranchers, developers and home owners who have seen their property damaged by drilling have no way of being compensated now, she said.
Outside the Capitol media room, a lobbyist, a lawyer and a public-relations consultant for the Colorado Oil and Gas Association waited to counter that message with one of their own: The energy industry is regulated enough, it is good for Colorado and Curry’s bill will kill it, they said. Whether landowners on the surface like it or not, the owners of subsurface property rights are entitled to drill for them, they said.
In Weld County alone, oil and gas production generated more than $61 million in taxes in 2004, said lobbyist Jim Cole.
“While we’re laying the golden egg, they’re trying to pluck us and fry us,” he said.
But Cole faces more organized opposition this year.
Lined up behind Curry’s bill this year are the Colorado Association of Home Builders, the Colorado Association of Realtors, the National Association of Industrial and Office Properties, the Colorado Corn Growers Association, the Western Colorado Congress and the Colorado Environmental Coalition.
“It was not a priority last year,” said Colorado Association of Home Builders lobbyist Steve Durham. “The changing nature of the energy industry has forced us to respond. That which 10 years ago might have been an annoyance is today a significant burden on landowners.”
Staff writer Jim Hughes can be reached at 303-820-1244 or jhughes@denverpost.com.
