A Senate committee Thursday evening approved an increasingly controversial bill that would force energy companies to pay landowners for the impacts of drilling on their land, despite strong opposition from the coalition of landowners that originally backed the legislation.
For more than a decade, landowners have complained they have no power with which to bargain for compensation when oil and gas companies come to drill on their property. Seeking relief, they helped create House Bill 1185 to encourage agreements between drillers and landowners and to force the terms of compensation when such agreements can’t be reached.
But now that the bill has been amended – in the House and again Thursday – the real estate industry’s opposition to the bill is so strong that one member of the Senate Agriculture, Natural Resources and Energy Committee, Denver Democrat Dan Grossman, said he doubted the bill would survive.
“I get the feeling that, for where we are in the process, I don’t think you’re close enough to get it done,” Grossman told Hesperus Democrat Jim Isgar, the bill’s Senate sponsor.
Grossman was responding to complaints Thursday from Realtors, homebuilders, developers, environmentalists and homeowners who said the bill now does little for them. Most went further, saying it leaves them less likely to be compensated by energy companies.
The amendments have made the bill so vague that landowners will be forced into expensive litigation if they want to be compensated, said Lance Astrella, a lawyer who represents landowners.
“This bill was originally intended to help surface owners,” he said. “I think it’s a step backward.”
Jack Rigg of energy giant BP said that many energy companies are upset about the bill, too, but that most companies have come around to accept its terms.
In fact, said Ken Wonstolen, an attorney for the Colorado Oil and Gas Association, the industry has agreed to pay for something it already owns – the right to extract underground resources for which it has already paid.
“We believe we have reached across the table to find a compromise here,” Wonstolen said.
Isgar dismissed opponents’ criticism.
The bill does create incentives for the surface-use agreements landowners want, he said.
It also specifies drillers’ obligation to clean up their drilling sites, he said.
The oil and gas industry is supporting the bill only because it fears a more onerous proposal on the November ballot if nothing happens this winter, he said.
Staff writer Jim Hughes can be reached at 303-820-1244 or jhughes@denverpost.com.
