By: Izabella White
In a world where it was previously thought that one owned all that was above and all that was below his land, it seems as if Colorado is taking a big step to ensuring that this is no longer true. An obscure Colorado law allows whole neighborhoods to be forced into leasing the minerals beneath their properties as long as one person in the area consents.[i] This concept, known as forced pooling, is instrumental in developing oil and gas resources in Denver’s rapidly growing suburbs.[ii] Forced pooling gives oil and gas companies the right to drill under private property as long as there is a “reasonable” offer made by the company to the mineral rights owners as well as if at least one homeowner signs a lease.[iii] As some have said, “[r]esidents of the Wildgrass neighborhood own their patches of paradise, but they don’t control what’s under them.”[iv] This, to say the least, has generated some conflict.[v]
Colorado citizens affected by this obscure law are, unsurprisingly, not content.[vi] Many Colorado landowners are frustrated and feel as if “the deck is stacked against them.”[vii] Most individuals would be reluctant to comply with any law that considered solely the wishes of one single individual, and this is especially true when the law at issue directly affects their homes, which to many citizens represents much more than simple real estate.
In a country where democracy prevails and the rule is that the “majority wins,” Colorado seems to be overstepping some boundaries. This is especially true since so many other states either completely prohibit this type of forced pooling, or have very strict limits on it.[viii] For example, there are states that require over 50% of owners in a drilling area to consent before other owners have to join.[ix] Other states, including Kentucky, require an operator to have at least half of the mineral rights or more in an area before seeking a forced pooling order.[x] Texas, which is the center of the nation’s oil production, has strict limits on this practice, and Pennsylvania does not allow forced pooling at all, in one of the most prolific shale gas regions in the country.[xi]
This is not a new topic of issue within the state of Colorado. Colorado courts have previously struck down local bans on fracking.[xii] The Supreme Court of Colorado concluded that these fracking bans “operationally conflict” with state law as well as “materially impede” the use of state power.[xiii] This aids in concluding that the state does have an interest in ensuring that ultimate recovery of oil and gas is maximized.[xiv] However, this interest has created a lot of tension between the State and private property owners.[xv] This is especially true since Colorado’s population is rapidly growing, meaning that more individuals are moving into suburbs, which are either already affected or will eventually be affected by this fracking dilemma.[xvi]
It is important to recognize that the state does have a legitimate interest here, but where does one draw a line? If private property rights are already being invaded, what’s next?
[i] Catherine Traywick, These Suburbanites May Have No Fracking Choice, Bloomberg BusinessWeek (Oct. 3, 2017), https://www.bloomberg.com/news/articles/2017-10-03/these-suburbanites-may-have-no-fracking-choice.
[iii] Daniel Glick & Ted Wood, Fractured: Forced pooling is not mandatory swim practice, Colo. Indep. (Dec. 1, 2016), http://www.coloradoindependent.com/162718/fracking-colorado-forced-pooling.
[iv] Traywick, supra note i.
[v] Id. See also Glick, supra note iii.
[vi] Mark Jaffe, An Unwelcome Gift From Oil and Gas Developers, Denver Post (Apr. 21, 2017, 10:21 AM), http://www.denverpost.com/2017/04/21/an-unwelcome-gift-from-oil-and-gas-developers/.
[viii] Traywick, supra note i.
[x] Jaffe, supra note vi.
[xi] Traywick, supra note i.
[xii] See Bruce Finley, Colorado Supreme Court Rules State Law Trumps Local Bans on Fracking, Denver Post (May 2, 2016, 2:04 AM), http://www.denverpost.com/2016/05/02/colorado-supreme-court-rules-state-law-trumps-local-bans-on-fracking/. See also Michael Wines, Colorado Court Strikes Down Local Bans on Fracking, N.Y. Times (May 2, 2016), https://www.nytimes.com/2016/05/03/us/colorado-court-strikes-down-local-bans-on-fracking.html.
[xiv] Traywick, supra note i.