Drilling forced-pooling bill awaits guv’s pen

Senate Bill 18-230 takes on the issue of what’s known as forced pooling, a practice oil and gas companies can pursue as they seek to pool leases in an area known as a drilling unit. Companies can ask the Colorado Oil and Gas Conservation Commission for permission to include in those units minerals owned by people unwilling to sign leases, and compensate those people according to certain terms.

The provision is designed to foster orderly oil and gas development and let willing mineral owners benefit from leases and development, rather than a well’s drilling being stopped by holdout mineral owners. State Rep. Matt Gray, D-Broomfield, one of the recent bill’s sponsors, compared the concept to the use of eminent domain by governments to acquire easements for roads that otherwise might not be able to be built.

The recently passed bill makes clear that nonconsenting mineral owners are immune from liability for costs related to any spills, damage or injury from the drilling on the unit. It also requires that a mineral owner be given at least 60 days to consider a lease offer before a commission hearing occurs on a forced-pooling application. Currently, an unleased owner is deemed nonconsenting after refusing a reasonable written offer within 35 days.

The bill requires that a lease offer includes a copy or Internet link to a brochure the commission is preparing that will describe pooling procedures and mineral owners’ options.