Oil & Gas
OIL AND GAS IN BRIGHTON
The City of Brighton City Council voted unanimously at the April 7, 2015 City Council meeting to approve an ordinance amending oil and gas regulations to allow for the development of oil and gas resources within the city limits while mitigating potential impacts to Brighton’s groundwater resources. The regulations adopted were drafted in cooperation with the Colorado Oil and Gas Association (COGA) and the Colorado Oil and Gas Conservation Commission (COGCC), to protect the health, safety, and general welfare of residents while providing a process for permitting oil and gas operations and facilities within the City.
The Oil and Gas Frequently Asked Questions (FAQs) below are provided by the City of Brighton to its residents and covers some of the most frequently asked questions the City receives from its residents. This FAQs guide was prepared by the City of Brighton’s Community Development Department and is not intended to serve as legal advice. The City recommends speaking with an attorney prior to signing any documents.
If you should have any further questions regarding oil and gas operations in the City of Brighton, please contact the City of Brighton at 303-655-2059 or the Colorado Oil and Gas Conversation Commission (COGCC) at 303-894-2100. There is also a toll free complaint line operated by the COGCC at 888-235-1101.
The City of Brighton’s regulations governing oil and gas operations within the City limits are found in the City’s Municipal Code, Chapter 17, Section 17-20-80 and Section 17-64, both of which can be found online at the Municode Library website.
OIL AND GAS FAQ's
I own the property that I live on. Does this mean I own the mineral rights as well?
Land ownership does not necessarily mean that you also own the rights to the minerals underground. In Colorado, as in other western states, the minerals (including oil and gas) underneath a land parcel are a separate property that can be severed from the ownership of the land. The "mineral estate," as it is called, can be sold, subdivided and leased, much like the surface property. Severing the subsurface mineral estate from the surface estate creates a "split estate."
Determining who owns the minerals under a parcel of land can be difficult, time consuming, and expensive. The title information you received when you closed on your property may or may not have contained information about the ownership of the minerals beneath that property. Even if you are given such information, it may not be accurate. Title insurance companies in Colorado do not warranty mineral ownership. Before 2002, title insurance companies were not even required to disclose whether or not the mineral estate had been leased or severed from the surface estate.
Determining the ownership of mineral rights is often answered by looking at the deed to the land. If the deed states that the property is held in “fee simple absolute” the landowner owns both the mineral and surface estate. If the deed is unclear, earlier deeds must be examined to determine if the minerals had been “reserved,” which means the owner severed the minerals from the land. Copies of property deeds are held at the county clerk and recorder office. A discussion with the county clerk will reveal if the county is likely to have the information or if the landowner would be better off hiring a landman or an attorney to research mineral ownership for a parcel of land.
Most people determine if they have minerals rights when the area is being developed for oil and gas. If an oil and gas company requests to lease your mineral rights, it is likely that you own your mineral rights. Once the lease is signed, the company will have up to two months (60 days) to fully research the title of your property all the way back to the first owner - the United States government. Once they determine that you own title to your minerals rights the company will record the lease at the clerk and recorder and, typically, pay you a signing bonus.
Why have my neighbors received a letter from an oil and gas company regarding leasing their minerals and I haven’t?
All oil and gas companies operate differently and the City cannot speak as to the actions of a private company. The answer may be that the company is interested developing the minerals in certain areas and not in others. Another reason may be that in some areas of Brighton the landowners also own mineral rights and in some areas those minerals rights were retained by a previous owner, the railroad, or the developer. (See discussion about “split estate” above).
Can I say no to companies who want to lease my minerals?
Yes. If you have minerals rights, it is your property and you may do with it what you please. However, Colorado law also allows for property owners’ rights to be “forced pooled” by an oil and gas Operator. If a company wants to develop a large area that contains several parcels, it has the right, under state law, to request a pooling order from the state which allows the company to develop the minerals under all the parcels without the mineral owner’s permission. If you are forced pooled you will get 12.5% of your proportionate share of the oil and gas development until the Operator has recouped TWICE the cost of drilling the well and completing the well. Once the well “pays out” you then become a working interest owner and get your entire share of the oil and gas development. More information can be found by viewing What is Force Pooling? (PDF).
How are applications for drilling approved?
Most oil and gas wells in the area are outside of the City limits. In those case, the decision to allow new oil and gas wells and associated facilities falls on the Colorado Oil and Gas Conservation Commission (COGCC) and the county government (Weld or Adams County).
In the rare case that a well location is proposed within Brighton, there are two processes the Operator may choose to follow. The applicant may either:
1) follow a Conditional Use Permit process, which includes a public hearing with notifications to all property owners within 300 feet of the parcel where the oil and gas facility is located as well as a posting in the newspaper and posting a sign on the property informing of the public hearing. The City Council then decides if any conditions should be applied to the application.
2) follow a Memorandum of Understanding (MOU) process, which includes a neighborhood meeting with notifications to all property owners within 1,000 feet of the parcel where the oil and gas facility is located. The MOU is signed by the City Manager instead of the City Council but, to follow this process, the City of Brighton asks the applicant to meet higher regulatory standards.
The state COGCC has greater authority than local governments to site and place conditions on oil and gas facilities. If an application is filed within the City, Brighton will request that the local permit conditions are added to the COGCC permit as well.
What is the City doing to ensure that its residents aren’t affected by oil & gas operations?
The COGCC has greater control than local governments on most oil and gas issues. However, the City works with Operators in an effort to persuade them to follow greater standards than are required by the state. The City of Brighton is working to ensure that all well sites are at least 1,000 feet from homes - rather than the 500 foot setback allowed by the state. The City also requests Operators follow higher noise as well as water and air quality standards. The City can require fencing, screening, and landscaping as well as determining traffic routes for the oil and gas industry.
How will the City regulate air, noise, & light pollution from the drilling activities? Who will monitor the pollution?
Odors, noise, and light pollution are regulated through the COGCC. The Colorado Department of Public Health and Environment (CDPHE) monitors air pollution from oil and gas development. The COGCC can be reached at 303-894-2100. There is also a toll free complaint line operated by the COGCC at 888-235-1101. CDPHE can be reached at 303-389-1687 or email@example.com.
What activities are normally associated with oil & gas development?
During normal oil and gas development, noise is common and can be 24 hours a day until all the wells are drilled and completed. Traffic may also increase around the wellpad site while the wellpad is being developed, tapering off once the well goes into production.
How long will the well equipment be onsite?
The amount of time equipment is on site varies. For drilling, it depends on the number of wells being drilled at one time. Each well generally takes 7 to 10 days to drill and another 4 days to complete. Once the drilling is done, the production equipment stays on site for the life of the well, which can be as long as 30 years.
How will the presence of wells affect nearby home values? Will home insurance costs increase? What other social or economic impacts may exist?
Colorado State University conducted a study in 2015 that found a relatively low impact on home values. The study looked at Weld County and Greeley home sales and found that there was a 1% reduction in home price for every well that was actively being drilled within ½ mile of the home at the time of the sale decision.
That being said, home prices are highly variable, particularly in recent years, so isolating one influence is very difficult. Staff is unaware of any increases in home insurance costs due to neighborhood oil and gas facilities.
How can “fracking” affect water supplies?
To ensure that neither the hydraulic fracturing fluid that is pumped through the well or the resulting oil or gas can enter the water supply, steel casings are inserted into the well to depths of between 1,000 and 4,000 feet. The space between these casings and the drilled hole (“wellbore”) is filled with cement.
Once the cement has set, then the drilling continues from the bottom of cemented steel casing to the next depth. This process is repeated, using smaller casing each time, until the oil and gas-bearing reservoir is reached, generally at a depth of 6,000 to 10,000 feet.
There have been over 40 cases of oil and gas development contaminating ground water with methane in Colorado. In every case, the contamination was due to inadequate cement between the borehole and the casing. Given that there are currently over 54,000 active wells in Colorado, the chances of water contamination are very small.
Hydraulic fracturing - the process of pumping hydraulic fracturing fluid at high pressures to fracture the rock to release more oil and gas - has not been found to cause water contamination in the state. In Colorado, the hydraulic fracturing is typically occurring more than one mile beneath the surface. While ground water is found at 60 - 600 feet below the surface - the oil and gas development and hydraulic fracturing is occurring 6,000 - 10,000 feet below the surface.
Who is responsible for any spill cleanup & decontamination?
There are many recorded spills at drilling sites. By law, companies are required to report any spill of more than 42 gallons (1 barrel) to the COGCC. Most are small incidents that are confined to the immediate area of the storage tanks or well. The companies are required to conduct all cleanup and environmental mitigation for such incidents.
TYPICAL QUESTIONS FROM THE PUBLIC ABOUT OIL AND GAS DEVELOPMENT IN COLORADO
The following is reproduced from the Colorado Oil and Gas Conservation Commission (COGCC) website and is provided as a reference.
1. HOW CAN WE STOP OIL AND GAS DEVELOPMENT IN COLORADO?
STOPPING OIL AND GAS DEVELOPMENT IN GENERAL
Question 1.a.: I own only the surface and have no interest in the oil or gas underlying my land. How can I stop oil and gas development on my property or in my area of the state? What can the Colorado Oil and Gas Conservation Commission (COGCC) do to stop additional oil and gas development?
Answer 1.a.: Colorado, like all other western states, recognizes separate ownership of the surface estate and the mineral estate and the distinct private property rights associated with each. Often, different parties own the surface and the subsurface, commonly referred to as severed or split estate lands. The different ownership may have been created through the reservation of the minerals to the government when the lands were originally patented, or may result from a decision by a previous landowner to separately sell or lease the subsurface mineral interest.
Because each party has property rights associated with the ownership of their respective estate, oil and gas companies that have purchased or leased mineral rights are entitled to exercise their property rights to develop the resource. Colorado law recognizes that access to the mineral estate from the surface estate is necessary in order to develop the mineral interest. The law provides for access to the mineral estate by allowing subsurface owners "reasonable use" of the surface estate. The COGCC did not create these legal relationships, and it does not have the statutory authority to alter these private property rights. Instead, surface and mineral interests are created or transferred through private party contracts, including deeds and leases.
In contrast, the COGCC is a state regulatory agency created by the Colorado General Assembly to promote development of the oil and gas resources throughout the state, consistent with the protection of public health, safety and welfare. Thus the COGCC may suspend operations if it finds a company is violating COGCC rules, or to protect the public from significant injury, but the COGCC cannot interfere with the private party contracts establishing the surface and mineral owners' rights to the property.
STOPPING OIL AND GAS DEVELOPMENT TO PROTECT AN INDIVIDUAL'S PROPERTY VALUE OR QUALITY OF LIFE
Question 1.b.: If COGCC is obligated to protect public health, safety and welfare, why won't they stop oil and gas development that threatens my property values or my quality of life?
Answer 1.b.: The law that created the COGCC and empowers their regulation of the oil and gas industry provides for the COGCC to promulgate rules to protect the health, safety and welfare of the general public in the conduct of oil and gas operations. The law is intended to keep the general public safe when drilling and development occurs, and is not directed at protecting individual property values or a preferred quality of life.
An example of COGCC rules enacted to protect public health, safety and welfare are the "high density rules" that apply significant restrictions on oil and gas development in areas where there is dense surface residential development on 2 acre or less equivalent lot sizes. In some cases these rules essentially preclude new oil and gas development because of safety concerns.
STOPPING OIL AND GAS DEVELOPMENT WITH RULES FOR PREVENTION AND PROTECTION
Question 1.c.: The COGCC says it has authority and rules to prevent and mitigate significant adverse environmental impacts and to provide certain types of "protection". Why won't the COGCC use those rules to stop oil and gas development?
Answer 1.c.: The COGCC's authority to prevent and mitigate significant environmental harm does not negate its obligation to encourage development of the oil and gas resource. Generally, the COGCC's authority requires it to find solutions that prevent or mitigate significant adverse environmental impacts as well as provide for oil and gas development. The COGCC therefore focuses on environmentally safe operations. In this regard, the COGCC often conditions its drilling permits to include environmental protections, and otherwise enforces its rules to prevent and mitigate significant adverse environmental impacts. In rare cases if there is no identifiable solution to prevent or mitigate significant adverse environmental impacts or to meet its "protection" type charges, the COGCC does prohibit oil and gas development by denying drilling permit application approval or through Commission orders.
2. WHY DOESN'T THE COGCC DO MORE FOR SURFACE OWNERS?
SURFACE OWNER COMPENSATION AND SURFACE DAMAGE BONDS
Question 2.a.: I thought the COGCC was supposed to "balance" oil and gas development with surface development. Why doesn't the COGCC require the oil and gas companies to pay me for the economic loss I suffer when the oil company uses part of my property for oil and gas development? Why does the COGCC grant companies permits to drill on my property when I haven't signed a surface use agreement with them?
Answer 2.a.: An oil company's right to use the surface is created by the oil and gas lease or other contract that establishes the company's right to drill. The COGCC does not create these interests and it is not authorized to interfere with these interests unless it has evidence that the operations are in violation of COGCC rules and regulations.
The law creating the COGCC requires oil companies to post a bond with the COGCC that is intended to protect surface owners from "unreasonable crop losses or land damage from the use of the premises" when a company and the surface owner have not otherwise reached agreement on surface use compensation. The COGCC's statute recognizes the existing law that provides for reasonable surface use to access the mineral estate. Therefore, only if crop losses or land damages are "unreasonable" based on what is needed to access the mineral estate does the law provide for compensation to the surface owner. No surface owners have claimed compensation under a surface damage bond for unreasonable crop loss in several years.
In practice, companies generally pay surface owners for access despite the fact the law permits reasonable access without compensation. The surface use payments companies voluntarily make to surface owners may or may not be equivalent to the economic losses perceived by those surface owners. The COGCC is not authorized however to order companies to compensate surface owners for crop loss or land damage considered "reasonable."
REQUIRING DIRECTIONAL DRILLING OR PITLESS DRILLING SYSTEMS
Question 2.b.: Why doesn't the COGCC prevent or mitigate environmental impacts by requiring companies to spend more money for special equipment and technology such as directional drilling or pitless drilling systems?
Answer 2.b.: The law empowers the COGCC "to regulate oil and gas operations so as to prevent and mitigate significant adverse environmental impacts … resulting from oil and gas operations to the extent necessary to protect public health, safety and welfare, taking into consideration cost-effectiveness and technical feasibility." Because of the statutory requirement that the COGCC take into consideration cost-effectiveness and technical feasibility the COGCC has to consider the costs of any condition imposed for environmental purposes. In some rare instances the COGCC has required directional drilling or pitless drilling systems. Generally, the COGCC does not impose these requirements because there has been no showing that the requested method is cost-effective, technically feasible, and necessary to protect the public health, safety and welfare. A surface owner may file an application for Commission hearing to make a showing that directional drilling or pitless drilling systems are necessary to protect the public health, safety and welfare taking into consideration cost-effectiveness and technical feasibility.
REQUIRING MINERAL RIGHTS HOLDERS TO ACCOMMODATE SURFACE OWNERS
Question 2.c.: In its 1997 decision in Gerrity Oil and Gas Corp. v. Magness the Colorado Supreme Court discussed the relationship between surface owners and mineral owners and stated that "[t]his 'due regard' concept requires mineral rights holders to accommodate surface owners to the fullest extent possible consistent with their right to develop the mineral estate." How does this decision affect the COGCC's regulatory authority?
Answer 2.c.: The COGCC receives its regulatory authority from the General Assembly. The Colorado Supreme Court Decision does not change the COGCC's statutory grant of authority, nor did the decision reinterpret the COGCC statute as it applies to surface and mineral owners. A legislative change to the Oil and Gas Conservation Act would be necessary to affect COGCC's regulatory authority.
The Magness decision more closely affects the private party contractual relationships between surface and mineral owners discussed above, providing that accommodation concepts be incorporated into the analysis of the reasonableness of the company's access. The decision may also affect the way lower courts decide future litigation between surface owners and mineral rights holders.
Much of the COGCC's existing statutory charge and many COGCC rules are consistent with the Magness decision. It is important to note however that the COGCC statute has not been changed to include authority to regulate the extent to which mineral rights holders must accommodate surface owners.
3. WHY IS THE COMMISSION COMPRISED OF PEOPLE FAMILIAR OR ASSOCIATED WITH THE OIL AND GAS INDUSTRY?
Question 3.a.: Can the Commission makeup be changed to include more environmentalists and surface owners so that it will be more likely to vote to stop oil and gas development?
Answer 3.a.: In 1994 the COGCC's law was amended to provide that the Commission's promotion of resource development is consistent with the protection of public health, safety and welfare. At the same time the General Assembly expanded the makeup of the Commission. The COGCC includes members with experience in the oil and gas industry, agriculture, real estate, range management, land reclamation and other environmental areas. In spite of these changes the Commission is sometimes viewed as unresponsive to surface owners and unwilling to stop oil and gas development.
Since the 1994 legislation the COGCC has promulgated some of the most comprehensive state oil and gas regulations with respect to environmental protection, reclamation, local governmental coordination, and public participation in the United States. The COGCC has acted to the extent of its current statutory authority to address surface owner concerns and control oil and gas operations. Further changing the Commission makeup without fundamentally changing and expanding its statutory authority would not make it more responsive to surface owners, or allow it to stop drilling more often. Accordingly, as long as there is severed mineral interest ownership in Colorado and law which protects the property rights of mineral rights holders to access their mineral estate, and as long as the COGCC's statute charges the COGCC with promotion of oil and gas development, the COGCC will be limited in its ability to satisfy surface owners or to stop oil and gas development, regardless of Commission makeup.
COMMISSIONER INDUSTRY EXPERIENCE REQUIREMENTS AND RELIANCE ON STAFF
Question 3.b.: The COGCC has a staff of specially trained and experienced petroleum engineers, geologists, environmental protection specialists, and field inspectors as well as legal advice from an experienced oil and gas attorney in the Attorney General's office. Why does the Commissioner makeup need to include so many industry experienced professionals? Couldn't the Commission be made up mainly of people without professional expertise or industry experience who would rely on staff advice in making technical decisions?
Answer 3.b.: The Commission functions in two types of roles; as a legislative "rule-making" body and as a court-like "adjudicatory" body. Each role requires the Commission to assess complex technical engineering, geologic, legal, operational, and economic oil and gas issues. The Commission must also have a thorough understanding of these issues in order to fulfill its statutory charges. Although staff is available in an advisory capacity, the Commissioners must exercise independent judgment on complex technical and legal issues which requires substantial experience and expertise. Accordingly, it is very typical for the General Assembly to require state boards and commissions to be composed of individuals with experience and expertise in the businesses they oversee. It would be inappropriate and in some instances illegal for staff to substitute its judgment for that of the appointed Commission officials.
COMMISSIONER CONFLICTS OF INTEREST
Question 3.c.: Because there are so many industry-experienced professionals that serve as COGCC Commissioners isn't there a danger of conflicts of interest leading to a "fox guarding the hen house" situation?
Answer 3.c.: All appointed officials are required by law to separate their personal interest from the state interests they represent. In addition, the COGCC has promulgated rules that require very high standards of professional conduct and comprehensively address conflicts of interest which meet and exceed those contained in state statutes. In practice, the Commissioners are thorough and deliberate in disclosing potential conflicts of interest and appropriately removing themselves when relevant matters come before the Commission.
4. HOW DOES THE COMMISSION PROTECT THE SAFETY OF THE GENERAL PUBLIC?
The COGCC applies a multitude of rules and permit conditions to protect the safety of the general public including: safety setbacks from dwellings for wells and production equipment; blowout prevention equipment; well and equipment safety specifications and design standards; security fencing in high density areas; and special operations safety procedures. Copies of the Commission Rules are available at no cost from our website or they can be ordered through the mail by calling our main number, 303-894-2100, or sending an to email to COGCC. Moreover, cases of public safety impacts from oil and gas operations are extremely rare and generally non-existent in Colorado.
5. HOW DOES THE COMMISSION’S AIR AND WATER QUALITY REGULATION FIT IN WITH THAT OF THE COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT (CDPHE)?
The COGCC has broad statutory authority with respect to "…impacts on any air, water, soil, or biological resource resulting from oil and gas operations…". The Air Quality Control Commission, through its staff, the CDPHE Air Pollution Control Division (APCD) regulates air quality over the entire state to minimize emissions from a variety of sources, and to ensure air quality on a statewide basis meets federal air quality standards. In addition, the COGCC has a few air-related rules specific to oil and gas operations such as flaring gas wells. The COGCC also cooperates and coordinates closely with CDPHE-APCD with respect to oil and gas operations, with the COGCC generally deferring to the expertise of CDPHE-APCD on air quality issues such as emissions and potential health impacts.
With respect to water quality the COGCC coordinates its monitoring and enforcement with the CDPHE Water Quality Control Commission (WQCC) which sets water quality standards and classifications statewide. The COGCC is responsible (and accountable to the CDPHE-WQCC) for implementing those standards and classifications with respect to ground water. The COGCC requires that Operators design and construct wells and facilities to protect ground water from contamination during oil and gas operations. If oil and gas operations entail discharges to surface waters the Operator must obtain a permit prior to discharging from the CDPHE-WQCC. As an additional safeguard, the COGCC has several rules aimed at preventing unpermitted discharges to surface waters.
6. HOW ARE OIL AND GAS IMPACTS TO WILDLIFE AND AGRICULTURAL LANDS ADDRESSED?
Oil and gas development generally affects relatively small areas averaging roughly 2 acres per well. Therefore, impacts to wildlife habitat and agricultural lands are generally relatively small. The COGCC has reclamation rules that require impacted lands to be restored to their original condition after the well is abandoned. Those rules have recently been expanded and strengthened.
Compared to other forms of land use, such as rural residential development, oil and gas development is relatively benign in its impact on wildlife and agriculture. It is temporary in that after the well is abandoned the lands can be reclaimed for wildlife habitat and agriculture. Rural residential development is generally more permanent. Wildlife biologists from the Colorado Division of Wildlife (CDOW) have advised that there are generally more impacts to wildlife from a typical rural residence than from a typical oil and gas well. State law in Colorado restricts regulation of rural residential land development to parcels smaller than 35 acres. The CDOW wildlife biologists have confirmed that gas wells developed at one well per 40 acres typically have less impact on wildlife than 35 acre ranchette development does. The COGCC considers impacts to wildlife in its regulation, and in certain cases issues orders or applies permit conditions to prevent or mitigate impacts to wildlife.
The National Environmental Policy Act (NEPA) provides for a defined "cumulative impacts" analysis for proposed projects classified as "federal actions". Colorado law does not provide for a NEPA "cumulative impacts" analysis for projects proposed on private or state-owned lands. The COGCC can consider cumulative impacts within the limits of its authority under state law.
A wildlife policy has been adopted by the oil and gas industry trade associations and many companies operating in Colorado. The CDOW and the COGCC encourage voluntary commitment to measures that prevent and mitigate impacts to wildlife.
7. WHAT IS THE BASIS FOR THE COMMISSION’S SOUND RULES AND HOW ARE THEY APPLIED?
The state noise law specifies levels of sound that the courts use to determine the extent to which the noise constitutes a public nuisance. The Commission has adopted sound rules which incorporate the same levels of sound specified in the state noise law.
The Commission’s field inspectors are equipped with sound level meters and frequently take field measurements in response to complaints. If sound levels measured from oil and gas operations exceed those specified under Commission rules, enforcement action is initiated to bring them into compliance.
8. HOW ARE THE COMMISSION RULES ENFORCED?
The Commission staff initiate enforcement actions as a result of alleged violations encountered through inspections and complaints. If the operating company fails to voluntarily agree to appropriate corrective action or an order setting fines, a hearing is scheduled for the Commission to determine if a violation exists and to order appropriate corrective actions and assess fines.
i. Colorado Revised Statutes § 10-11-123
ii. Bennett, A., and Loomis, J. (2015). Are Housing Prices Pulled Down or Pushed Up by Fracked Oil and Gas Wells? A Hedonic Price Analysis of Housing Values in Weld County, Colorado. Society and Natural Resources, 28(11), 1168-1186.
iii. Owen A. Sherwood, Jessica D. Rogers, Greg Lackey, Troy L. Burke, Stephen G. Osborn, and Joseph N Ryan. 2016. “Groundwater Methane in Relation to Oil and Gas Development and Shallow Coal Seams in the Denver-Julesburg Basin of Colorado.” Proc Natl Acad Sci USA. published ahead of print July 11, 2016, doi:10.1073/pnas.1523267113.