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NOREEN: Drilling, right here in river city

By: BARRY NOREEN
July 1, 2011
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Colorado Springs residents have been accustomed to having a huge operating cattle ranch inside the city limits for more than two decades.

Now there’s at least a chance they’ll have to get used to having a big oil or gas field inside the city limits, as well.

The latest turn of the screw in the long-running saga of the 21,500-acre Banning Lewis Ranch occurred this week when a Houston-based firm bid $26.2 million for 18,000 acres in U.S. bankruptcy court. A spokeswoman for Ultra Resources confirmed the strategy is to find out whether there is natural gas or oil on the property.

This revelation could alternately be seen as alarming or encouraging, depending upon one’s point of view — or whether you don’t mind waking up in the morning and seeing a 150-foot drill tower nearby.

Cities in Colorado have some tools at their disposal for regulating energy development within their borders, but they can’t simply block it. The city of Greeley found that out in 1992, when the Colorado Supreme Court overturned a Greeley ordinance that banned oil and gas drilling.

In May, Greeley’s planning commission was pondering one company’s plan for 62 wells in the city limits.

Oh yes, it could happen here.

Given the size of the Banning Lewis property, there are plenty of places where drilling rigs would hardly be noticed. In other locales where houses have already been built, drill rigs would be less welcome.

“This is exactly what Douglas County is going through,” said Sam Mamet, director of the Colorado Municipal League.

As a home-rule city, Colorado Springs can control some aspects, but not others. It can impose impact fees on energy companies, for instance, and drilling infrastructure is subject to business personal property taxes.

Home-rule cities have zoning and land-use powers and Banning Lewis has had a master plan in place for years.

“The home-rule questions here get muddled,” said Mamet. “It’s not black and white. There is a lot of gray area.”

One unknown variable concerns water.

Colorado Springs requires annexed territory to surrender rights to groundwater and drilling operations require a lot of water. How far the city would have to go in helping supply drillers with water is a question without an answer for now.

“I’ll be very interested to see how far the city can push that envelope,” Mamet said.

Steve Cox, chief of staff for Mayor Steve Bach, said the city is in the early phases of examining such questions.

“I don’t think anyone anticipated this would happen,” Cox said.

Very true. And the same could be said for what happens next.

Listen to Barry Noreen on KRDO NewsRadio 105.5 FM and 1240 AM at 6:35 a.m. on Fridays and read his blog updates at gazette.com

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