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Gazette Premium Content Compromise hard to find in Colorado's latest oil and gas battle

By Megan Schrader Updated: May 19, 2014 at 12:02 pm

DENVER - Negotiations fizzled out last week as oil and gas operators try to find a middle-ground with groups who want voters to decide in November whether local governments should have some control over drilling and hydraulic fracturing.

But despite the setback - sources tell The Gazette that following the most comprehensive meetings to date, there's still no middle-ground in sight - the governor remains optimistic.

"I think we made progress. I don't think we got a solution," Gov. John Hickenlooper said on Wednesday, a day after stakeholders were invited to his office for two meetings. "We're still working on it, though, I'll guarantee that. We're already scheduling more meetings."

Hickenlooper's goal is to strike a balance between the constitutionally-guaranteed right of mineral rights owners to access their subterranean resources with the health and environmental concerns of residents who own the surface property rights above or close to oil and gas reserves.

So far, groups have proposed 11 initiatives that would ask voters whether to amend the state Constitution to include guarantees about local control over oil and gas operators. Some of the propositions suggest specific setbacks from residential and commercial development, while others would enable municipalities to set their own rules.

The majority of the propositions are backed by U.S. Rep. Jared Polis, a Democrat from Boulder, who is independently wealthy and upset by hydraulic fracturing occurring near property he owns.

Several participants in the negotiations spoke to The Gazette on the condition that their names not be used because it could compromise their role in ongoing talks.

They said the heart of the issue is getting Polis to agree to withdraw his support of the ballot measures. But any compromise would not sit well with the industry.

Negotiations for a compromise ended Tuesday without a clear path forward, they said, although there was a hint that a draft version of legislation would be circulated among stakeholders soon.

Polis' congressional office said participation in the negotiations on behalf of the congressman is being done in a personal capacity, not by his congressional staff.

Hickenlooper has said that if a legislative fix can be hammered out, he will call a special session this summer for lawmakers to take up the bill.

"If we put something on the ballot and have a 1,500 foot setback, it would be devastating to the state of the economy in Colorado," Hickenlooper said. "Natural gas is a huge, very, very good transition fuel to a greener energy future. It's too important not to keep working on it. I haven't figured out where that compromise is, where that solution is yet, but we're not going to stop, we're working on it."

Hickenlooper pulled off an unlikely compromise in November when some members of the industry agreed with environmental groups on stricter air quality regulations for operations.

And just like those negotiations, some are complaining in the local control battle that they haven't been invited to the table.

"We definitely see the merit in working together right now to develop a solution," said Michelle Smith, president of the National Association of Royalty Owners, a group that has not been privy to the negotiations. "We do believe that the voice of the mineral owners should be included in this discussion. It effects everyday families like yours or mine."

Smith said she speaks on behalf of the more than 600,000 people who own mineral rights in Colorado.

"The mineral estate is a personal property right, just like owning your house. And it's a separate commodity that you can keep or sell," Smith said. "If we are denied that interest by a ballot initiative passing, then according to the law, the Colorado Constitution, we are subject to just compensation."

She likened it to government takings of property through eminent domain where property owners are compensated. Local governments do have control over surface development, and can block some development with zoning laws without cutting checks to landowners.

Supporters of the ballot proposals say local governments should have similar say over when and where hydraulic fracturing and drilling for oil is appropriate.

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Ballot fight could be costly

If a compromise isn’t reached on local control of oil and gas drilling, the issue will likely play out with campaign efforts between now and November. The oil and gas industry and other opponents could pour millions into groups like the newly formed Coloradans for Responsible Energy Development.

And it could cost millions for the other side — groups like Coloradans for Local Control, Local Control Colorado and Citizens for Community Rights — to gather enough signatures to get the issues on the ballot.

Almost 90,000 signatures from registered voters in the state mist be handed to the secretary of state by early August to get a question on the November ballot.

Most successful petition drives rely, at least in part, on paid signature gatherers.

If the proposals go to voters, the campaign that could have impacts on other elections on the November ballot.

In general, Republicans typically oppose stricter regulation on an industry that has helped the Colorado economy recover from the recession, while Democrats have pushed for increased regulation of the oil and gas industry.

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Contact Megan Schrader

719-286-0644

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