Judge Tosses Coloradans’ Beef With Forced Pooling of Mineral Rights

DENVER (CN) – Describing a Colorado community’s complaint against forced pooling of minerals as “efforts to prevent hydraulic fracturing or ‘fracking’ from occurring in their residential neighborhood,” a federal judge dismissed the lawsuit Wednesday evening.

In the lawsuit filed in 2019, the Wildgrass Oil and Gas Committee of Broomfield, Colorado, claimed to be the victim of the Colorado Oil and Gas Conservation Commission’s rubber-stamp approval for private oil and gas leases.

Because subterranean reserves of oil and gas do not adhere to property boundaries, the state devised a system of “pooling” mineral rights and distributing proceeds among owners. Oil and gas operators must make efforts to negotiate with owners, but those who refuse to consent are effectively “forced” into the pool.

“This process was intended to allow for more efficient oil and gas drilling by decreasing waste and avoiding drilling of unnecessary wells,” wrote U.S. District Judge R. Brooke Jackson wrote in his 28-page order. "Although I recognize the sincerity of the plaintiff’s concerns, I conclude that a federal court is not the appropriate forum to resolve these questions."

He added: "I am not asked to decide whether pooling or fracking is ‘good policy’ but rather whether the statute violates the First Amendment, Contracts Clause, or Due Process Clause.”

In evaluating the due process claims, Jackson did not look at whether the state complied with its own procedures, but instead pointed out Wildgrass passed over the option to ask the state to review the case before filing the federal lawsuit.

The Wildgrass subdivision is in Broomfield, a suburb sandwiched between Boulder and Denver. The property owners there banded together in July 2016 after receiving what they called “an unreasonable lease offer” from the Denver-based company Extraction Oil & Gas in June 2016.

In what the lawsuit called “the largest combined drilling project in the history of Broomfield,” Extraction Oil & Gas proposed to drill 120 wells on 10,240 acres, including the Lowell South Drilling Spacing Unit which is closest in proximity to Wildgrass.

Residents questioned the impact of drilling on health and safety; meanwhile, the city rejected three comprehensive drilling plans submitted by Extraction Oil & Gas. Nevertheless, the Colorado Oil and Gas Conservation Commission approved 13 drilling permits in 2017.

Invoking a Colorado law allowing for forced pooling, the commission sent Wildgrass members “an election letter requiring that they either elect to voluntarily participate in the large-scale residential fracking project or have their minerals pooled into the project and suffer a hefty penalty despite their myriad objections.”

Wildgrass estimated 30,000 mineral owners were impacted by forced pooling last year.

Jackson also ordered Wildgrass to pay the Colorado Oil and Gas Conservation Commission’s legal fees.

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