S_AGR_2018A 04/11/2018 11:10:51 AM Committee Summary

PUBLIC
STAFF SUMMARY OF MEETING
SENATE COMMITTEE ON AGRICULTURE, NATURAL RESOURCES, & ENERGY

Date

04/11/2018

Attendance
Cooke	X
Coram	*
Donovan	*
Fenberg	*
Fields	X
Garcia	X
Jones	*
Marble	X
Scott	X
Baumgardner	X
Sonnenberg	X

Time

11:10:51 AM to 12:18:00 PM

Place

SCR 357

This Meeting was called to order by

Sonnenberg

This Report was prepared by

David Beaujon

Hearing Items	Action Taken
hSB18-230	Referred to the Committee of the Whole

SB18-230 - Referred to the Committee of the Whole

Attachment Tag

File Name

Attachment

180411 AttachA.pdf

Attachment

180411 AttachB.pdf

11:12:10 AM

Senator Marble, prime-sponsor, discussed the provisions of
Senate Bill 18-230 cocnerning drilling unit pooling orders. This bill permits
the Colorado Oil and Gas Conservation Commission (COGCC) to authorize more
than one drilling unit in a pooling order for oil and gas resources. Drilling
units may cover any pool, or a portion of a pool. A statutory pooling
order must specify that a nonconsenting owner is immune from liability
for costs arising from spills, releases, damage, or injury resulting from
oil and gas operations on the drilling unit. Under current law, a
nonconsenting owner in a forced pooling situation is required to pay consenting
owners 200 percent of the nonconsenting owner's proportionate share of
the cost if drilling and operating the well. This bill limits this
required cost recovery to wells 5,000 feet or less in depth, and increases
the required compensation to 300 percent for wells greater than 5,000 feet
in depth, and for horizontal wells. Currently, a pooling order may
only be made after all mineral rights owners have been given a reasonable
offer to lease their rights to an oil and gas developer. The bill
specifies that the leasing offer must be given at least 60 days before
the pooling hearing, and include a copy of or link to a brochure supplied
by the COGCC that describes pooling procedures and the mineral owner's
legal options.

11:13:52 AM

Matt Sura, representing himself, spoke
in opposition to the bill and discussed its impact on mineral owners. He
distributed a copy of his testimony [Attachment A] and an offer to lease
that was prepared by Exterra Resources, LLC [Attachment B]. He also
responded to questions from the committee about the cost allocations for
nonconsenting owners under the bill and discussed the information provided
in offers to lease oil and gas resources.

11:18:02 AM

Jan Rose, representing herself, spoke in
opposition to the bill and responded to questions from the committee about
the bill and the time and expertise needed to review a mineral lease offer.

11:19:55 AM

Jamie Jost, Colorado Petroleum Council,
Colorado Oil and Gas Association, spoke in support of the bill. She
responded to prior testimony against the bill and responded to questions
from the committee about the bill. She also discussed the cost of
drilling horizontal and vertical oil and gas wells.

11:53:30 AM

Sara Loflin, League of Oil and Gas Impacted
Coloradans (LOGIC), spoke in opposition to the bill.

11:56:35 AM

Doug Vilsack, Legislative Liaison for the Department of Natural Resources, explained the department is neutral on the bill and discussed various provisions of the bill.

11:58:20 AM

Shawn Martini, Colorado Farm Bureau, spoke in support of the bill.

12:03:13 PM

Jean Lin, representing herself, spoke in
opposition to the bill and discussed offers to lease mineral from mineral
developers and other persons. She also responded to questions from
the committee about her opposition to the bill.

12:05:05 PM

Neal Ray, Colorado Alliance of Mineral
Rights Owners, spoke in support of the bill and discussed mineral owners
affected by statutory pooling orders. He responded to questions from
the committee about the statutory pooling process and the condemnation
of property. He also discussed the role of land men in negotiating
mineral leases.

12:14:58 PM

The chair closed testimony, and Senator
Marble closed her remarks on the bill.

12:16:36 PM	Motion	Refer Senate Bill 18-230 to the Committee of the Whole.
	Moved	Marble
	Seconded

	Cooke	Yes
	Coram	Yes
	Donovan	No
	Fenberg	No
	Fields	No
	Garcia	No
	Jones	No
	Marble	Yes
	Scott	Yes
	Baumgardner	Yes
	Sonnenberg	Yes
	Final	YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:18:00 PM

Committee Adjourned

SB18-230 - Referred to the Committee of the Whole

Colorado General Assembly