While this publication may help residents in other Colorado counties, YOUR LAND,

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1 WHO WE ARE While this publication may help residents in other Colorado counties, YOUR LAND, YOUR RIGHTS was written specifically to assist people in Delta, Garfield and Rio Blanco Counties respond to the challenges and impacts of natural gas development. Colorado has more than 25,000 active wells. As the national energy agenda places increasing emphasis on oil and gas exploration in the Western states, more Colorado communities are feeling the unintended and irresponsible consequences of wide-scale drilling. By studying the information contained in this publication, you can be better prepared to protect your rights if oil and gas development is proposed in your community. Western Colorado Congress is a grassroots alliance of nine community groups across the Western Slope dedicated to protecting western Colorado s communities and environment. To join WCC, for more copies of this booklet, or to receive information on local attorneys or water sampling firms, please contact us at: Western Colorado Congress PO Box 1931 Grand Junction, CO (970) The following WCC community groups representing people in Delta, Garfield, Rio Blanco counties: Western Slope Environmental Resource Council P.O. Box 1612, Paonia, CO 81428, (970) , Grand Valley Citizens Alliance P.O. Box 116, Parachute, CO 81635, (970) Community Alliance of the Yampa Valley P.O. Box , Steamboat Springs, CO 80477, (970) Thank you Oil and Gas Accountability Project ( and Northern Plains ( for providing much of the material contained in this guide. YOUR LAND, YOUR RIGHTS reflects Western Colorado Congress s understanding of state and federal laws, however, we are not attorneys. Please consult an attorney for legal advice and more information. 1 YOUR LAND, YOUR RIGHTS

2 PROTECTING YOUR LAND If you own land where coal bed methane (CBM) or natural gas will be developed, you may face serious impacts. Many landowners do not own the mineral (subsurface) rights. The minerals beneath your property, like the surface property, can be subdivided so numerous parties may own portions, including the federal government, other landowners, or a corporation. In fact, if you purchase land in Colorado, 85 percent of the time that land will not include the mineral rights. This separation of surface and subsurface land rights started in the early 20 th century. When the settlers first claimed western lands, the federal government reserved many of the mineral rights. In some areas, railroad corporations obtained land from the federal government. Later, railroads reserved the mineral rights when they sold the surface to pioneers. When mineral rights are severed from the surface, the owners must accommodate each other. A surface owner cannot legally say no to mineral development on his or her property, but can influence how development occurs. This accommodation is a hard reality for many landowners. The roads, compressor stations, pipelines, wastewater pits, dust, and heavy truck traffic that come with gas development can destroy hay fields, spread noxious weeds, disrupt agricultural operations, and bring down property values. If there are no minerals under your land, gas companies may still condemn your land for a pipeline right of way. In many cases, even if you own the mineral rights, you can be forced to allow gas drilling on your property. While there are some laws protecting surface owners, only you can ensure mineral operators respect your property and your livelihood. The best tools are to be informed and know your rights. It s advisable, and often necessary, to consult an attorney. TABLE OF CONTENTS YOUR LAND, YOUR RIGHTS can help you minimize the damages to your land. Inside you will find information on: How to determine who owns the minerals under your land... page 3 Federal laws that apply to your situation... page 4 State rules that apply to your situation... pages 5 & 6 Tips for negotiating an agreement... pages 7 & 8 Tips for negotiating a lease if you own your minerals... page 9 Agency contact information... page10 YOUR LAND, YOUR RIGHTS 2

3 It is always a good idea to know who owns the mineral rights under your property and your rights as a landowner. State and federal laws provide varying levels of protection for landowners. For minerals owned privately or by the state, state laws apply. For federally owned and leased minerals, both federal and state laws apply. Laws regulating federally-owned minerals may vary depending on the law under which the surface was transferred to private ownership. Contact an attorney to find out the laws applying to you. KNOW YOUR RIGHTS A stranger in some distant corporate office telephones to say his company has leased the minerals under your land and that a bulldozer will arrive tomorrow to begin clearing the way for drilling. Is this legal? The answer is no. SOME QUESTIONS TO ASK 1. ARE THE MINERALS UNDER MY LAND LEASED? 2. IF SO, WHO LEASED THEM AND WHEN WERE THEY LEASED? 3. WHAT ARE THE LEASE TERMS, CONDITIONS AND STIPULATIONS? 4. FOR HOW MUCH MONEY WERE THE MINERALS LEASED? 5. WHEN DOES THE LEASE EXPIRE? Colorado title insurance companies are now required to tell the title insurance purchaser if there is recorded evidence that the mineral estate has been leased or severed from the surface estate. The title company must also inform the purchaser if there is a substantial likelihood that a third party holds some or all interest in oil, gas, other minerals, or geothermal energy in the property. In addition, the title company must disclose that the mineral estate may include the right to enter and use the property without the surface owner s permission. To find out which laws apply to you, first determine who owns the mineral rights. You will need a legal description of your property, which can be found on the property s Deed of Trust or in the County Clerk s office. Direct notification of surface owners typically does not occur when state or federal minerals are leased. Consequently, surface owners often do not know mineral rights have been leased to an oil or gas developer. COUNTY Take a copy of your insurance title noting your Section, Township and Range, plus any other information you have such as last name of the former owner, etc., to the County Assessor s office. Garfield County Assessor 109 8th St. #207 Glenwood Springs, CO (970) Delta County Assessor 501 Palmer, Suite 210 Delta, CO (970) Rio Blanco County Assessor 555 Main Street Meeker, CO (970) FEDERAL To determine if the Federal Government owns the minerals under your land: Bureau of Land Management (BLM) Federal Leases, BLM Public Room, 2850 Youngfield Street, Lakewood, CO (303) Federal leases are sold quarterly and the BLM advertises for the sale approximately 30 days prior. Check for details. 3 YOUR LAND, YOUR RIGHTS

4 FEDERAL LAWS THAT APPLY TO YOU Many surface owners do not know if federal minerals have been leased under their land. There is no requirement to notify surface owners that federal minerals have or are going to be leased. The lessee must adhere to both federal and state laws. 1. NOTIFICATION: A copy of a notice of intention to drill must be given to the surface owner, but surface owner permission is not required prior to entry. The exploration period begins 30 days after notice is given and lasts 60 days. During exploration, the entry onto the surface owner s land does not allow for use of mechanized equipment, the construction of roads, drill pads, or the use of hazardous materials, and may not cause more than a minimal disturbance of surface resources. 2. SURFACE OWNER AGREEMENTS: Before drilling a well, a mineral operator is required to enter into good faith negotiations with the private surface owner to reach an agreement. A federal mineral operator must negotiate with you to obtain either your consent for access, a waiver of your consent, or an agreement detailing compensation for certain property damages. If you and the mineral operator cannot agree, the operator may bypass this requirement by posting two bonds. 3. BONDS: Failure to reach agreement requires the operator to post two bonds with the BLM. The surface use bond must cover damages to crops, permanent improvements, and your land s grazing value. The bond must exceed $1,000 and be provided to you, along with a description of your right to appeal the bond. A second copy must be submitted to the BLM. Review the bond carefully. If the bond is insufficient, you may challenge it with the BLM within 30 days. If the BLM decides the bond is sufficient, you may appeal again. The reclamation bond must cover the cost of plugging wells and reclaiming and restoring land and surface waters. Standard bond amounts per company are: $10,000 per lease, $25,000 for all leases in a state, or $150,000 for all leases nationwide. If you determine the total reclamation costs will exceed the bond, you can ask the BLM to increase the bond. 4. PERMIT TO DRILL & DRILLING PLANS: Before mineral operators can begin an oil and gas operation, they must submit an Application Permit to Drill (APD) and a drilling plan. Once the APD is filed, the BLM must consult with other federal agencies and other appropriate interested parties. Surface owners have 30 days to comment. The drilling plan details the location of proposed roads, well pads, and other facilities; methods for handling waste such as garbage, sewage, and produced wastewater; reclamation plans; and other requirements. Contact the BLM field office for a copy of the drilling plan. 5. ON-SITE VISIT: Within 15 days of receiving a complete APD, the BLM must conduct an on-site inspection. You must be invited. Surface use and reclamation stipulations are developed during the inspection. By participating, you can press for tough reclamation requirements and responsible siting of roads and other infrastructure. The BLM will decide whether to incorporate your suggestions. YOUR LAND, YOUR RIGHTS 4

5 STATE RULES THAT APPLY TO YOU State Rules apply for minerals that are federal, state or privately owned. These rules are frequently changed. The Colorado Oil and Gas Conservation Commission posts all the current rules on their website at You also may comment on proposed rule changes or suggest rule changes to the COGCC. 1. WRITTEN NOTICE: Before drilling, the operator shall mail or hand-deliver a written notice to you at least 30 days prior to the date of estimated heavy equipment operations. (COGCC 305[b][1]) Operators must give seven days notice to surface owners if future operations at an existing well will cause significant surface disturbances and 30 days notice for final reclamation of the well site and access roads. If you do not receive this notice within the time frame, the drilling operator cannot begin operations. The notice must contain: the operator s name; name, address and phone number of the operator s agent concerning operations; a legal description (or plat); and a copy of the COGCC brochure summarizing surface owner rights. (COGCC 305[c][1-6]) If the drilling is scheduled on irrigated cropland between March 1 and October 31, at your request the operator is required to meet with you or your tenant to coordinate drilling operations to avoid unreasonable interference with irrigation activities. (COGCC 305[b][3]) In rare cases, the COGCC director may issue a drilling permit in less than 30 days if an operator files a sworn statement demonstrating that the operator has the right under an existing contract and the contract will be terminated unless the operator is permitted to immediately drill, or if an operator faces significant economic hardship unless drilling occurs immediately. (COGCC 303[j]) 2. CONSULTATION: The operator must make a good faith effort to consult with you to discuss the preferred timing of drilling and well and access road locations. (COGCC 306[a][2]) However, surface owner permission is not required if negotiations fail or if the operator posts a bond. The operator must ask the surface owner if he or she wants to be consulted about operations timing, well and access road locations, and reclamation activities. The operator must provide 5 YOUR LAND, YOUR RIGHTS

6 STATE RULES THAT APPLY TO YOU drill site dimensions, if known, and location of associated production or injection facilities, pipelines, roads, and any other areas to be used. If you believe that your rights have been violated, you may file a complaint addressed to the COGCC. (COGCC 336) See page 10 for COGCC contact information. 3. SURFACE USE AGREEMENTS: Surface owners and mineral operators sometimes negotiate surface use agreements to specify compensation for damages, although these agreements are not required. For negotiating tips, see pages 7 and BONDS: Though you cannot legally stop a mineral owner or lessee from accessing minerals, you are entitled to compensation for some property damages. Though the compensation will not always cover the total actual cost of damages, operators must provide financial assurance to the COGCC to protect you from unreasonable crop loss or damage caused by gas operations. Operators must also carry general liability insurance coverage for property damage or bodily injury to third parties. (COGCC 708) In Colorado, a $2,000 bond per well is required for non-irrigated land and $5,000 bond per well for irrigated land. Alternatively, the company can put up a statewide bond of $25,000 to cover all of the company s wells. The determination that crop loss or land damage is unreasonable shall be made by the Commission after the affected surface owner has filed an application. (COGCC 703) Nearly all states require companies to post a bond (held by the state) or other form of financial assurance to ensure proper well plugging and site reclamation. In Colorado, this Soil Protection and Plugging and Abandonment bond is $5,000 per well, or the operator can again have a statewide blanket of $30,000 (if that operator has less than 100 wells) or $100,000 (if the operator has more than 100 wells). The bond is released to the company if it properly terminates operations including restoration of surface lands. (COGCC 706) The cost of plugging and reclaiming a single well site can often exceed these bonding amounts making posted bonds clearly inadequate. YOUR LAND, YOUR RIGHTS 6

7 NEGOTIATING FOR YOUR RIGHTS Regardless of who owns the minerals under your land, when you are asked to sign a mineral lease, surface use agreement, or surface damage agreement you are negotiating for your land, your water and your rights. Make sure your interests are protected! Contact Western Colorado Congress for model surface use agreements. SUGGESTIONS: WHEN A GAS OPERATOR WANTS TO DEVELOP YOUR SURFACE Never sign a document or agreement on the first visit. Read all documents thoroughly, ask questions, and in all cases consult with a qualified attorney. Get the offer in writing. Take notes and/or record all meetings with the operator. Negotiate it s your right. Do not sign or agree to anything without understanding the terms and getting professional advice. Whether or not you own the minerals, operators usually offer some financial compensation for using your property. Talk to your neighbors who have negotiated oil and gas leases to learn what terms they included and what compensation they received. Stand your ground. Some operators may try to intimidate you into signing an agreement. Remove any broad or vague language or rights granted to the company. Make a list of issues important to you before negotiations begin. Research the operator s track record. Talk with others who have dealt with the same company and ask to see other leases or surface use agreements. DOCUMENTING TOOLS WHAT YOU CAN DO NOW: DOCUMENT YOUR PROPERTY Though you are entitled to compensation for unreasonable damages to your property from gas drilling, be prepared to demonstrate your property s pre-damage condition. Quantify what makes your property valuable, including irrigation water, artesian springs, crops, pastures, and other improvements. How much would you pay to replace a spring and use electricity to pump water in perpetuity? How much would it cost to replace a hay meadow? Take and date photos of springs, creeks, and meadows. Get baseline studies of your drinking water source and irrigation water. Photos (film, not digital for use in court) and video footage Soil and water baseline studies Receipts that indicate value of crops, cattle, etc. Descriptions of improvements, such as fences, irrigation systems, structures, etc. Estimated cost for replacement of improvements, crops, etc. Detailed inventories of acreage, crops, price/acre, head of cattle, etc. 7 YOUR LAND, YOUR RIGHTS

8 SURFACE USE AGREEMENTS A Surface Use Agreement (SUA) is a signed legal document stipulating your concerns that the company must honor. Before you sign an SUA, be aware that you may give up your right to sue for trespassing in the future. SUAs also may have unintended omissions (on your part) that you might not be able to renegotiate later. Keep in mind the operator does not have to agree to your requests. The following are some suggestions for what to include in a SUA. WATER ISSUES YOU MAY WANT TO ADDRESS IN YOUR SUA: The company will gather baseline water quality and quantity data from a consultant you approve of prior to drilling and is responsible for damages to water quantity and quality. The company will disclose the quantity and quality of water to be discharged or reinjected. Irrigation is not to be disrupted, and the company is responsible for the immediate repair or mitigation of any problems that arise. Make sure your water wells and springs are registered with the state engineer so you have proof of the location if something goes wrong. LAND USE ISSUES YOU MAY WANT TO ADDRESS OR INCLUDE IN YOUR SUA: The operator will disclose development plans including locations of roads, wells, pits, etc. Propose development alternatives that make sense for your land use. For example, if the operator wants to put a road in the middle of your hayfield, propose an alternate location. Ensure that the damage indemnity bond in the agreement is large enough to cover any damage. The Colorado bonding requirement is very low. You may want to ask for more. Propose any site-specific surface enhancements or benefits to your land (for example, new/repaired fences or dust mitigation) and provisions that protect your view from operations. If a compressor station will be on your property, that noise reduction and air quality equipment be installed. Be specific about how reclamation is done. For example, if you want original contours restored and native vegetation planted, note those conditions. The operator is responsible for removing hazardous materials, closing and restoring waste pits. ENFORCEABILITY OF THE AGREEMENT: Unfortunately, non-compliance of surface use agreements is commonplace. Legal action may be taken when companies fail to comply. You may want to include breach of contract provisions in your SUA such as the operator pays your attorney fees if you prevail in a suit and penalty clauses for violations of the agreement. (For example, $300/day while a pit is leaking.) YOUR LAND, YOUR RIGHTS 8

9 LEASING YOUR MINERALS Landowners who own their minerals have more power to protect their property. The following applies to those who wish to or have leased their minerals. 1. BEWARE OF SAMPLE FORMS: Sample forms tend to favor industry interests because most of the drafting is done within the industry. NEVER SIGN ON THE FIRST VISIT! 2. BECOME INFORMED: Gather as much information as possible. Know what infrastructure and facilities may be required on or under your land, research going rates for similar leases or deeds, and investigate the operator s history. Deeds and leases are freely sold or traded, so the company signing a lease may be different from the one that arrives on your property. Oil and gas leases continue for the life of production, so understand your full commitment. POSSIBLE LEASE TERMS Timely reclamation to allow current or future land use. Off-property waste disposal. Agreed-upon dispute resolution method. Compensation for damages to all land uses. Mineral owner indemnity if operations damage third parties. Attorney fees when prevailing in litigation arising from the lease. Operator compliance with all applicable laws. Owner approval of well location be granted before drilling occurs. Pipelines/transmission lines on property only serve wells on that property. Specific method of computing royalties. 3. GET WHAT YOU WANT UP FRONT: Unless limitations are specified in a lease, a court will allow all activities reasonably necessary to development, even over mineral owner objections. This might include tree cutting, employee housing, large waste lagoons, noisy compressors, and injection facilities. Get all concessions or stipulations before signing. 4. IF YOU HAVE SIGNED A LEASE: Once you have signed a lease, your leverage for negotiating is limited. However, there are still important steps you take to protect your interests. Determine the lease time limit. Most leases are subject to forfeiture if development has not occurred within a specified term. If a lease expires, you can renegotiate the terms. Watch provisions that renew your lease without your permission. If you are unhappy with the operator s plans, research and advocate for alternatives. Courts may require operators to adopt alternatives that protect you if they allow for reasonable development. Stay informed about state and federal agency rules and regulations. Some damages can be avoided by ensuring that operators comply with applicable statutes. 9 YOUR LAND, YOUR RIGHTS

10 COMPLAINTS OR EMERGENCIES COLORADO OIL AND GAS CONSERVATION COMMISSION (COGCC) 1120 Lincoln Street, Suite 801, Denver, Colorado Phone: (303) Complaint: (888) (for information on rules, leases, complaints, etc.) LOCAL COGCC REPRESENTATIVE (covers western Colorado from Montrose to Moffat County) Jaime Adkins Phone: (970) or Cell: (970) OIL & GAS COMPLAINT OR EMERGENCY CONTACT INFORMATION In case of FIRE, call Emergency Services 911 In case of LEAKING GAS, call Emergency Services 911 In case of a SPILL, 1st Call 911 to notify Hazmat 2nd Call your county s LGD (see sidebar) 3rd Call the COGCC If a TRUCK RUNS YOU OFF THE ROAD, 1st Call the Sheriff Garfield County Sheriff: (970) Delta County Sheriff: (970) Rio Blanco County Sheriff: (970) nd Call the COGCC OTHER RESOURCES Environmental Protection Agency: Colorado Division of Water Resources: (970) Bureau of Land Management Delta: Uncompahgre Field Office (970) Garfield: Glenwood Springs Field Office: (970) Rio Blanco: White River Field Office: (970) To receive more detailed information then was presented in YOUR LAND, YOUR RIGHTS contact us to receive your free copy of the Oil and Gas Accountability Project s book, Oil and Gas at Your Door? A Local Governmental Designee (LGD) is a county employee who can help you work with the industry. GARFIELD COUNTY LGD Doug Dennison Henry Building 144 East Third Street Rifle, CO Phone: (970) DELTA COUNTY LGD Bruce Bertram 501 Palmer, Suite 227 Delta, CO (970) RIO BLANCO COUNTY LGD Planning & Development Dept. 555 Main Street Meeker, CO (970) YOUR LAND, YOUR RIGHTS 10

11 Western Colorado Congress P.O. Box 1931 Grand Junction, CO NON-PROFIT ORGANIZATION U.S. POSTAGE PAID GRAND JUNCTION, CO PERMIT NO. 244 POSTAL CUSTOMER ECR-WSS DON T WAIT UNTIL THE BULLDOZERS ARE AT YOUR GATE. TAKE ACTION NOW TO PROTECT YOUR PROPERTY AND WAY OF LIFE. Join Western Colorado Congress! The voice of western Colorado s communities and environment since Your WCC membership includes membership in one of our local community groups. $30 Individual $48 Family $10 Student $18 Individual limited income $29 Family limited income $200 Valley Club $500 Canyon Club $1,000 Mesa Club $5,000 Summit Club $10,000 Fourteeners Name: Address: City: Phone: Your membership is tax-deductible with checks payable to: Western Colorado Congress, PO Box 472, Montrose, CO 81402; Printed on 100% recycled paper. Zip: