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Home My WebLink About941637.tiff 4222 Jennie St Amarillo TX 79106-6031 806 355-0023 April 2, 1994 EILL,YE L. HIX George Baxter Jell Hall Connie Harbert Barbra Kirkmeyer Bill Webster near Commissioners: This letter is written in protest of the proposed Oil & Gas Regulations as amendments to the zoning ordinance and building Codes. I am a royalty owner in Weld County. I worked eight years in a Texas Court House. My position required that I attend many meetings of the Commissioners Court. I know the pressures, the demands and responsibility of each member and the problems you deal with. I worked in the Oil & Gas industry for 38 years, fourteen of these years with Tom Vessels. I remember the discovery of the Wattenberg Gas Field in Weld County by Tom Vessels in conjunction with Amoco Production Co. This created many good jobs, gnoci income for the County. I know many of the Land- mineral owners in Weld County. Many times I was told how they depended on this money how fortunate the people in Weld County were to have this income and many of them depend. on this money now. These people are your friends, your neighbors, they pay taxes in Weld County and they also pay your salary. The Energy Companies can "pull out" of Weld County, go to other Counties or States. The Landowners cannot- Weld County is their home! Most retired. You will be placing a burden on drilling contractors, Crude Purchasers, Operators and the economy of Weld County. More Regulations are not in the interest of Weld County. The Colorado Oil & Gas Commission is a qualified, capable agency to make and enforce regulations. They understand the nature of the business. Weld County is getting tax dollars from the Oil Industry. Weld County Residents will pay more tax if there is no more drilling. I respectfully urge you to consider the harm that will result for your" County as well as the royalty owners and the O&G Industry VOTE AGAINST THIS. Thahlt you. L BIB q P.S. I am also writing this for l C � r�� LA . . Lena Mae Grant- Denver. If it were at all possible, I would be there for the meeting I will be in Denver in June should there he other meetings I WILL BE THERE. (1711 e • CG : PG; //L-/ - ��- �_\ 941637 3445 East Indianola Phoenix, Arizona 85018 April 2, 1994 Weld County Commissioners Weld County Courthouse P. O. Box 758 Greeley, Colorado 80632 Gentlemen: It has come to my attention that oil and gas regulations are being considered as amendments to Weld County's zoning ordinance and building codes. These proposed regulations, if implemented, could cause costs of oil and gas drilling and operations to become so high that continuing to drill and operate would be prohibitive. The oil and gas industry is a major contributor to Weld County's tax base and should be a major consideration. As a personal matter, I oppose curtailment of the industry because as a royalty recipient that part of my retirement income would be cut off. I cannot be in Greeley to attend the public hearing on April 6th but ask that this letter be evidence of my objection to the proposed Oil and Gas Regulations. Thank you. Sin♦9erely, ///, 7 z , FE ls�✓ /Joyce M. Newlon • Pt) /it) C/3�' /30cl 940339 March 31 , 1994 Weld County Commissioners Weld County Courthouse P. 0. Box 758 Greeley, Colorado 80632 Commissioners : George Baxter , Dale Hall , Connie Harbert , Barbara Kirkmeyer, Bill Webster It is my understanding you are proposing ammendments to county zoning ordinance and building codes. These Weld County Oil and Gas Regulations (DTD 3/3/94 ) will jeopardize my income from the natural gas and oil industry and I object strongly to the proposed regulations . The value of oil and gas income is very valuable to me personally but it is also very important to the industry' s economic impact on the county' s business and property tax base . If the County' s property tax base disappears , the amount will need to be made up from higher taxes elsewhere . We have seen what strict regulations have done to California' s economy and I strongly urge you to not act hastily and without good judgement in this halt to natural gas and oil operations in Weld County. Sincerely, 4 IbL e-41 Edith Uhrich 19164 N. Pebble Ct . Woodbridge, CA 95258 (209 ) 368-0352 de ; "z; / ' ( ; 46re 94G339 March 31 , 1994 Weld County Commissioners Weld County Court House P.O. Box 758 Greeley, CO 80632 ATTENTION: GEORGE BAXTER DALE HALL CONNIE HARBERT BARBARA KIRKMEYER BILL WEBSTER I object STRONGLY to the proposed regulations on the Weld County Oil & GAS . I feel the importance of the industry ' s economic impact on the county ' s business climate and property-tax base IS VITAL. As a royalty recipient and a retired individual the income I receive is VERY MUCH DEPENDED UPON. The impact on the country as a whole from these types of regulations on oil and gas are difinitely detrimental to us all for the future. PLEASE ! DO NOT ADOPT THESE REGULATIONS ! ! ! Sincerely, Shirle 1484 S . Ward St . Lakewood , CO 80228 /-k) CA; /Kea 940339 March 29, 1994 Weld County Commissioners Weld County Courthouse P. O. Box 758 Greeley, CO 80632 Dear County Commissioners , This letter is in reference to "Weld County Oil & Gas Regulations" and your up-coming hearing on April 6 , 1994 . We cannot help but think that the property owners in Weld County would miss the taxes that are paid by us , with gas and oil wells. We do not get all that large a payment per month, but as we are retired and on social security, it certainly helps us live some better. We have owned our 160 acres near Platteville for 20 years, and have watched Weld County progress during this period. This, we have felt, was due to the oil & gas business . Motels , restaurants, tax on truck and equipment are some of the extra income to the county. Please think these few facts over very closely and do con- sider the "C.O.G.A. Code of Conduct" before making your decisions . Compromising is a part of life. Thank you for your time and consideration. Hans JoYkfson Maude E. Johns n RT. 1 BOX 71B JUNIATA, NE 68955 cc 4' PGA /AL; gii9- ' ,6aLG 940339 March 31, 1994 Board of Weld County Commissioners P.O. Box 758 Greeley, Colorado 80632 Sirs: As a concerned Native of Weld County, Colorado, and a registered voter, I have been informed of the Oil & Gas Regulations that are to be brought up before you on Wednesday April the 6th. I strongly urge you to reconsider. I do not believe this to be a move in the right direction. I believe, as well as many of my friends, that this would lead to the demise of the Oil and Gas industry in our area. Many jobs would be lost and the unemployment rate would increase radically. this would cause an increase in the payout benefits. Also the loss of the Oil and Gas industry would eliminate the source of revenue for many of our area retail outlets as well as many other companies relying on the Oil and Gas industry. This would also lead to a loss of tax revenue. If this occurs, surely a tax increase would be inevitable. Who is going to be willing to carry the load? How are our schools going to fare? How are our public services going to continue without the tax support? I again strongly urge you to discontinue this self destructive approach to our well being. "We" cannot afford it. Are your constituents worth listening to? C T 1 . Bernhardt 509 7th St. Windsor, Colorado 80550 • /a-; c .a,' 94U339 April 4 , 1 _ d4 'delc County Uciumissioners F. l.i. cox. ;reeiev , CO ' ( 2 is entlemen : 1e Pre writint'; to re, uest that you vote a0;ainst the recently proposed Oil h Gas re,ulnli ons as amendments to its , ordinance and building codes. i,le feel this will nve an ?dverse effect on thn dexelopnlen; of oil h as it ;eld Sountty , which is an important par' of the county ! s economy . ' hap you for your cooperation in this matter, Sincerly yours , 'Lm�� 6''L ].0,arr ' u1 dx < C . on 5J Del Camin.O L ne Lont:rrlo'nt , C( a') 04 CC ' /1) hit; e,09- ' tor 6 't, t.L i 991 ! 76',e `„afr -e.0 aei a_of /Let tJ i p-t 1 ...rite- y ,ah acar 7 f'M"'' C�� /99g . fe 713 1/2-a'"J qqi J4 CO ooz;,Z g ,ten.e ,u 940339 '► March 31 , 1993 Board of Weld County CafinU.ssioners P.O. Box 758 Greeley, Colorado 80632 Re : Amendments to Zoning and Building Codes Gentlemen / Ladies As a worker in Weld County, Colorado, 1 stongly ob- ject to amending any regulations that govern Oil and Gas activity in Weld County . if passed, these regulations on Oil and Gas will damage the economy in Weld County, it will jeopardize jobs , payment to local contractors , and nearly 1 /4 of Weld school ' s tax funds . I do not believe this as being a right move towards the future. I believe as well as my friends , this could result in a shut down of Oil and Gas activity in our county , many jobs would be lost and the unemployment rate would increase . I again strongly urge this matter to be discontinued, who will be able to cover the revenue loss from Oil and Gas activity ' s . Unless the county Commissioners are willing to pay the loss of tax revenue , consider the long range tax services to be lost . Gerald E . Hayes P. 0. Box 83 Evans , colo. 80620 9a "339 TO: Board FROM: Vicky DATE: April 4 RE: Oil/Gas Hearing t********************************** Edna G. Glover 3511 Trinidad Evans, CO 80620 330-2922 Very much opposed to regulations. Will cause a real hardship. Needs income to stay in her home. Has never had any problems with oil companies. ************************************ Ted E. Amsbaugh Rural Route 1, Box 168 Bottineua, ND 58318 Opposed to the special use permits proposed by the commissioners. ************************************* Mary J. Villa 6501 Lowell Blvd. Denver, CO 80221 429-5233 Objects strongly to proposed regulations. ************************************** Pz) Nits tac_c_ 940339 MILTON H. NELSON 3521 Camden Drive Longmont, CO 80503 March 30, 1994 Mr. George Baxter Mr. Dale Hall Ms. Connie Harbert Ms. Barbara Kirkmeyer Mr. Bill Webster Weld County Commissioners Weld County Court House P. O. Box 758 Greeley, CO 80632 Re: Objection to Weld County Oil and Gas Regulations Dear Commissioners: I am writing regarding proposed Weld County Oil and Gas Regulations. I am concerned that these regulations present an unreasonable and unnecessary burden on the production of oil and gas in Weld County. I am very reliant on the income which I receive from oil and gas production in Weld County. The passage of any regulations which would impact my right to receive that income would work a severe hardship on me. In addition to the personal impact on me, it does not make sense from an economic perspective for the County to pass such burdensome regulations. The oil and gas industry provides a significant benefit to the county's economy. These regulations will adversely affect the economic health of Weld County. The oil and gas industry is a major contributor to the County's property tax base. If this base is destroyed or significantly reduced, revenues will need to be made up elsewhere to maintain County services. These additional taxes will impact other business owners as well as residential and agricultural landowners. It is my understanding that these regulations duplicate efforts made by the Colorado Oil and Gas Association to alleviate problems. The problems Weld County is attempting to address are being responded to in other forums, specifically, the State Legislature, the Department of Natural Resources of the State of Colorado, and the Oil and Gas Conservation Commission. In conclusion, these proposed regulations duplicate other efforts and represent unnecessary, unworkable, and onerous impediments to the production of oil and gas in Weld County. Yours very ru r Ptfrar Milton H. Nelson oc : /2 ; HI) Ot/9"; �9c0339 HELEN C. NELSON 3521 Camden Drive Longmont, CO 80503 March 30, 1994 Mr. George Baxter Mr. Dale Hall Ms. Connie Harbert Ms. Barbara Kirkmeyer Mr. Bill Webster Weld County Commissioners Weld County Court House P. O. Box 758 Greeley, CO 80632 Re: Objection to Weld County Oil and Gas Regulations Dear Commissioners: I am writing regarding proposed Weld County Oil and Gas Regulations. I am concerned that these regulations present an unreasonable and unnecessary burden on the production of oil and gas in Weld County. I am very reliant on the income which I receive from oil and gas production in Weld County. The passage of any regulations which would impact my right to receive that income would work a severe hardship on me. In addition to the personal impact on me, it does not make sense from an economic perspective for the County to pass such burdensome regulations. The oil and gas industry provides a significant benefit to the county's economy. These regulations will adversely affect the economic health of Weld County. The oil and gas industry is a major contributor to the County's property tax base. If this base is destroyed or significantly reduced, revenues will need to be made up elsewhere to maintain County services. These additional taxes will impact other business owners as well as residential and agricultural landowners. It is my understanding that these regulations duplicate efforts made by the Colorado Oil and Gas Association to alleviate problems. The problems Weld County is attempting to address are being responded to in other forums, specifically, the State Legislature, the Department of Natural Resources of the State of Colorado, and the Oil and Gas Conservation Commission. In conclusion, these proposed regulations duplicate other efforts and represent unnecessary, unworkable, and onerous impediments to the production of oil and gas in Weld County. Yours very truly, f . ( Helen C. Nelson )) /it /ad) �� el./14210a9 u)z n r , rr-2-ed tz mac' ' -al de _tua_gwscz__-o-- Pw ma. 4?„).4dLoLG - _ ri -- gym at-n-1.01- '71a 23 Wee gc° ; PG] tit-) CA) /3o(.r«d,v) Qtanryte_ni:e0 eP(2SGi 940339 a 3 / L 9 ,y "—z., , ,,,, zz.A._ 6, ,_0/___,_ ,L.., -O---, _ ,- ,___„„c „eci-c,d rz.....L.,r , 7-,-"-- , 7 , p /) /C .P /lie-car 4' -�¢, e 3 ie G-- p '�' l --y "^l`crA�J r„ CIEDA C DICK O9t //�� el�C�n'"tt) 9320 E CENTER AVE PL.} lL) cYl; LLB DENVER, CO 80231 - 940339 COMMISSIONER BILL WEBSTER, MARCH 31 , 1994 I WISH YOU WOULD LEAVE THE WELD COUNTY OIL AND GAS REGULATIONS AS THEY ARE. MY FAMILY HAS LIVED IN WELD COUNTY AND PAID TAXES FOR YEARS . I AM NOW RETIRED-DON' T RECEIVE A LARGE AMOUNT FROM OIL AND GAS BUT WHEN YOU'RE ON A FIXED INCOME EVERY LITTLE BIT HELPS. ALSO WITHOUT IT OUR TAXES WOULD CLIMB CONSIDERABLY. IT WOULD ALSO TAKE AWAY MUCH NEEDED JOBS FROM WELD COUNTY. I WOULD HATE TO SEE THIS HAPPEN. THANKS FOR READING MY LETTER. A VERY INTERESTED PARTY, FLORENCE CONTER 14600 E. 136TH AVE. BRIGHTON, CO . 80601 et P'; 'Vi 2.4; ,& c 4. 3333 Lucille M. -- 'imac 3649 Texas _ vreet San Diego, Ca. 92104 ' Mf'. William Webster, Commissioner P.O. Box 758 Greeley, Colorado 80632 Dear Mr. Webster Recently it has been brought to my attention that a proposed amendment to Weld County zoning ordinance and building codes represents regulations which will substantially restrict development and research. i strongly object to the proposed form which will inhibit further development and research in Weld County, Colorodo. If we are to maintain our status as a great nation, we must do all in our power to use our own natural resourses for continued energy independence. I would appreciate your reconsideration of this matter that would restrict the development of the drilling program in Weld County, Colorodo. Sincerely Mrs . Lucille M. Stimac 611,: Pe, rf6; ; prCtse ) 940339 VINSON SUPPLY VINSON SUPPLY - - COMPANY April 1, 1994 P.O.BOX 390337 3855 LIMA ST. DENVER,CO 80239-1337 To: Mr. Bill Webster (303371-0230 FAX:303-373-0160 Weld County Commissioner P.O.Box 758 Greeley, Co 80632 Re: New Weld County Regulations for the Oil and Gas Industry Mr. Webster It is very troubling to read of a political entity considering the implementation of more regulations, no matter who the intended target of rules may be. It is even more disconcerting when the "who" hits very close to home. Vinson Supply Company exists because of the oil and gas industry; and the Colorado facility and its fifteen employees are here, in a large part, to serve the producers that work in your county. Before voting for more bureaucracy and non-revenue producing paperwork, please strongly consider if there will be any oil and gas companies left to comply. When they leave, so will all of the large and small firms that service their needs. Less jobs equals less tax revenue not only for Weld County, but for the state of Colorado as well . Please don't let the actions and reactions of a very small percentage players on both sides of this issue destroy an industry and resulting tax base. Please vote against this new set of regulations and the bureaucratic nightmare that could result from their implementation. s trul 1 Rusty Lo Colorado A a Manager Vinson S p y Company d c r OG; /-11; GA) �oCc 940339 MARCH 31 , 1994 TO COMMISSIONER BILL WEBSTER, I WISH THAT YOU WOULD NOT CHANGE THE COUNTY ZONING ORDIANCE AND BUILDING CODE IN REGARD TO WELD COUNTY OIL AND GAS REGULATIONS . I AM A WIDOW, 87 YEARS OLD, WHO DEPENDS ON THIS INCOME TO SUPPLEMENT MY SOCIAL SECURITY. THE OIL & GAS INCOME IS ALSO NECESSARY TO HELP WITH TAXES . THEY ARE HIGH ENOUGH ALREADY AND IF THE OIL AND GAS STOP THAT WILL ADD TO EACH INDIVIDUAL TO MAKE UP THE DIFFERENCE. MY FAMILY HAS LIVED AND PAID TAXES IN WELD COUNTY FOR MANY YEARS . SURE HOPE YOU CAN HELP WITH THIS . THANKS FOR YOUR TIME. SINCERELY, 3e.-a-P e U./CZM`'LQ.4I LOUISE WATTENBERG 619 JESSUP, APT. A BRIGHTON, CO. 80601 : Pt; ut; ca, aocc (c n-) 940339 'A7"7" (1,o 1.:51:422 iiieile_Sr; (Vita et-c` f Ja-nt _ Fit-Q-0Q jJal: r at,° c R - e H f -z2x (� GchrGc 2 '3JY 4�- a �Cl61)-4-}r- CLAd o a w-c- ?." -r7 2--, cJ44,4, --r-co ce pf-At AA,A cc ;Q.61- FPe-; 1/Z.; 69 ; ,Sacc(5-tea) 940339 fit/Q &, 7/--77/ -CCe Qr��'� Ih, , "?O-4, Sa>fr7t.1 ,________4_,H- ' ' -L-kt-<2±) lieller---/_. 6(4.- fr, 4 "4_1,- igitict-il- el-x...,Y a_ A ej V A) ?..---n u)a"a--7,--rL & Getc, i,U tl.2_,4X E_ , _i - Pita 6 . 4-ez„,nt._ a___ tia.eiLL..t. 2.-pk__,. Ethiel Lita___,9_,' . Zit' ILL V ,�4e�ec a %e, e u 9 t ct' A 27(fate? n L -- ,16 e1 a acLat ) - s-c-cg. I Lt .ft dt 6-60L) t` rre „ - rt Baize v / C1 , ' !i-Ce. !UUL ./ 40 eta," —.� _ f J . Av e� £eeA 1rz' Aae--11/241Z1art' fe/ ,L L der _ Q (1,4224.1 ehO rth.,-,) 4, 2'/7 et a, 2_ d : IL) Ht; �-; /30c Cs c%-z-;) dC- �rx_ . • &ad et /SS//) -xi a 774x/C/ve/ Cam /qt s7e-,eez7 Kateif L rtia rzirA a � tom. acit ; 't,/cc1 G C � /40.4-7-7 / 711t licee-e-ear�C tt . .1E-1---c-rne--2-01/ 1 u LetPttelecc_to_ce %az./ _ _ - ed_z/tAte, rt 2,11- . 940333 4,tt_cbc, e__t_cii _cc, `74.0, ? Atct A '--. tit& I ' Yez_t_c_ee - v enn __e__I,L_ 121A , O,...<4_,, csi, 4) L—xtii.t kttu2,t,-ci2, — c_gs,u,a_atemetre,„(_, Lecao ,,L2A,c_ rikitA,L, t- nbte2 , eL-Pit. ..k_az_ , r / 1'('CLe-Zec af,e--6 <-___ Acc_e _ K___ 61_44 _24 9- w e — C 7 & . , , ems ; /9G) ties 4,9) eccc (s f3) ; r' 940339 KENT HICKMAN 360 Oak Avenue, Suite 140 Eaton, CO 80615 March 31, 1994 PH. (303) 454-3477 FAX(303)454-3112 Mr. W.H. Webster Weld County Commissioners P.O. Box 758 Greeley, CO 80632 Dear Mr. Webster RE: Proposed Amendment to Weld County Zoning Ordinance and Weld County Building Codes regarding Oil & Gas Activities The purpose of this letter is to express my concern with reference to the above captioned proposed amendment. I am writing from a landowner and taxpayer perspective. I own farms at Peckman, Eaton, and have rental and commercial properties in the Town of Eaton. I am concerned that the proposed changes will negatively impact the oil & gas industry in Weld County. If approved, it would delay and add considerable expense for drilling and it would potentially preclude drilling on my land. I have indebtedness on these farms and would be very pleased to have exploration on my land. While there is some aggravation with the oil and gas equipment in terms of farming but the overall impact to me financially would be very positive. As a taxpayer, if this proposal is passed, I am confident it would thwart the activity in the area which would clearly have an impact on real estate taxes. The ad valorem tax paid by oil and gas activity is very substantial plus all of the peripheral tax revenues generated by jobs and related sales tax items. If the mineral activity subsided I am confident this shortfall in revenue would have to be made up by higher ad valorem taxes on commercial, residential, and farm land. In my opinion this would be a lose lose situation. I have a lot of confidence in the present Regulatory Agency, the Oil & Gas Commission. They have a large professional staff and have decades of experience in this area. I am concerned about usurping any of their rules which have been in place for a long time with good results. Their rules and regulations are the result of many years experience. These rules were no completed in a hasty manner but through hearings with the input of all segments of the industry plus landowners. It is apparent Weld County needs to slow down and study the full impact of the changes prior to any action. 9,1C339 In summary, I am opposed to any rule changes that would supersede the Oil & Gas Commission's Rules and Regulations regarding drilling in Weld County. Clearly, my motives are financial in that if the proposed changes are approved it would potentially stop any potential drilling activity on my land and I would be hurt financially. No doubt this would financially hurt numerous other people as well. With the cessation or reduced drilling activity, clearly, more tax pressure would occur on other types of real estate including agricultural land. Thank you for your consideration. Sincerely l.6v / / 1t a n .an-- Kent Hickman 940333 MARCH 28, 1994 __„ 1195 LA MORES: RD. , ND, 1a 1 l.'._`:. :. SAN MARCO S, CA. 92069 WELD COUNTY COMMISSIONERS WELD COUNTY COURT HOUSE P. O. BOX 758 GREELEY, COLORADO 80632 ATTENTION: 2•efea.A!, WE STRONGLY URGE THAT THE PROPOSED WELD COUNTY OIL AND GAS REGULATIONS, DATED MARCH 3, 1994, Ii.E___F;FJECT,FT o WE FEEL THAT THE INDUSTRY HAS WORKED HARD FOR THE LAST TWO YEARS WITH THE STATE LEGISLATURE, THE DEPARTMENT OF NATURAL RESOURCES, THE OIL AND GAS CONSERVATION COMMISSION AND MANY CITY AND COUNTY GOVERNMENTS TO IMPOSE NEW RULES ON ITSELF TO MITIGATE CONTENTIOUS ISSUES. THESE PROPOSED REGULATIONS WOULD UNNECESSARILY RESTRICT TIlE DEVELOPMENT OF OIL AND GAS IN WELD COUNTY WHICH WOULD HAVE A SEVERE. ECONOMIC IMPACT ON THE COUNTY 'S BUSINESS CLIMATE::: AND PROPERTY TAX BASE. THE INCOME FROM THE INDUSTRY IS ALSO VERY IMPORTANT URZTANT TO US PERSONALLY. WE THANK YOU FOR `OUR CONSIDERATION. VERY TRULY YOURS, 6ef,t2 r 7-1-2-Y>'-e"-- 1 67. -)-'---1-1---->') [ AFzI.... W. ANI:) NOF:MA E. LINDEN 1313 Steele Street Denver . CO 80206 March 31 . 1994 _. ... .,.- Weld County Commissioners P . O . Box 758 Greeley , CO 80632 To the Weld County Commissioners : I am the owner of mineral rights in Weld County leased to Snyder Oil Corporation. I am most distressed by your plan to override the Colorado Gas and Oil Commission Rules and Regulations . SOCO has gone beyond necessary ordinances and codes to accommodate its neighbors . It is unfair to penalize many companies to punish a few Your proposed regulations will also deprive Weld County of needed jobs and income . Weld County must also be a good citizen and consider the rights and futures of ALL its people . Sincerely yours . Natalie S . Morris • 94C?333 L'C' Pt ; NL; c4 ; Q4rt-zetio S 4565 NO. ANJELINA CIRCLE CO. SPRINGS, CO. 80916 MARCH 30TH. , 1994 MR. BILL WEBSTER WELD COUNTY COMMISSIONER P.O. BOX 758 GREELEY, CO . DEAR MR. WEBSTER: IT IS MY UNDERSTANDING THAT YOU WILL BE PARTICIPATING IN AN INFORMAL HEARING TO CONSIDER ADDITIONAL REGULATIONS PERTAINING TO OIL AND GAS RESOURCES IN WELD COUNTY. MY WIFE AND I ARE IN OUR 70 ' S AND DEPEND TO A CONSIDERABLE EXTENT ON ROYALTIES OBTAINED FROM MINERAL RIGHTS HELD TN WELD COUNTY. RESTRICTING OIL AND GAS OPERATIONS IN WELD COUNTY, BEYOND THAT ALREADY IMPOSED BY THE COLORADO OIL AND GAS COMMISSION RULES AND REGULATIONS, WILL RESULT IN DRASTIC CURTAILMENT OF OIL RECOVERY OPERATIONS . THIS COULD CONCEIVABLY REDUCE OUR INCOME FROM THIS SOURCE TO ZERO--AND ALSO REDUCE THE OIL AND GAS RELATED INCOME TO WELD COUNTY. IN YOUR DELIBERATIONS, PLEASE CONSIDER THE INTERESTS OF SMALL ROYALTY OWNERS, WHO ARE RETIRED AND DEPEND UPON THIS INCOME . SINCERELY GEOR Rei A /940333 WATER RES. TEL :303-866-3589 Apr 011 94 7 :54 No .001 P .01 Dick Wolfe, Councilman Ward I 1009 Mapper Drive (303)8574680 Ft. Lupton, CO 80621 April 3, 1994 Clerk to the Board of County Commissioners POB 758 Greeley, CO 80632 RE: Weld County Oil and Gas Regulations Dear Clerk to the Board: According to information provided to the City of Fort Lupton on March 4,1994 and March 15,1994 from Mr.Lee Morrison,Assistant Weld County Attorney,l am enclosing comments on the proposed Weld County Oil and Gas Regulations (draft March 3, 1994) to he considered by the Board of County Commissioners at their informal hearing on April 6, 1994. Please note that all Waters of the State(lines 15-22,p.5,including sections 322.2.1 and 128.1.7)used for oil and gas drilling must comply with all applicable rules and regulations regarding the use of surface water and ground water in the South Platte River Basin. Any Waters of the State that are not used and consumed according to the Doctrine of Prior Appropriation,must legally and physically provide augmentation for all depletions. Historically, some water used for drilling purposes has come from local irrigation wells. Unless expressly permitted or decreed, such uses from irrigation wells arc strictly prohibited and illegal. Consequently, the Weld County Oil and Gas Regulations should include specific provisions to address this issue. Please advise me of any additional hearings before the Board of County Commissioners. I would be happy to provide any additional information then,if requested. Thank you for your attention to this matter. Sincerely, ick Ft.Lupton Councilman cc: Ft.Lupton Mayor and Councilmembers Mr. Jerry Pincau, Ft.Lupton City Administrator Mr. Hal Simpson, State Engineer APR 4 '94 7: 59 303 866 3589 PAGE . 001 �� PG; tfC_; ; 434"2671%.13i9434"2671%.13i9 • . r 1 • March 2A, 1994 RE: Wel d County Oil and Ga.--4 Regulations To Weld County Commissioners: Letters have been mailed out by SOCO. Prima. and Basin oil all of which I feel are coercion in nature. I feel the intent of these letters is to imply that if I don't put pressure on my elected officials these large companies will stop royal ity payments and/or shut wells in . As a landowner, royal ity recipient and tapayer of Weld County I wish to state CONTRARY to the wishes of the oil and gas companies that I indeed support you I00 in your action reguarding "Weld County Oil and Gas Regulations DTI 3/3/94." I feel it is due time that the drillers and oil comoanie,;. • pay for the actual damages they are causing. These damages include tax supported roads, structures and private property in Weld County. Thus, I encourage You to take action, now. I Remain. ,6s,4 V (.. „47 940x39 -• -• March 28, 1994 RE: Weld County Oil and Gas Regulations To Weld County Commissioners: Letters have been mailed out by SOCO, Prima. and Basin oil all of which I -feel are coercion in nature. I feel the intent of these letters is to imcly that if I don't out pressure on my elected officials these large companies will stop royal ity payments and/or shut wells in . As a landowner, royality recipient and taxpayer of Weld County I wish to state CONTRARY to the wishes of the oil and gas companies that I indeed support you 1OO in your action reguarding "Weld County Oil and Gas Regulation_ OTt' 3/3/94." I feel it i due time that the drillers and oil companies pay for the actual damages they are causing . These damages include tax supported roads, structures and private property in Weld County. Thus, I encourage you to take action . now. I Remain . ;if zrA/-1/7 CL- &`-§4_Z333 , a`-§4_Z333 • March 28 , 1994 RE: Weld County Oil and Gas Regulations To Weld County Commissioners: Letters have been mailed out by. 5GCrO, Prima. and Basin oil all of which I feel are coercion in nature. I - eel the intent of these letters is to imol y that if I don't put pressure on my elected officials these large companies will stop royality payments and/or shut wells in . (-;s a landowner, royal ity recipient and tei:payer of Welt County I wish to state CONTRARY to the wishes of the ail and gas companies that I indeed support you 10a in your action reguarding "Weld County Oil and (ryas Regulations DTD 3/3/94." I feel it is due time that the drillers and oil companies pay for the actual damages theyare causing . These damages include t.a> supoorted roads, structures and private property in Weld County . Thus, I encourage you to take action, now. I kemain , C o. Jle l �c P� ; c/9 ) l'9,1 T 3;39 George Knox 1700 Chippewa Trail Woodland Park, CO 80863 (719) 687-3905 Weld County Commissioners George Baxter Dale Hall Connie Harbert Barbara Kirkmeyer Bill Webster Weld County Court House P. O. Box 758 Greeley, CO 80632 Dear Commissioners: RE: Regulations of the Oil and Gas Industry Your regulations you are proposing will duplicate the State Oil and Gas Conservation Commission. They will do not only add an additional level of government regulations but additional costs related to use permits and other government expenses that will incur in government regulations of an industry. If you have a strong feels about adding regulations you should work with the State Oil and Gas Conservation Commission rather than increase the cost of government. As you know we are all tire of additional layers of government and high cost of government and in this time of anti government growth you are adding more government designed to halt the oil and natural gas operations in Weld County. Sincerely, George Knox , for/ William Knox Frank Knox Dewey Knox is.: 0°G) 1'k- Lv9- �OCL 9. 339 RICHARD E. & MARGARET E. CONN 2 VILLAGE NORTH DRIVE #7 HILTON HEAD ISLAND, SC 29926 (803) 681-5398 March 30, 1994 Mr. G. Baxter, Mr. D. Hall, Ms. C. Harbert, Ms. B. Kirkmeyer and Mr. B. Webster Weld County Commissioners Weld County Courthouse P. O. Box 758 Greeley, Colorado 80632 Dear Commissioners: It has just come to our attention that you have scheduled a hearing for April 9 on proposed amendments to Weld County's zoning ordinances and building codes. While it is not possible for us attend the hearing , we would like to register our concern in this matter. This concern relates to our status as investors in Snyder Oil Corporation with interests in Weld County specifically. It appears to us that the proposed regulations are overly restrictive, go beyond reasonable expectations, and both duplicate and exceed the Colorado Oil and Gas Commission Rules and Regulations unnecessarily. Indeed this might be viewed as a discriminatory action on the part of one particular county. We believe that Snyder Oil Corporation has been a pioneer in establishing and promoting many avenues to respect both the surface and mineral owners' rights and should not have its efforts "rewarded" by the losses it (and we) would incur under your proposed changes. In this situation good faith mutual efforts should be able to achieve the desired outcome without the enactment of regulations which would deprive both your local community and us as investors of the value of oil and gas income. Therefore, we respectfully request that you not proceed with the restrictive changes presently proposed. Sincerely, PCB' / i e/9) oaCr 940339 1 March 29 , 1994 i,J :jc County Commissioners Weld County Court House F-' .u . Box 758 Greeley , Colorado 80632 sear Sirs: We wish to issue a strong objection to the f:.roposed amendments: Weld County Oil and Gas Regulations ( DTD 3/3/94 . It is our feeling that these regulations will gleat.l.y jeopardize oil and gas income from our holdings in Weld County which we depend upon for our current retirement xistence . Also this curtailment of income will certainly adversely affect the well being of all Weld County citizens . ! he economic impact on the property-tax base would be severe . We are also very concerned that it will interfere with , or destroy , future exploration on this property . Thant you for considering this . Very sincerely yours , 0'9 4Vez14... O . F . Walker Mrs . D . F . Walker 3695 Co. Rd.54 E. Notasulga,AL 36866 • ey ; PG) hz-G; O9 • .6.0c 940339 • March 30, 1`. 9!� 11 Terra Lal.cesi..de Lane Chico, California 95928 Weld County Commissioners Weld County Courthouse P .0. Box 758 Greeley, Colorado 80632 I have just learned that the Weld County Commissioners are going to be voting on some proposed amendments to Weld County's zoning ordinances and building codes whidi would add more restrictive regulations to those already in effect. In my opinion, the rules and regulations of the Colorado Oil and Gas Commission together with the Code of Conduct of the Colorado Oil and Gas Association are all that are needed. Why in the world should it be necessary, for instance, to get a special use permit for every single well drilled in the county? Take a look at what all the burdensome business regula- tions and environmaltal laws have done to the economy of California . Do you really want to shut down oil and gas development in Weld County? Keep in mind the value of that income to the local community. Please vote against these proposed amendments . Sincerely, (..J.AeLely �,Q Lucille Kunsemiller de. : k;fie; Cam; 466 ' 94339 James E. Millensifer 1498 S. Fairfax St. Denver, Colorado 80222-3502 April 1, 1994 Weld County Commissioners George Baxter, Dale Hall, Connie Harbert, Barbara Kirkmeyer, Bill Webster P.O. Box 758 Greeley, Colorado 80632 Mesdames and Messieurs: We have just become aware of proposed regulations by the County Commissioners to "control every phase of oil and gas development in Weld County," including "special use permits" for every well drilled in the County. We wonder why these proposed regulations have not automatically been sent to every Weld County property owner. It is likely that every property owner in Weld County will be adversely affected by these regulations and you have given the appearance of trying to put something over on us, especially those of us who happen to be absent owners. The Millensifer Farm at 13540 Highway 85 has been in our family since 1903. It has on it one of the few two-story adobe houses in Colorado, an historic structure which we continually maintain and upgrade. The deeded water rights on the property date from 1877, indicating the house predates those water rights. Some of the funds for improvement come directly from oil and gas income. Amoco drilled the first well on our property in the early 1970s. About 18 months ago we signed an agreement with both Elk Petroleum and Snyder Oil for two more wells each, a total of four. Snyder drilled in late 1992 while Elk is scheduled to drill in the near future. As we understand the proposed regulations, you will seriously curtail the opportunity for us to maintain or improve oil and gas income from our property. We believe present State and Federal regulations adequately address oil and gas production, and in effect have already caused enough curtailment of domestic production when we need to be working harder for domestic independence. Sincerely, • ames E. Millensifer or Millensifer Farm ; /2, f/(, (99, L3ocC 940339 • 6- 7 _ -. C 72 2< < tter= ` ,12-Z"rY �C� .fLt;. „4-7,,,--(..< nL .y < A7Z c'✓ ,->:.(.-1 , 7 -`-C. '‘' ',-(. ./-% , , . O ( q� ) p / 7 / G,Y -� j +-z, --mac,-ems _� --c- /Ai-L.ZCL - p ..41 �� • //pp"cZ. �/ // ,L.�-C'Y.�� CA/cIYLG.. 1 --"{".22-6"."---c- (°i-Ty / it...,c : 2F..�,c(/ -7,-z. „ce 4Z l �--L-�l-ca'--/1-1-,-,-I, 7/ .2- _. --f _,-",,{r, �iz.( c�s'C ' , tic, y, , .��Fl =mss � �% z.,�� . /, ��a. *,,,,,,z„_,,__ -rte -<-j Kr X-tE_t'_�/.� Y� -�c.t. (2.-72- Gam. /f 7-/---.-?2/47. � ‘d- 4, �-r� !/l.�c..%( �C. c" y L C',c L_,,,_., —re`=%,L/ /lc' e LGzJ -c 7 / 9'10339 . .PR-01-94 FRI 14:57 P. 02 G L' a R 1 T O I L & G A S CORPORATION April 1, 1994 Board of County Commissioners BY FAX do Lee Morrison, Asst. County Atty. 915 Tenth Street Greeley, CO 80632 RE: HEARING RECORD ON PROPOSED OIL& GAS REGULATION Dear Lee: I am submitting this letter in lieu of any detailed comments on the proposed Weld County oil and gas regulation. My understanding is that such technical analysis will be presented on behalf of COGA. Rather, I would like to focus on the big picture, in light of my experience on behalf of Gerrity Oil & Gas Corporation, with local regulation of oil and gas activity. As you know, I was involved in negotiating with the Cities of Broomfield, Thornton and Westminster last year to develop a "model" approach to local regulation of oil and gas. And, I probably have taken more drilling applications through such processes than anyone in the industry (including 21 drillsites in Broomfield, as well as the first Boulder County permits). This experience has led me to re-examine the basis and utility of such local regulation. First of all, the preparation and presentation of the required information submission has been time-consuming and costly, averaging several "person- weeks" and some $5000 in out-of-pocket expenses (for map preparation) for each project. I do not believe that this process has served any truly useful public function. As we all recognize, local regulators have no legal ability to dictate well location, nor, ultimately, to deny an application. This makes for a rather bastardized planning review process. And, the exercise of local jurisdiction has been rather problematic for elected officials, dragging them into "no win" situations involving disaffected landowners seeking political leverage over the industry. Thus, outcomes such as the 5-4 votes by the Broomfield City Council in the face of planning staff and planning commission findings that drilling applications (by Gerrity, as well as by Vessels Oil & Gas) meet all the applicable review standards (and despite mandatory"shall issue" language in the ordinance). 4100 Pant Mississippi Avenue Suite 12W Denver,Colorado 80222 Fax 303 757.1197 Telephone 303 757.1110 PPR 1 ' 94 14: 55 e� �L/ f>`L , �'F:4 002 £339 • • • March 2S, 1994 RE: Weld County Oil and Gay Regulations • To Weld County Commissioners; Letters have been mailed out by SOCO, Prima and Basin oil all of which I feel are coercion in nature. I feel the intent of these letters is to imply that if I don't put pressure on my elected officials these large companies will stop royality payments and/or shut wells in . As a landowner, royality recipient and tar•:payer of Weld County I wish to state CONTRARY to the wishes of the oil and gas companies that I indeed support You 100 in your action r-eguarding "Weld County Oil and Gas Regulations DTD 3/3/94." I feel it is due time that the drillers and oil companies pay for the actual damage's they are causing . These damages include tax supported roads, structures and private property in Weld County. Thus, I encourage you to tae action, now. 1 Remain , c 1- .a4± - ,dfL apuz .mot 9 � GJ - Ya 910328 APR-01-94 FRI 14:57 P. 01 Facsimile Cover Sheet To: Lee Morrison Company: Weld County Phone: 1-356-4000 Fax: 1-351L-o2,+ From: Joyce D. Alden-Schuyler Company: Gerrity Oil & Gas Corporation Phone: 303-757-1110 Fax: Date: 04/01/94 Pages including this cover page: I Comments: APR 1 ' 94 14: 55 PRG .P ;S.. ., 9_0339 APR-01-94 FRI 14:57 P. 03 Essentially, all of these local regulations end up serving little more than hortatory purposes ("applicant shall comply with all applicable air, water, waste, OGCC, eta, regulations"). Exercise of local jurisdiction may, for a while, appear as if local officials are, at last, doing something about unwanted oil and gas development, but is soon revealed as an exercise in futility. I would assert that the transaction costs to both sides are far in excess of any real public benefit Why not break out of this trap? Weld County, as the most active jurisdiction for oil and gas development should think creatively and shift the paradigm. 1 suggest that you consider a multi-faceted approach: • Ask that all companies doing business in the County meet with appropriate planning, health department and emergency management personnel (in a "one-stop" setting) to review spill plans, waste management procedures, emergency response, reporting and other operational concerns. For those companies which have not addressed some of these issues in an organized fashion, this will be an opportunity to do so. County personnel will develop a working knowledge of what constitutes good operations and planning, and may even be able to assist some operators in coming up to par. I believe that most, if not all, operators would be willing to participate in such a voluntary process, certainly those which subscribe to the COGA Code of Conduct. • Participate fully in the onsite consultation process provided by Rule 802.c. This option has been available to local jurisdictions for years and has been completely unutilized. This is the opportunity to have input into the on-the- ground decisions and, frankly, it is time for local governments to "put up or shut up". Where the advance notice and onsite consultation reveal a Significant land use conflict or concern, the County would, of course, have the ability to petition the Commission to review the issuance of a drilling permit. And, under SB 177, this would occur before a reconstituted Commission given the explicit directive to protect the public health, safety and welfare. • Participate fully in the rule-making which is sure to follow enactment of SB 177, as well as the renegotiation of OGCC memoranda of understanding with the Groundwater Quality and Solid Waste Divisions of the Department of Health. Weld County will have every opportunity to shape new OGCC regulations. In addition, if the County is unwilling to rely on OGCC inspection and monitoring capabilities (despite 9 new staff positions), it should take advantage of the ability, provided in SB 177, to arrange for assignment of those functions to the County. I believe that this approach would allow the County to obtain meaningful information about oil and gas operations and companies, without degenerating APR 1 ' 94 14: 56 PRGE . 003 940339 A?R-01-94 FRI 14:58 P. 04 into a"boilerplate" paper exercise, It would provide a means for fully integrating itself into oil and gas development in the County from both an overall (regulatory) and site-specific (permitting) perspective. And, it would allow the County to assure itself that operations are being conducted in accordance with the rules. Finally, it will not impose unnecessary costs and regulatory burdens on the industry. Instead, this approach would be a model of cooperation and accommodation. I urge the Commissioners to take a step back and give this alternative their full consideration. Sincerely, VeK- Kenneth A. Wonstolen Corporate Counsel, Environmental & Public Affairs APR 1 ' 64 14 : 56 PAGE,. A0^ 940339 •'J�-Gk / ,`fie ' ' 1. //51r � frn'--' ' LLL ii din t� . Vim• 7' 2 ' ( i 0741,)/ l�Le�) LCA,-IC,.tip• ,/:6412 ✓�y,: G' V17LN' P.e on, io1,frje ate, 6-I1 A J 21 id 9 , i - J f I -/� )i9 "V'e&-(13.1- hi ✓/✓iii-74` tJ�q ' y/, � r czcLy, BUJ �li 1, i.,l/..' /7„5.7t2_ ,;,,,,_ J�._./ ' 0, T.exkn,; L.,,LC 2 L. ?yra- "-,;'Y,_,, Krieger CG; Pt; M ; CA j 46ccc_ 20255 V.C. 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' ATTORNEYS AT LAW JOHN F.WELBORN 1700 BROADWAY,SUITE 1820 DENVER.COLORADO 80290-1801 - -'� OF F.WELL STEPHEN J.SULLIVAN ROBERT F.WELBORN JOHN F.NECK TELEPHONE(303)830-2500 KEITHO.TOOLEY FACSIMILE(303)832-2366 _ SPECIAL COUNSEL MOLLY SOMMERVILLE - JOHN{.COWAN KAREN OSTRANDER-KRUG " MARLA E VALDE= April 1, 1994 Bill Webster, Chair Via Hand Delivery County Commissioner, Weld County 915 10th Street Greeley, CO 80631 George Baxter County Commissioner, Weld County 915 10th Street Greeley, CO 80631 Dale Hall County Commissioner, Weld County 915 10th Street Greeley, CO 80631 Connie Harbert County Commissioner, Weld County 915 10th Street Greeley, CO 80631 Barbara Kirkmeyer County Commissioner, Weld County 915 10th Street Greeley, CO 80631 Re: Comments for Proposed Weld County Oil and Gas Regulations Draft Dated March 3, 1994 Members of the Weld County Board of County Commissioners: We enclose for each of you a notebook of comments and other information which we submit on behalf of several natural gas and oil companies which are actively engaged in oil and gas operations in Weld County and also on behalf of the Colorado Oil and Gas Association ("COGA"). The companies that submit these comments are Amoco Production Company, Associated Natural Gas, Inc., Basin Exploration, Inc., Freedom Energy, Inc., HS Resources, Inc., North American Resources Company, Prima Energy Corporation, Snyder Oil Corporation and Vessels Oil & Gas Company. The documents are the response of the companies and COGA to the Weld County Oil & Gas Regulations (Draft dated March 3, 94C0339 ,,,paper WELBuRN SULLIVAN MECK 6e TOOLcY, P.C. April 1, 1994 Page 2 1994) and are for your consideration at the informal hearing for the proposed regulations on April 6, 1994. The information consists of several parts. We have provided comments to you which are both general and specific to the proposed regulations, and we have also included some analyses of legal issues raised by them. Two of the parts in the submission are in outline form. We have included an outline of some of the constitutional law issues that was prepared by Professor Jan Laitos, professor of constitutional law and land use law at the University of Denver, and an outline of an economic study that COGA intends to develop which would describe the impacts of the proposed regulations on both industry and the County. This information may be developed and provided to you at a later time as the need arises. This submission is not intended to be comprehensive in any respect, and we expect to provide you with additional information. Thank you for the opportunity to provide these comments to you and for your consideration of them. Very truly yours, Molly Sommerville MLS/jkm Enclosures cc: (w/enc.) Lee Morrison (w/o enc.) David Brody, Esq., Amoco Production Company Mark Mauz, Associated Natural Gas, Inc. Howard Boigon, Esq., Basin Exploration, Inc. Reed Fischer, Freedom Energy, Inc. Ron Jacobs, Esq. HS Resources, Inc. Mike Morgan, Esq., North American Resources Company John Longwell, Esq., Prima Energy Company Diana TenEycke, Snyder Oil Corporation Morgan Connor, Vessels Oil & Gas Company William Lancaster, COGA 940339 WELD COUNTY PROPOSED OIL AND GAS REGULATIONS (DRAFT DATED MARCH 3, 1994) COMMENTS Amoco Production Company, Associated Natural Gas, Inc., Basin Exploration, Freedom Energy, Inc., HS Resources, Inc., North American Resources Company, Prima Energy Corporation, Snyder Oil Corporation, Vessels Oil & Gas Company and Colorado Oil and Gas Association ("COGA") Submitted by: John F. Welborn, Esq. Molly Sommerville, Esq. WELBORN, SULLIVAN, MECK & TOOLEY, P.C. 1700 Broadway, Suite 1820 Denver, Colorado 80290-1801 940333 TABLE OF CONTENTS 1. Introduction 2. Part 1 A. General Comments B. Specific Comments C. Chart of Legal Analysis of Proposed Regulations D. Memorandum of Authorities 3. Part 2 COGA Code of Conduct 4. Part 3 Economic Study Outline (Study to be provided) 5. Part 4 Outline of Constitutional Arguments 6. Part 5 Analysis of Financial Assurance and Insurance Requirements 1-A:\ATTACFMENT.1 911.;33.9 WELD COUNTY PROPOSED OIL AND GAS REGULATIONS These comments are submitted to members of the Board of County Commissioners of Weld County for their consideration at an informal hearing to be held before the Board on April 6, 1994 to consider oil and gas regulations included in draft regulations dated March 3, 1994. These comments constitute the response of certain oil and gas companies and trade organizations that include Amoco Production Company, Associated Natural Gas, Inc., Basin Exploration, Inc., Freedom Energy, Inc., HS Resources, Inc., North American Resources Company, Prima Energy Corporation, Snyder Oil Corporation and Vessels Oil & Gas Company (the "Companies") and the Colorado Oil and Gas Association ("COGA"). I. INTRODUCTION A. Overview of Concerns The proposed regulations provide for a procedure whereby oil and gas operators will be required to obtain a special use permit from Weld County in addition to the permit that the operator is required to obtain from the State through the Colorado Oil and Gas Conservation Commission ("COGCC"). The proposed County permit procedure contemplates that the operator will submit a variety of plans covering a multitude of issues as well as providing for multiple reviews by several County departments. The regulations do not provide standards to review and approve permit applications or any timelines in which the review will take place. The regulations would also have the effect of allowing discretionary permit denial for activities which the State, through the COGCC, permits. They impose expensive operational requirements that would make many existing and future oil and gas operations uneconomic to undertake. If the regulations are adopted in anything like their proposed form, there would likely be an enormous adverse impact on the oil and gas industry in Weld County, and a concomitant severe financial impact on the County and its residents. We believe that the regulatory scheme that the County proposes is not workable and is in large part preempted by state law and regulations. The scheme would not work because of the large volume of oil and gas activity in Weld County and the scope of activities that the permitting process would cover. The COGCC processed 1,417 permit applications for wells in Weld County during 1993 and hundreds more recompletion applications. Numerous recompletions were conducted by operators, and countless reworkings, equipment installations and modifications and other related activities were performed. The County proposes to subject all of these activities to the burden of a use by special review permitting procedure without the staff or expertise to handle the enormous workload that this would entail. Even the COGCC, which does not attempt to implement the type of detailed permitting procedure contemplated by the County's proposal, has difficulty keeping up with the volume of activity. The County could not hope to do so without an enormous increase in staff. Even then, the necessary result of the 1-A:\COMNTSME y'1vtAJJ implementation of this permitting system would be a significant slowdown of oil and gas activity in the County. In addition, the operational requirements of the proposed regulations would make many properties uneconomic to drill or produce. Examples of such requirements include financial assurance requirements, mandated insurance coverage of environmental impacts, and soil and groundwater testing and remediation. The loss of economic viability of some wells from such measures, or the inability to develop properties in an orderly and timely manner that would result from an overburdened or inadequate regulatory system, would deprive operators and royalty owners of the benefits of their resources and could result in the type of waste of resources that the State Oil and Gas Conservation Act is expressly designed to prevent. Apart from the infeasibility of the proposed regulations, we believe that the proposed regulations go well beyond the power of the County to regulate oil and gas operations in several important areas. The COGCC, the expert agency charged by the State with regulating oil and gas activities, issues permits for drilling and recompletions as well as ancillary activities such as water disposal wells, and regulates almost all of the matters that the County attempts to address in the proposed regulations. Senate Bill 177 will strengthen the statutory authority of the COGCC with respect to matters of public health, safety and welfare, the mitigation of environmental impacts from oil and gas operations, reclamation of land and soil, and requirements for financial assurance from operators. Senate Bill 177 will also significantly strengthen the authority of the COGCC to enforce its regulations by providing for a penalty schedule, issuance of cease and desist orders and the suspension, modification and revocation of permits.' The State has therefore evidenced its intent to fully regulate with the result that further regulation by local government entities is not necessary and is not authorized except in the limited area of local land use. The proposed regulations go far beyond land use. The County proposes not only to duplicate the permitting activity of the COGCC but to exceed what the COGCC has determined is feasible or useful. Most of the proposed regulations cover matters that are already covered in COGCC regulations and are within the specific statutory authority of the COGCC and for which the COGCC has carefully considered and adopted specific regulations. In several provisions the County simply inserts COGCC regulations as its own or expressly requires the operator to comply with specific COGCC regulations. The net effect is that the County asserts authority to review and approve or disapprove matters which the COGCC has authorized and comprehensively regulated. As discussed in our attached comments in more detail, such authority is preempted by the State. The Weld County proposed regulations are more expansive and would have a much greater impact on our industry than any other set of regulations we have seen to date. The The Bill has passed through the House Agricultural Committee and is presently being reviewed in House Appropriations. 1-A:\COMNTSME 2 1.).4-6339 County must understand that the industry has millions of dollars worth of undeveloped mineral interests at stake in these proceedings. In some cases, the continued viability of a company and the livelihood of its employees may depend upon how the County proceeds in this matter. The County should also understand that it too has much at stake. Recent COGCC records reflect that there are approximately 6,287 active oil and gas wells in the County. The COGCC records also indicate that the COGCC has issued 233 permits to various oil and gas companies to drill additional wells in the County during the first ten weeks of 1994. Revenues to Weld County from oil and gas operations come from production and property (ad valorem) taxes and a portion of state severance taxes. Weld County also receives benefits from oil and gas operations in the form of receipts from federal mineral leases, retail sales and use taxes (primarily from drilling contractors), permitting fees, and potential royalties as a mineral interest owner. The natural gas and oil industries provided 22% of total tax revenues to the County in 1992 from ad valorem taxes alone. The industry invested nearly $200,000,000 in Weld County last year, much of which went to contractors based in the County or to employees who live and work in the County. The industry paid in excess of $20,000,000 in royalties last year to Weld County mineral owners. Industry expects these numbers to increase over the next several years if projected activity levels are met. The County needs to consider carefully the potential impact on the County economy of enacting regulations that could have a significant impact on the timing and the cost of the operations generating these benefits. We urge the County to defer its consideration of these proposed oil and gas regulations. There have been many recent state regulatory developments and improvements in industry operating practices that we believe have addressed the most significant concerns resulting from the increase in oil and gas activity in Weld County. These include in particular: • Agreement on Senate Bill 177 by a broad coalition of local governments (including Weld County representatives), agricultural groups, environmental groups, and the natural gas and oil industry. This bill, as described above, will expand the authority of the OGCC to regulate and to address improper practices. The industry has supported a significant increase in the COGCC's budget to fund the proposed personnel to implement the bill. • Enactment of the Wattenberg Rules by the COGCC, after significant discussion and input from all affected groups, to provide better notice and consultation to surface owners, to improve reclamation practices, and to provide dispute resolution opportunities. • Enactment of the E and P waste rules by the COGCC, which provide detailed requirements for the operation and closure of pits and for the handling, treatment and disposal of wastes generated by oil and gas activities. t-A:\COMNTSME 3 34C339 • Adoption of the Code of Conduct by COGA, which commits the industry to an unprecedented set of ethics and business practices to accommodate the concerns of local governments and their citizens. In view of these developments, we think it is premature for the County to consider its own regulations at this time. We believe that the County must give these measures time to work, however, if the Board still wants to go forward with a consideration of an appropriate, limited County approach, we renew the offer we made to the Board in August 1993 to work with the Board and its staff to provide technical and legal input to the County as it considers any regulations that it believes are necessary. B. Summary of Position The following highlights the position of COGA and the Companies with respect to the proposed regulations. This position is described in more detail in the general and specific comments in this submission. • The special use permitting system for oil and gas facilities contemplated by the proposed regulations will not work in view of the volume of oil and gas activity in the County and the breadth of the proposed permitting requirements (e.g., permits would be required for every rework, equipment change, and flowline installation, in addition to drilling and recompletion activities). • The County has no authority to deny a permit for an activity that has been approved by the COGCC, and it cannot impose conditions on the approval of a permit that are discretionary in nature. • The special use permitting procedure includes no objective standards by which Planning Services is to review applications or impose permit conditions. No timelines or appeals procedures are included. Such deficiencies deprive operators of due process. • A special use permitting procedure may have application to urban areas such as Broomfield, Thornton, Westminster and Greeley. It is not an appropriate mechanism for the sparsely populated areas of unincorporated Weld County. • Specific operational requirements in the proposed regulations impose onerous and unfair burdens and costs on the industry and do not apply to other industries and operators in the County (e.g., requirements for soil and groundwater sampling and remediation are not imposed on agricultural operations which affect natural resources to a greater extent than oil and gas operations). Such requirements deny equal protection of the law to operators and interfere with the State objective to maximize the development of oil and gas. 1-A:\COMNTSME 4 340333 • The authority of the County to regulate oil and gas operations is strictly limited to legitimate land use matters such as noise and visual impact mitigation, wildlife impact mitigation, floodplain management and public roads management. The proposed regulations are not limited to these matters. • The County is preempted by state law and regulations from regulating all technical aspects of oil and gas operations. Technical matters are broadly defined to include drilling, pumping, plugging, waste provisions, safety precautions, reclamation and environmental restoration, among other matters, all of which are attempted to be addressed by the proposed regulations. • The County is preempted by state law and regulations from adopting regulations that relate to matters which have been comprehensively addressed by the COGCC including, without limitation, financial assurance requirements, the management of exploration and production wastes and all matters considered in the formulation of the Wattenberg Special Area Rules. The proposed regulations purport to regulate such matters. • The proposed regulations attempt to establish County jurisdiction to enforce state law or regulations by adopting regulations that are identical to state regulations or that require an operator to comply with state regulations. The exercise of County authority to enforce state law is beyond the County's statutory authority and creates an inherent conflict with State objectives. • The proposed regulations would impair the vested property and contractual rights of mineral interest owners by granting to surface owners rights that negate the dominant estate of mineral owners or that are inconsistent with oil and gas leases or other agreements that have been negotiated between the parties. • The proposed regulations are so burdensome that they would severely restrict the ability of the industry to operate in Weld County and would negate the viability of many properties. Recent judicial developments recognize that such a result amounts to a taking within the meaning of the United States and Colorado Constitutions which would require the County to pay compensation to companies that had been deprived of their investment backed expectations. • The proposed regulations are in many respects vague or arbitrary and to that extent deny due process of law. • The proposed regulations would apply retroactively to vested rights and to that extent will violate constitutional rights. 1-A:\COMNTSME 5 '-"^"339 II. FORMAT OF COMMENTS These comments are presented in five parts. Part 1 includes general and specific comments with respect to the draft regulations. The general comments address certain issues or themes in the proposed regulations and outline the reasons that many of the provisions in the regulations are legally insupportable. The specific comments describe concerns with the legal or practical effect of particular provisions in the proposed regulations and are not intended to limit our position that the proposed regulatory scheme as a whole is not workable. Also included in Part 1 is a Memorandum of Authorities in which we analyze the legal basis to challenge provisions in the proposed regulations and a chart that depicts how some of the legal arguments apply to specific provisions in the regulations. The Memorandum of Authorities is not intended to be an exhaustive legal analysis but rather a preliminary overview of the primary principles and authorities that we believe are applicable. Part 2 is a Code of Conduct that has been adopted by COGA. We ask that you carefully consider the Code in your deliberations. The member companies in the Code make a commitment to local jurisdictions to engage in the reasonable, responsible and safe development of their oil and gas interests within the State. They acknowledge that they will be required to comply with reasonable land use regulations that local jurisdictions adopt to mitigate land use impacts. This Code of Conduct is unprecedented in Colorado and reflects a commitment by COGA's members to respect the concerns of Weld County residents. They also request that you respect their right to develop their valuable oil and gas reserves in a safe, efficient and reasonable manner. Part 3 is a critical component in these comments. It is an outline of an economic study which COGA is currently in the process of developing and which we intend to provide to you before any formal hearings on the proposed regulations take place. We expect that the final study will consist of the following: (1) An analysis of revenues to Weld County from natural gas and oil development within the County. (2) An analysis of costs that will be incurred by natural gas and oil companies to comply with the regulations as they are proposed. (3) An analysis of the impact on the County of lost revenues from natural gas and oil operations. (4) An analysis of the costs to the County to implement the proposed regulations. Part 4 is an outline of constitutional law issues that the proposed regulations raise. The outline was prepared by Professor Jan Laitos, professor of constitutional law and land use law at the University of Denver College of Law and a recognized national expert in his field. Professor Laitos believes that substantial constitutional issues are raised by the proposed regulations and that they could amount to a taking within the meaning of the Fifth Amendment to the United States Constitution for which the County would be required to pay compensation. Part 5 includes information with respect to financial assurance and insurance requirements that are included in the proposed regulations. Authorities in the insurance field point out in the documents included in Part 5 that financial assurance requirements substantially impact the • 1-A:\COMNTSME 6 340339 amount of working capital that a company has available to explore and develop its oil and gas reserves and that plugging and lease bonds are difficult to obtain because they are irrevocable, unsecured, non-cancelable and may never truly be released. Part 5 also includes a description of the availability of insurance that includes a pollution exclusion clause and explains that insurance that covers all environmental damage is not available. I-A:\COMNTSME 7 :0333 GENERAL COMMENTS These general comments include legal and practical issues raised by provisions in the proposed regulations. The charts attached to these comments as Attachment A graphically depict the provisions in the proposed regulations to which certain arguments in these general comments apply. Attachment B is a Memorandum of Authorities that further briefs some of the legal arguments. 1. The COGCC Regulations and the Act Establish a Comprehensive Regulatory Scheme for Oil and Gas Operations so That All Local Regulation is Preempted Except With Respect to the Narrow Area of Land Use. The Colorado Supreme Court held in the cases of Bowen/Edwards v. Board of County Commissioners' and Lundvall Bros., Inc. v. Voss' that the Colorado Oil and Gas Conservation Act (the "Act") did not at the time totally preempt local jurisdictions from adopting legitimate land use regulations covering oil and gas operations. The Court held, however, that a partial preemption occurs where there is an operational conflict between a local regulation and a state regulation. An operational conflict exists whenever the local regulation goes further than the state regulation and when the COGCC has comprehensively regulated the subject. Since the Colorado Supreme Court decided the Voss case and the Bowen/Edwards case, the COGCC has adopted additional regulations that cover many more aspects of oil and gas operations so that the area in which a local jurisdiction can regulate has become even more circumscribed. Areas regulated by the COGCC include, without limitation, the following: • the number, location and spacing of oil and gas wells; • the manner in which oil and gas wells and injection wells are drilled, equipped, cased and completed so as to protect potable aquifers; • the manner in which wells are drilled and operated so as to ensure a safe working environment and a safe environment for the public who are proximate to such wells; • the handling of exploration and production wastes generated by oil and gas operations and the construction and location of surface pits and other waste disposal facilities; • the distance between oil and gas wells and non-oil and gas surface structures, especially inhabited structures; 2 812 P.2d 656 (Colo. App. 1990) aff'd. in part and rev'd in part, 831 P.2d 1045 (Colo. 1992). ' 812 P.2d 693 (16 Colo. App. 1990) aff'd Voss v. Lundvall Bros., Inc. 831 P.2d 1061 (Colo. 1992). I-A:\COMNTSME 8 9i10339 • the underground disposal of water produced by oil and gas operations so as to protect potable aquifers and to prevent adverse surface impacts; • the manner in which wells and well sites are plugged, abandoned and reclaimed; • the furnishing of absolute security by the operator to insure the availability of funds for proper plugging, abandonment and reclamation; • a mechanism for participation by local governments in the location of wells and well facilities; • special requirements and setbacks pertaining to oil and gas operations which occur in high density areas so that the 150 foot setback requirement from buildings and occupied structures is increased to 350 feet in such areas; • regulation of the noise emitted by and the aesthetic impacts of oil and gas operations; • standards for signage which must accompany all oil and gas operations in the field; • prohibition against heavy equipment activity at an oil and gas well site unless and until the surface owner has received proper notice of such proposed activity and has been given the opportunity to consult with the mineral owner/lessee in the location of the surface activities and facilities necessary for the proposed oil and gas operations; • the opportunity for the surface owner to consult with the oil and gas operator concerning compensation to be paid for certain surface damages caused by oil and gas operations; • soil protection and site reclamation procedures which include the segregation and stockpiling of topsoil, seed bed preparation and revegetation maintenance. 2. All Local Regulation of Technical Matters is Preempted. The Colorado Supreme Court held in Bowen/Edwards v. Board of County Commissioners," that the State requires uniform regulation of the technical aspects of oil and gas operations to achieve the state purpose of the efficient and equitable development and production of oil and gas resources and concluded that all local regulation of technical matters a Supra See also, Oborne v. Board of County Commissioners, 764 P.2d 397 (Colo. App. 1981). 1-A:\COMNTSME 9 940339 is preempted. Examples of technical matters referred to by the Bowen/Edwards court include "drilling, pumping, plugging, waste prevention, safety precautions and environmental restoration."' Other technical matters include reclamation, bonding for reclamation, protection of water supplies and the disposal of wastes, assurances regarding surface spills, independent monitoring requirements and other similar development, maintenance and production matters.' With respect to technical matters, local regulation is preempted in all aspects a) even where there is no regulation on point and b) where the local regulation is identical to the state regulation. Specific provisions in the proposed regulations which are technical and, therefore, preempted include, without limitation, the following: • Reclamation requirements in Sections 110.7, 110.9A., 120.7 et sue., and 126; • Waste disposal and management requirements in Sections 110.13, 122 et 127 and 128; • Surface owner requirements in Sections 120.7.1.3, 120.7.1.4, 120.7.1.5, 120.7.2 and 120.9; • Financial assurance and insurance requirements in Sections 110.6, 120.1 and 120.2, 126 and 130; • Aquifer protection and water quality requirements in Section 120.18.3; and • Definitions for E and P Waste Site, Exploration and Production Wastes, Pit, Production Pit, Reserve Pit, Special Purpose Pit, Subsurface Disposal Facility and Waters of the State. 3. Local Regulations That Are More Stringent Than State Regulations Are Preempted. The Bowen/Edwards court held that a local regulation is preempted where an operational conflict exists between the local regulation and a state regulation. By way of example, the Court held that an operational conflict will exist where local safety regulations or land restoration s Bowen/Edwards v. Board of County Commissioners, supra, at 1058. 6 See Oborne v. Board of County Commissioners, supra, and Bowen/Edwards v. Board of County Commissioners, at 1060, fn 7. 1-A:\COMNTSME 10 940339 requirements are contrary to state laws and regulations.' An operational conflict will always exist where the state has adopted a regulation on a matter within its jurisdiction and the local jurisdiction adopts regulations that are more stringent or go further than the state regulation since the local regulation will frustrate the state purpose to maximize development and production of oil and gas. Specific provisions in the proposed regulations which are more stringent than state regulations and, therefore, preempted, include, without limitation, the following: • Financial assurance requirements in Sections 110.6, 120.1 and 120.2, 126 and 130; • Reclamation and site restoration requirements in Sections 110.7, 110.9A., 120.7, et seq., and 126; • Waste disposal and management requirements in Sections 110.13, 122 et sec ., 127 and 128; • Section 120.6.1 with respect to backfill of pipelines; • Section 120.6.3 with respect to signage; • Section 120.3 et sec . with respect to setbacks; • Section 120.4 with respect to fencing; • Sections 120.7.1.3 - 120.7.1.5 and 120.7.2 with respect to continuing obligations for restoration and surface owner approval; • Section 120.9 with respect to surface damages agreements; • Section 120.10 with respect to soil sampling and testing water wells; and • Section 120.11 with respect to spills and spill reporting. 4. Local Regulations That are Identical to State Regulations or That Require Compliance With a State Regulation are Preempted. Local regulations that are identical to state statutes or regulations or that require compliance with state regulations are preempted. Such provisions are preempted because they may be applied or interpreted by the local entity in a way which would be inconsistent with the ' Bowen/Edwards v. Board of County Commissioners, supra, at 1060. 1-A\COMNTSME 11 940339 manner in which the state would enforce or interpret the regulation and because the COGCC has exclusive authority to regulate with respect to matters covered by the Act.8 Specific provisions in the proposed County regulations which are identical to or adopt a state regulation include, without limitation, the following: • Definitions of Production Pit, Reserve Pit, Special Purpose Pit, Subsurface Disposal Facility and Waters of the State; • Section 120.5 with respect to soil removal and segregation; (COGCC Rule 1003) • Section 120.15 with respect to noise abatement (COGCC Rule 803); • Section 120.16 with respect to signage (COGCC Rule 210); • Section 120.18.3 with respect to water quality (COGCC Rule 124, 125, 209, 322A and 324); and • Section 122.3 with respect to pit liners (COGCC Rule 904.b.2.a.). 5. The Proposed Regulations Reference an Incorrect Standard to Apply to Determine Whether There is a Conflict Between a State Regulation and a County Regulation. The standard for preemption set forth in the proposed regulations in Sections 6.4 and 125 that the operational conflict between the County regulation and the Colorado Oil and Gas Conservation Act or a COGCC regulation must be one that materially impedes or destroys the interest of the state in the development and production of oil and gas resources is not a correct statement of applicable case law. The language that the proposed regulations cite is from the Bowen/Edwards case and a reference in that case to the standard discussed in National Advertising Company v. Department of Highways of Colorado, 751 P.2d 632 (Colo. 1988). The reference in Bowen/Edwards to the standard in the National Advertising Company case, however, is to one example of when an operational conflict exists between a state regulation and a local regulation and not to the standard that courts always apply in cases in which preemption is alleged. The preemption standard that courts often apply is discussed in the case Lakewood Pawnbrokers v. City of Lakewood, 517 P.2d 834, at 836 (Colo. 1974), which holds: The test for determining whether such a conflict exists is whether the ordinance in question either licenses or permits that which the a See Oborne v. Board of County Commissioners, supra. I-A\COMNTSME 12 34U3z13 statute prohibits or whether it proscribes, burdens or limits that which the statute authorized. The Colorado Oil and Gas Conservation Act is a comprehensive regulatory system pursuant to which permits are issued to drill wells in accordance with rules and regulations prescribed by the COGCC. The statutory scheme and the regulations promulgated thereunder are directed to regulating oil and gas operations and to issuing permits for oil and gas facilities. Accordingly, under the test set forth in the Lakewood Pawnbrokers case, local entities cannot impose additional or more stringent standards on the same subjects regulated by the state. 6. Local Regulation of Subiects That are Regulated by the COGCC may be Preempted by Other State and Federal Laws and Regulations. Proposed regulations with respect to wetlands, wildlife habitats and archeological resources, among others, may be preempted by the regulations of the State Division of Wildlife and the State Historical Society as well as federal agencies with jurisdiction over the subject matter. See Sections 110.2.5 and 120.17. 7. Local Regulations that Attempt to Reverse or Impair the Vested Property or Contractual Rights of a Mineral Interest Owner are Beyond the Statutory Authority of the County and are Unconstitutional. Colorado case law is clear that the mineral owner owns the dominant estate and has the right of reasonable access to and use of the surface to extract minerals.' Regulations that purport to reverse this basic tenet of Colorado law and thereby deprive the mineral interest owner of its vested property and contractual rights may be violative of federal and state constitutional provisions. For example, the Montana Supreme Court in the case Western Energy Company v. Genie Land Company,10 struck down a Montana statute that provided that an applicant for a permit to conduct strip mining operations was required to include in his permit application a written consent or waiver from the owner of the surface estate in cases in which the surface owner did not own the mineral estate. The Court found that the statute was unconstitutional both as a taking under the Fifth Amendment to the United States Constitution and as an impairment of a contract in contravention of Article I, Section 10 of the United States Constitution." 9 See Frankfort Oil Company v. Abrams, 413 P.2d 190 (Colo. 1966). 10 737 P.2d 478 (1987). See also Miller Brothers v. State of Michigan, 1994 WL 56509 (Mich. App.) decided February 22, 1994. 1-A\COMNTSME 13 • 940339 Specific provisions which may elevate the rights of the surface owner to a preeminent status (absent contractual agreement)compared to the rights of the mineral interest owner include the following: • Section 120.2 with respect to naming the surface owner as an additional insured; • Sections 120.7.1.3, 120.7.1.4 and 120.7.1.5 with respect to continuing obligations concerning pits and backfilling, compaction alleviation and seed bed preparation; • Section 120.7.2 with respect to surface owner approval regarding removal of equipment; • Section 120.9 with respect to the scope of surface damages agreements; • Section 120.10 with respect to soil and groundwater samples; • Section 122.2.3 with respect to size of reserve pits. 8. Regulations That Deprive an Owner of Property of his Investment-backed Expectations May Constitute a Taking by the County Within the Meaning of the Fifth Amendment of the United States Constitution. Courts have awarded compensation to energy and mining companies based upon claims by the companies that their mineral properties had been taken by the government without prior compensation because of government regulations which disallowed the development by the companies of their mineral rights.' To determine whether a taking has occurred, Courts consider the economic impact of the regulation and the extent to which the regulation has interfered with the party's "investment-backed expectations".13 The proposed regulations clearly will have a severe economic impact on oil and gas companies. (See Economic Study, Part 2). Also, it is obvious that the companies purchased mineral rights and leases for the sole purpose to develop the oil and gas resources. The 12 See, for example, Whitney Benefits, Inc. v. United States, 18 Cl. Ct. 394 (19890), corrected, 20 Cl. Ct. (1990), aff'd., 926 F.2d 1169 (Fed. Cir), cert. denied, 112 S. Ct. 406 (1991); Florida Rock Industries v. United States, 21 Cl. Ct. 161 (1990); United Nuclear Corporation v. United States, 17 Cl. Ct. 769 aff'd., 912 F.2d 1432 (1990); Western Energy Company v. Genie Land Company, 737 P.2d 478 (1987). 3 See Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 106 S. Ct. 1018, 89 L. Ed. 2d 166 (1986) cited in United Nuclear Corporation v. United States, supra at 1435. t-A:\COMNTSME 14 94C339 companies believe that the proposed regulations will be so burdensome and costly that they will seriously interfere with their ability to develop their mineral interests.t4 Note also that the Colorado Senate recently passed Senate Bill 94 entitled "A Bill for an Act Concerning the Protection of Private Property from Taking by Actions of State Agencies." The Bill is specifically addressed to only state agencies; however, we believe that it expresses the position that the State could take with respect to local entities such as counties which are entirely creatures of statute and which may be considered as agencies of the State. The Bill articulates the policy that private property cannot be either taken or damaged by government action without compensation being made to the property owner. Warnings are included in the Bill that 1) agency actions that affect the value or use of property may constitute a taking; 2) an action that results in less than a complete deprivation of the use or value of the property may amount to a taking; and 3) the mere assertion by an agency that an action is for a public health and safety purpose may be insufficient grounds to avoid a claim that an action is a taking. The language in the Bill is directly relevant to how the proposed regulations will impact the mineral property rights owned by oil and gas operators. 9. Certain of the Regulations may be Unconstitutionally Vague and a Denial of Due Process Because they do not Provide Adequate Notice to Operators of Standards that the County will Apply, or They Violate Rights of Equal Protection or of Due Process Because of Their Retroactive Effect. a. Vagueness The proposed regulations in many cases do not provide appropriate guidance to operators of what the County requires or establish clear criteria according to which County representatives are to make decisions. For example, an operator cannot determine from the regulations the scope of the vicinity map it is required to submit or the standards for certain other submissions referenced in Sections 110.1 et se_c . (vicinity map), 110.2.5 ("significant plant ecosystems" and "geologic features"), and 110.2.6 ("proposed topography"). Similarly, no criteria are provided in the regulations by which the Planning Department is to make a determination to impose additional mitigation measures with respect to visual impact and with respect to other reasonable conditions for approval of a site application. See Sections 110.2.7, 110.11, 110.12, 120.18.2, and 126. b. Equal Protection Violations Certain of the proposed regulations may violate constitutional standards of equal protection to the extent that they apply only to oil and gas operations and not to other similarly situated industries and uses. For example, Section 110.8 requires an operator to reimburse emergency response providers for costs incurred by them to respond to emergencies from oil and gas operations, and Section 120.10 requires that operators test groundwater and take soil samples. Section 126.2 specifically provides that approval of site 14 See Part 5, constitutional issues outline prepared by Professor Jan Laitos. 1-A:\COMNTSME 15 940339 plans for oil and gas operations does not result in the vesting of rights, and Section 125 shifts the burden of proof to the operator in case of conflicts between county and state regulations. Section 110.10 requires noise, odor and dust abatement plans. c. Due Process Violations Certain of the proposed regulations may violate constitutional standards of due process. For example, Section 125 shifts the burden of proof to the operator, Section 126 does not include a mechanism by which an operator can appeal an adverse decision from the Planning Department and Section 129 allows for inspections by County officials without prior notice to the operator. d. Retroactivity Section 131 has the effect of allowing the regulations to be retroactively applied to existing oil and gas facilities. A general rule of law is that a zoning ordinance that applies retroactively to abrogate valid existing uses and thereby impairs vested property rights will not be upheld.15 10. The Regulations do not Distinguish Between Urbanized and Nonurbanized Areas For Certain Purposes. The proposed regulations do not distinguish between areas which are urbanized on the one hand and those which are rural or developing on the other so that appropriate standards with respect to at least setbacks and noise and visual impact mitigation can be applied. We also believe that, although a special use permit process may be appropriate in urban areas such as Broomfield and Thornton, a special use permit process, whether it is administrative or adjudicative, is not viable in Weld County where numerous permits must be processed. 11. Members of the Industry Estimate that it Will Take a Minimum of Three Months for the County to Process a Special Use Permit Application. The proposed regulations require the submission by the operator of vicinity maps and various plans, including an operation plan, an emergency response plan, a reclamation and restoration plan, a noise, odor and dust abatement plan, a visual impact mitigation plan, an access and transportation plan, a waste disposal plan, a drainage and erosion control plan, an undesirable plant management plan, as well as the possibility of financial assurance and insurance information. Approvals are required from at least Planning Services, the County Engineer and the health department, and building permits may be required. Beyond initial review and approval by Planning Services, the department can require an operator to comply with other conditions for which the regulations provide no standards and no appeals process. We estimate that the special permit review process will take at least three months. We believe is See, for example, City and County of Denver v. Denver Buick, Inc., 141 Cob. 121, 347 P.2d 919 (1960); 83 Am. Jur. 2d Zoning § 624. Note also that Article II, Section 11, of the Colorado Constitution specifically provides that the general assembly shall not pass laws that are "retrospective" in their operation. t-A:\COMNTSME 16 940,339 that costs to the companies to comply with the permit procedures could be confiscatory and may amount to a taking within the meaning of the Fifth Amendment. 1-AICOMNTSME 17 340339 SPECIFIC COMMENTS 1. Definitions: E and P Waste Site: a. The definition implies that the County has authority to regulate sites and facilities where E and P wastes are stored, created or disposed of; however, the regulation of these sites and facilities is within the jurisdiction of the state and federal governments, including the exemptions granted under the Resource Conservation and Recovery Act. b. The County is preempted from regulating in the area both because the COGCC has adopted comprehensive regulations for E and P wastes in the 900 series and the matter is technical and therefore within the sole jurisdiction of the COGCC. Further, the County is clearly preempted from imposing more stringent regulations than the COGCC. See General Comments, paragraphs 2 and 3. c. Definitions for "well site" and "production site" similar to the ones in the Thornton and Broomfield Ordinances should be included to clarify provisions in other sections of the Regulations. See Thornton Ordinance 58-1.105 and Broomfield Ordinance 17.54.020. Exploration and Production Waste: The definition does not track with the COGCC definition in Rule 126. The state definition includes the clause "but does not include water-based bentonitic drilling fluids" at the end. The difference between the County definition and Rule 126 is significant. The state definition reflects that the COGCC made a conscious determination that bentonitic drilling fluids were not to be regulated as exploration and production wastes and the decision is one that is a matter within the technical expertise of the COGCC. The County is preempted from regulating with respect to E and P wastes both because the matter is technical and because the State has regulated in the area. See General Comments, paragraphs 2 and 3. Injection Well: The reference is to the Code of Federal Regulations and reflects that the County is preempted by federal law from regulating in the area. Oil and Gas Operations: The term "oil and gas operations is broadly defined so that it applies to a variety of activities at a single well and to various operations with respect to equipment at the well. See Specific Comments, Section 105. Oil and Gas Support Services: a. Part 6 references "production waste;" however, the proposed regulations do not include a definition of the term. COGCC Rule 131 covers a "subsurface disposal facility" so that the County is preempted from acting in the area. See General Comments, paragraphs 2 and 3. 1-A:\COMNTSME 18 940339 . b. The definition is ambiguous in terms of what is meant by the term "source" and whether it refers to a formation underground or an above-ground storage facility. c. The proposed regulations do not include any references to "Oil and Gas Support Services." The reference to "source" in .6 is ambiguous. Pit: The definition is identical to COGCC Rule 127. See General Comments, paragraph 4 with respect to preemption. The definition is not clear as to whether it applies to lined earthen pits. Pollution: The definition is identical to COGCC Rule 124. In any event, the County is preempted from acting in the area of pollution prevention both because the matter is a technical one within the exclusive jurisdiction of the COGCC and because the COGCC has acted with respect to the matter. See General Comments, paragraphs 2, 3 and 4. The reference to creating a nuisance implies a legal standard and can be subjectively applied. Production Pit: The definition is identical to COGCC Rule 129. See General Comments, paragraph 4 with respect to preemption. Reserve Pits: The definition is identical to COGCC Rule 128. See General Comments, paragraph 4 with respect to preemption. Screened/Screening: The purpose of screening is generally only for aesthetic impact mitigation. Special Purpose Pits: The definition is identical to COGCC Rule 130. See General Comments, paragraph 4 with respect to preemption. Subsurface Disposal Facility: The definition is identical to COGCC Rule 131. See General Comments, paragraph 4 with respect to preemption. Surface Owner: The definition is identical to the way the term is defined in Senate Bill 177. The reference to "affected tract of land" is ambiguous. The definition should include only the surface owner upon whose property oil and gas operations actually take place. Otherwise, contractual rights of the mineral interest owner are impaired. See General Comments, paragraph 7. Transmission Pipeline: There may be federal and state preemption issues with respect to the manner in which the County deals with pipelines. For example, transmission lines are in part regulated under 49 C.F.R. and various Departments of Transportation programs. See General Comments, paragraph 6. Waters of the State: The definition is identical to COGCC Rule 125. See General Comments, paragraph 4 with respect to preemption. 1-A:\COMNTSME 19 940339 2. New Subsection 4.2.9: The term "bad-use" is probably a typographical error and should be a reference to "land-use." The County has no authority to favor the surface development of property over the interests of the mineral owner and the development of the mineral estate. See General Comments, paragraph 7. 3. New Section 6.4: a. The standard that the operational conflict between a County regulation and the Colorado Oil and Gas Conservation Act (the "Act") must be one that "materially impedes or destroys the State's interest" is not a correct statement of applicable case law. See General Comments, paragraph 5. The last part of the second sentence beginning with "if necessary . . ." should be deleted in that it adds a gloss that is not included in the Supreme Court decisions. b. The County should delete provisions in the regulations that are clearly preempted by State law or regulation instead of relying on the savings clause in the proposed regulations as the way to resolve conflicts between State and County regulations. Otherwise, the County sets itself up for later protracted and expensive administrative proceedings. c. The word "conductive" in line 6 should probably be "correlative." 4. Section 105: Section 105 of the proposed regulations requires a special use permit for oil and gas operations. The term "oil and gas operations" is broadly defined so that a permit would be required for not only drilling a new well, but also each time an operator wishes to deepen a well, rework it or recomplete it. A separate special use permit would also be required to abandon a well whether or not the well has been the subject of any other special use permit. The definition covers all of those matters which Senate Bill 177 delegates to the COGCC. a. We strongly believe that a special use permitting process is not an appropriate way for the County to regulate oil and gas activity in the area especially in light of the amount of oil and gas activity in the County. The County should defer to the COGCC permitting process except with respect to limited land use matters such as noise and visual impact mitigation. The County has no authority to deny a permit for a well which is approved by the COGCC and which complies with objective County land use standards. 1-A:\COMNTSME 20 940339 c. The special use permit provision applies retroactively to existing wells to the extent that the well is to be redrilled or reentered and as such impairs vested property rights. See General Comments, paragraph 7. d. The provisions do not include a time period in which applications are to be reviewed by the Planning Department or any procedure by which to appeal the decision of the Planning Department. See General Comments, paragraph 9. e. The County has no authority to deny a permit where an operator wishes to drill in a legal location approved by the COGCC since to do so would frustrate the State purpose to avoid waste of natural resources. For this reason, the cities of Broomfield and Thornton chose to adopt ordinances where the City was required to grant a permit where the operator fulfilled non-discretionary requirements in the ordinances. f. The land use authority of the County extends to the initial installation of the well and the impact of the installation with respect to matters such as noise, aesthetics and wildlife as well as public access to the well site. Subsequent operations at the site are comprehensively regulated by the COGCC so that the County may be preempted from regulating with respect to such matters as reworking, recompleting or abandoning the well. g. Read literally, the provision requires that a special use permit is to be obtained each time an operator changes out equipment or maintains or replaces equipment. In this regard, Thornton took the approach that its ordinance would not apply to accessory equipment and pumping systems at existing sites and that any repair or replacement of such equipment had to conform to performance requirements in the ordinance. See Thornton Ordinance 58-10.102. h. The initial special use permit that the County issues should include approval for all equipment as well as the maintenance, repair and replacement of the equipment, provided that equipment that is replaced conforms to applicable requirements in the County regulations. The current regulatory scheme for a use by special review permit requires the operator to receive certification from County Planning Services that modifications do not deviate materially from the permit that had been approved. i. The definition requires that flowlines and gathering systems must be connected, functional and in operation. The definition is similar to the definition of oil and gas operations which has been included in Senate Bill 177. This means that if the Senate Bill is passed, the State, through the COGCC, will have exercised its authority in this broad area and the County will be preempted from acting. See General Comments, paragraph 3. 5. Section 110: The reference to a "non-commercial well" is ambiguous. 110.1: It is not clear whether the vicinity map is to include information only within the section, township and range or whether public roads and municipal boundaries for some larger t-A:\COMNTSME 21 940339 area is required. A vicinity map could be required only for the drillsite and an area within 1,000 feet of the drillsite as is required in the Thornton Ordinance, Section 58-10.201. 110.2: The drawing should be able to be at any scale not less than 1 inch equal to 100 feet. 110.2.1: The proposed regulations do not include a definition of drillsite or production site so that the areal extent of the information that the County requires is not clear in several provisions in Section 110. It is also not clear whether the term "site" applies only to the drillsite or to a site that includes the access road and the drillsite. 110.2.2 and 110.2.3: Note that the location of facilities described in subsection 110.2.2 and of proposed roads in subsection 110.2.3 may not be known or are subject to change from that which the operator designates at the time it submits its application so that some flexibility must be included in the process. The facilities referenced should be required to be depicted only to the extent that the operator plans to install them at the drillsite. 110.2.3 and 110.2.4: The operator should only be required to depict easements and rights of way that are of record on the vicinity map. See also Specific Comment, Section 110.2.1. 110.2.5: Subsection 110.2.5 is not clear with respect to what is intended by "significant plant ecosystems" and "geologic features," among other things. Wetlands are subject to federal jurisdiction and wildlife habitats are within the jurisdiction of the State Division of Wildlife. Archaeologic resources are also regulated by the State Historical Society. A topographical map should be sufficient with respect to "geologic features." Certain of the requirements in the subsection should only apply to those cases where there is some indication that the circumstances may exist at the site, for example, unusual plant ecosystems, wildlife habitats and migration routes and wetlands or aquatic habitats. See General Comments, paragraphs 6 and 9. 110.2.6: Subsection 110.2.6 is not clear with respect to the term "proposed topography." A U.S.G.S. topographical map should be sufficient with respect to existing topography or, in the alternative, the intervals should be at least at 20 foot intervals. Otherwise, operators would be required to survey each site to meet the requirement. 110.2.7: Subsection 110.2.7 provides no guidance to the operator as to the circumstances and the extent to which the operator is required to provide information with respect to matters such as buffering, berming, fencing or screening in that no criteria are included in the regulations for the application of such mitigation measures. See General Comments, paragraph 9. The result is that the provision may be invalid on its face or as applied. Note also that the vagueness of the regulation could cause substantial delay in the process to obtain a permit from the County. Also noise abatement plans and dust abatement plans should not be required in all instances and the regulations should include standards for when such plans will be required. I-A:\COMNTSME 22 940339 110.4: a. Because of the time it will take to obtain a special use permit, other applicable state and County permits may expire. b. Generally, moving permits are not obtained until within 48 hours of the time that the rig is to be moved. 110.5: a. Mineral lease agreements are generally available in public records. To the extent that such documents are not recorded, a question of the enforced disclosure of unrecorded, confidential documents is raised. b. The COGCC requires in Rule 340 b. and in the Wattenberg Rules either a surface damages agreement or the posting of a bond by the operator so that a surface agreement may not apply in all cases. Further, the COGCC permit is evidence that the operator has notified the surface owner. c. The section is not clear as to what the County will accept as "evidence." 110.6: The County has no authority to impose separate financial assurance requirements on oil and gas operators. See General Comments, paragraph 3 and cases including Bowen/Edwards, supra, and Oborne, supra. Both Thornton and Broomfield included financial assurance requirements in the ordinances that they originally considered adopting; however, both cities deleted such requirements after objection by oil and gas companies. Further, the only conditions for approval that the County can impose are those related to land use issues such as noise and visual impact mitigation. Such mitigation measures will be implemented immediately after production is established so that no financial assurance would thereafter be necessary. See also Specific Comments, Sections 120.1 and 120.2. 110.7: The operation plan that is contemplated in Section 110.7 relates to the life of the well and not the day-to-day operations at the drill site. The operator cannot predict at the time of drilling what its operation plan will be with respect to well abandonment and reclamation at the specific site since well abandonment might not take place for twenty years or more. In any event, the County is preempted from imposing regulations with respect to plugging and abandonment and reclamation because such matters are technical in nature, and they are covered in COGCC regulations. See General Comments, paragraphs 2 and 3, and COGCC Rule 1004. 110.8: a. It is not clear why the Weld County Health Department must review and approve an emergency response plan. Further, a proviso should be included that neither the 1-A:\COMNTSME 23 940339 County Sheriff nor the Health Department may be unreasonable in their review and acceptance of an emergency response plan. b. Operators provide the information requested in the Section under SARA III (community right to know) to designated agencies of the state and County so that much of what the County requires is covered by other state and federal programs. c. The paragraph provides that the operator must reimburse the appropriate emergency service provider for costs incurred in connection with emergency responses. First, the provision may violate equal protection if the County does not apply a similar requirement to the operations of other industries. Next, the requirement imposes strict liability on oil and gas operators whether or not an emergency existed, whether the emergency was precipitated by a mistake of the County or third parties or whether the event that created the emergency was or was not caused by the acts or omissions of the operator. The operator should be required to reimburse the emergency response provider only in cases in which he is negligent. 110.9A: Reclamation requirements are preempted because the COGCC has existing regulations on the subject. See General Comments, paragraph 2 and cases including Bowen/Edwards, supra, and Oborne, supra. Further, any reclamation plan that an operator would submit to the County at the time that it submits a site application plan could not be site specific because conditions at the site change over the time that the well is being produced. Note that Thornton and Broomfield deleted requirements with respect to reclamation from their proposed ordinances after objection by the oil companies. 110.10: The provisions presume that noise, odor and dust abatement plans are required in all cases and fail to distinguish between operations in urbanized areas compared to rural areas. See General Comments, paragraph 10. 110.11: No standards are included in the proposed regulations as to when visual impact mitigation will be necessary. See General Comments, paragraph 9. Note also that wetlands are covered by federal and state regulations. 110.12: The provision is ambiguous as written. It appears that the County intends for operators to make special access arrangements when weather conditions are adverse; however, no standards are included. The provision may also violate equal protection standards to the extent that similar provisions do not apply to other businesses. See General Comments, paragraph 9. 110.13: The requirement for a waste disposal plan is preempted by COGCC regulations which address issues of waste disposal. See General Comments, paragraphs 2 and 3 and COGCC Rules, 900 series. 110.14: It is not clear what the County has in mind when it requires a drainage and erosion control plan. 1-A:\COMNTSME 24 940339 110.16: The requirement that operators submit proof that they have paid taxes raises questions of equal protection and whether other similarly situated industries are required to make the same submission. Further, the County should have ready access to the information internally among its departments. See General Comments, paragraph 9. 110.17: a. Any such required notices may not be available at the time that the application is filed and would need to be provided as a part of the process. b. The County permitting process may easily take a period of time such that the COGCC permit expires at the end of 120 days and any notice to the surface owner required by COGCC Rule 1002 becomes untimely. 110.18: Any application fees must be reasonably related to the costs of administering the regulations.16 6. Section 120: Performance Standards 120.1: Financial Guarantees a. COGCC Rules 304 a. and b. require separate bonds for plugging and, in some cases, reclamation. The County would impose additional security to guarantee performance "in compliance with the conditions of approval." Bonding requirements are a technical matter as to which all local regulation is preempted. Local bonding requirements also create an operational conflict with COGCC regulations because they frustrate the state purpose to maximize the development of oil and gas resources by having companies allocate their resources to financial assurance requirements instead of oil and gas development. See General Comments, paragraphs 2 and 3. Requirements with respect to posting security directly and substantially impact the ability to explore for and develop oil and gas reserves. b. The COGCC is currently considering comprehensive new regulations on bonding for plugging and abandonment and restoration and reclamation that are scheduled to be considered at a May hearing. The regulations will amend COGCC Rules 304„ 305, 317 and 504. c. It is not clear whether the financial assurance requirement is to be waived on a well by well basis or on a company basis. Senate Bill 177 will allow an operator to 16 See, for example, Heckendorf v. Town of Littleton, 286 P.2d 615 (Colo. 1955); Moffitt v. City of Pueblo, 133 P. 754 (Colo. 1913). 1-A:\COMNTSME 25 940339 provide financial assurance other than by individual bonds and provides for bonding for reclamation and to secure the obligation to protect the health, safety and welfare of the public. d. The $500,000 bond, even if obtainable, is arbitrary and excessive in amount and may have the effect of putting some companies out of business especially when compounded with bonds that may be required in other local jurisdictions in excess of those bonds required by the COGCC. 120.2: Insurance a. The County requires both insurance and financial guarantees. The requirements go beyond what the State requires even under Senate Bill 177. The insurance required can probably not be obtained by most companies because there can be no exclusion for environmental damage. In any event, insurance for environmental damage is not necessary if bonding is sufficient. b. The requirement that the surface owner be named as an additional insured is way beyond the statutory authority of the County in that it is an attempt to regulate the respective rights of the surface and mineral interest owners, may amount to a Fifth Amendment taking and serves no public purpose. See General Comments, paragraph 8. c. Note that the Cities of Thornton and Broomfield eliminated financial assurance requirements from their ordinances after objection by the oil companies. Apparently the Cities were persuaded that they were preempted from regulating in the area. 120.3.1 and 120.3.2: Setbacks a. The provision assumes that all property in the County is included in a high density area as defined by the COGCC so that for those portions of the County which do not qualify as a high density area, the proposed regulation is more stringent than the COGCC regulations and, to that extent, is preempted. The proper procedure for the County as specified by COGCC rules is to apply to the COGCC pursuant to Rule 603 to have specific areas of the County designated as high density. b. The COGCC has a procedure for an operator to obtain a variance from the high density 350 foot setback; however, the COGCC has no procedure pursuant to which an operator can apply for a variance in a case in which the operator is not required by the COGCC in the first instance to comply with a 350 foot setback. c. There are no standards by which the Planning Department is to decide to impose additional mitigation measures where County setback requirements are not met. Note also that the County purports to require additional measures to overcome the effect of conduct that is permitted and affirmatively allowed by the COGCC. 1-Ar\COMNTSME 26 940339 d. COGCC Rule 604.a.(2)requires tanks to be setback at least 2/3 of the tank diameter from the nearest public way or easement; the County requires a setback of 350 feet. The proposed regulation is preempted by the less stringent COGCC regulation. In addition, the proposed County setback may not comply with the wishes of the surface owner. e. The Zoning Code should include a requirement that developers who wish to develop near existing oil and gas facilities be required to provide whatever impact mitigation the County believes is necessary. See Thornton Ordinance 58-6.201 and 202. 120.4: Fencing a. The provision is similar to COGCC Rule 1003 in the Wattenberg rules. To the extent that the provision is identical to the COGCC rule and applies to the portions Weld County in the Wattenberg area, it is preempted, and to the extent that it applies to portions of Weld County that are not in the Wattenberg areas, it is clearly preempted because it must be assumed that the COGCC considered the areal extent to which the rule should apply. See General Comments, paragraphs 3 and 4. b. COGCC Rule 1003 requires fencing to prevent livestock from entering the drillsite. The provisions may be a denial of equal protection in that it requires operators to incur expenses to keep livestock out and does not impose similar burdens on ranchers. While the industry wishes to conduct safe operations, no other industry is required to take precautions to prevent people from committing acts of trespass, for example. 120.5: Soil Removal and Segregation The provisions are identical to COGCC Rule 1003. See General Comments, paragraph 4 with respect to preemption. 120.6.1: The provision is similar to COGCC Rule 1004c.(2)except that it a) applies to pipelines and gathering systems as well as flow lines; b) requires the more stringent standard that "every effort" be made in running pipelines instead of just "efforts"; and c) does not allow for a waiver of the requirement in writing by the surface owner. The County is preempted from adopting a more stringent standard than the COGCC. See General Comments, paragraph 3. 120.6.2: a. The recording provision may not be feasible, especially with respect to flowlines. COGCC Rule 1002g. requires an operator to consult with a surface owner with respect to the location of pipelines and other equipment so that the provision is preempted to the extent it applies to the Wattenberg area and is intended to provide notice to a surface owner. 120.6.3: The requirement that pipelines be marked with signs is beyond what the COGCC requires in Rule 210. In that it can be presumed that the COGCC considered whether to require signs for pipelines, the provision is preempted. See General Comments, paragraph 3. I-A:\COMNTSME 27 940339 120.7: Reclamation and Restoration Plan Reclamation requirements are preempted because the COGCC has existing regulations on the subject and because they are considered technical in nature. COGCC Rules 315 p., q., r., and s. and 1004 and portions of the 900 series are comprehensive with respect to site restoration and reclamation. See General Comments, paragraphs 2 and 3 and cases including Bowen/Edwards supra, and Oborne, supra, and Specific Comments, Section 110.9A. 120.7.1: Detailed Plan a. The COGCC is directed in the Act at C.R.S. § 34-50-125, as amended, to consider environmental impacts on wells, subsurface soils, surface soils, groundwater, surface waters or surface vegetation and provision is made for the monitoring and testing of those media. A more stringent County regulation on the same subject is preempted. See General Comments, paragraph 3. b. The County requires that the operator submit evidence that the COGCC has given approval; however, it is not clear what it is that the COGCC is to approve. The COGCC has no procedure to formally approve in advance either the results of tests or a reclamation plan, and the County has no authority to require the COGCC to act in this regard. See General Comments, paragraphs 2 and 3. Further, the County has no authority to approve or disapprove plans for surface restoration which comply with COGCC Rules 315 q. and r. c. It is not clear what types of soil and groundwater tests are to be performed, what is to be done with the results of the tests or to what extent corrective action is required. Further, operators may be denied equal protection to the extent that such requirements do not apply to other property owners such as farmers. Finally, the requirement that an operator reclaim "all affected land" is ambiguous, contrary to case law with respect to the property rights of the mineral interest owner and beyond anything required by the COGCC. See General Comments, paragraphs 2, 3 and 7. 120.7.1.1: Timing and Notice The provision is substantially similar to COGCC Rule 1004 except that the County purports to have authority to grant extensions to the operator to reclaim the surface following drilling and to require consultation with the surface owner concerning certain matters. The provision is preempted to the extent that the County asserts authority to approve or disapprove what the COGCC has allowed and to the extent to which it applies to portions of Weld County not covered by the Wattenberg Rules. See General Comments, paragraphs 2, 3 and 7. 120.7.1.2 through 120.7.1.5: The provisions are substantially similar to COGCC Rule 1004 and specific rules in the 900 series except that the County imposes a continuing obligation on the operator for three years with respect to compact alleviation and one year with respect to both pit/backfilling and seed bed preparation. 1-A:\COMNTSME 28 940339 The provisions are preempted because the regulations impose obligations on an operator beyond the COGCC rules on the same subject and as to the portions of Weld County that are not in the Wattenberg area. Further, the provisions which impose continuing obligations on operators may impair vested property and contractual rights of the mineral interest owner. See General Comments, paragraphs 2, 3 and 7. 120.7.1.5: The County has no authority to require the COGCC to make inspections with respect to seedbed reclamation. 120.7.2. and 120.7.2.2: a. COGCC Rule 315 q. imposes requirements on operators with respect to final site restoration and reclamation. The proposed regulation imposes more stringent requirements on the operator as to 1) the depth to which structures and casings are to be removed and 2) surface owner approval to remove equipment. The regulations are preempted because they are more stringent than COGCC regulations and relate to technical matters. b. To the extent that surface owner approval is required, the regulation impairs vested property and contractual rights of the mineral interest owner since lease agreements generally do not require surface owner approval. See General Comments, paragraphs 2, 3 and 7. c. The provision requires operators to remove buried pipeline unless the surface owner recommends that they remain buried. Note, however, that most pipeline agreements do not provide for pipelines to be removed so that the provision may have the effect of interfering with valid existing contractual rights. Also, pipelines are not always owned by the operator. See General Comments, paragraph 7. d. The reference to "completion" in Section 120.7.2.2 should probably be to plugging and abandonment. It is not clear what the operator is required to remove, for example, both the production casing and the surface casing. Removal of the casings may be unsafe and contrary to COGCC rules. e. The provision includes plugging and abandonment requirements which are preempted by extensive COGCC rules on the subject and because the matter is technical. 120.8: Waste Handling The transportation of wastes is covered in COGCC Rule 910 so that the proposed regulation is preempted. The COGCC has extensive rules in the 900 series covering wastes and waste management. See General Comments, paragraphs 2 and 3. 120.9: Surface Damages Agreement COGCC Rule 1002g. comprehensively covers procedures for notification to and consultation with surface owners. The state rule provides that the operator is required to give notice to the surface owner at least 30 days prior to the commencement of operations. The proposed regulation requires notification to the surface owner 1-A:\COMNTSME 29 940339 60 days in advance and consultation with him with respect to surface damages, reclamation and restoration and dispute resolution, among other things. The proposed regulation is preempted in that it goes further than the COGCC rule covering the same subject. Further, the regulation may impair vested and contractual property rights of the mineral interest owner. See General Comments, paragraphs 3 and 7. The proposed regulation also assumes that all property in the County is subject to the Wattenberg Special Field Rules. To the extent that portions of the County are not subject to the Wattenberg rules, the County is preempted from requiring notification to surface owners in that the County requirement would create an operational conflict with the state regulation. See General Comments, paragraph 3 and cases including Bowen/Edwards, supra. To the extent that portions of the County are subject to the Wattenberg rules, the County is preempted from regulating issues related to surface damages and surface owner notification because state regulations exist on the same subject. See General Comments, paragraph 3. The proposed regulation assumes that the surface owner and the operator will enter into a surface damages agreement; however, both the Wattenberg rules with respect to certain areas of Weld County and COGCC Rule 304b. with respect to the remaining areas in Weld County which are not subject to the Wattenberg rules provide that the operator may post a bond in the event that it cannot reach an agreement with the surface owner. Finally, the time at which the provision applies is not clear and whether it applies only at the time the well is initially drilled. There are conflicts within the regulations with respect to surface owner notification because of the time it may take to process a County permit application. 120.10: Testing a. The provision requires that the operator obtain soil samples and groundwater samples from water wells at six month intervals until an oil and gas well is plugged and abandoned and that TPH tests be run. The COGCC has the authority under the Act to monitor and test various media and the environmental impact of oil and gas operations. See C.R.S. § 34-50-125. A proposed regulation that covers the same matter is therefore preempted. b. To the extent that state and federal statutes require testing and site remediation, the County is preempted. c. We understand that there are over 50,000 water wells in the Denver Groundwater Basin. We know of no documented instances of cases where petroleum hydrocarbons from oil and gas wells have migrated into water wells. d. The provision may violate equal protection if it does not apply to other similarly situated businesses which also own property rights such as fanners. Further, the provision includes no standards to determine the proximity of wells to which it applies or the type of tests to be conducted. See General Comments, paragraph 9. 1-A:\COMNTSME 30 911`0'339 e. The provision includes no causation requirement that contamination be found to be linked to oil and gas activities. 120.11: Spills and Spill Reporting a. Federal law and COGCC Rule 908 cover the subject of spills and spill reporting. The proposed regulation and the COGCC rule are identical except that the County requires reporting to both the COGCC and the County Health Department. To the extent that the County interprets an identical regulation differently from the COGCC and to the extent remediation is required, the County regulation is preempted. See General Comments, paragraph 4. b. The reporting and remediation requirements should start to run from the time that the spill is discovered. c. Section 120.11.1 is more stringent than the COGCC requirement which provides that spills are to be reported within 24 hours. 120.12: Weed Control a. The requirement that the operator maintain the premises in a weed free condition goes beyond anything required by the COGCC and is preempted. Also, the County does not distinguish between a variety of rural terrains and surface uses of the property upon which a well is drilled or whether the area is rural or urbanized. b. The provision may be a denial of equal protection to the extent to which it does not also apply to other property owners. c. In order to comply with zero weed growth, the operator would be required to destroy the surface. 120.13: Visual Impacts and Aesthetics We note that the provisions of the Section generally follow the Broomfield Ordinance, Section 17.54.150;however, the County should note in the implementation of the provision that visual impact mitigation has far greater application to an urbanized area such as Broomfield than to areas of rural Weld County. There would be no rational basis for the County to apply visual impact mitigation requirements to rural areas. 120.13.1: The requirement should not include gathering lines since they are buried underground and are located on easements. The reference to landmarks should be only to those which are designated as such by some governmental authority. 120.13.6: We assume that the provision applies only in cases in which the operator actually disturbs the surface. 1-A:\COMNTSME 31 940339 120.13.8: The provision is generally identical to COGCC Rule 805. See General Comments, paragraph 4 with respect to preemption. 120.14: Special Mitigation Measures The proposed regulations generally follow the Broomfield Ordinance, Section 17.54.160; however, we note again, that the provision has less application to rural Weld County than to an urbanized area such as Broomfield. Note also that the regulation requires mitigation measures in cases where an operator doesn't comply with setback requirements; however, the regulations impose a 350 foot setback in cases in which the COGCC would only require a 150 foot setback and, therefore, is preempted. See COGCC Rules 603 and 604. 120.15: Noise Abatement The proposed regulation is virtually identical to COGCC Rule 803 except that it provides that the County shall grant relief from the requirements to the extent that the COGCC grants relief. The County is preempted from enforcing the same regulation that the COGCC has adopted or adopting a COGCC regulation as its own. See General Comments, paragraph 4. 120.16: Signage The proposed regulation requires the operator to comply with COGCC regulations. The County is preempted from enforcing the same regulation that the COGCC has adopted or adopting a COGCC regulation as its own. See General Comments, paragraph 4. 120.17: Wildlife The proposed regulation is preempted to the extent that the County precludes an operator from drilling in a legal location approved by the COGCC and for which the operator complies with Colorado Division of Wildlife regulations. 120.18: Air Emissions The County is preempted from enforcing regulations that have been adopted by a State agency. See General comments, paragraph 6. 120.18.1: The word "applicable" should be inserted before the words "permit and control provisions" in the second line. 120.18.2: The reference to "nuisance conditions" is vague and ambiguous and requires the County and the operator to make a legal judgment. 120.18.3: Water Quality The COGCC has extensive rules with respect to aquifer protection from oil and gas drilling. See Rules 124, 125, 209, 322.A. and 324. The provision requires the operator to comply with COGCC rules and Colorado Department of Health rules and is preempted because the local jurisdiction cannot either adopt a state rule or requires the operator to follow the state rule. See General Comments, paragraph 4. 122: Pits The COGCC 900 series of rules contain extensive regulations governing exploration and production waste management. These regulations contain specific requirements for reserve pits, production pits, and special purpose pits. The County is preempted from regulating pits and waste management because they are technical matters over which the COGCC 1-A:\COMNTSME 32 940339 has exclusive jurisdiction and because the COGCC has comprehensive regulations in the area. The County is also preempted from imposing regulations that are more stringent than state regulations on the same subject and from enforcing state regulations. See General Comments, paragraphs 2, 3 and 4 and cases including Oborne v. Board of Counts/ Commissioners, supra. The County can be provided with all COGCC pit information using the procedures under Rule 214 by which a local government designee can request information filed with the COGCC. Without limiting the foregoing, the following are some specific problems: 122.1: Pits It may not always be possible to comply with the requirement, depending upon what the term "last level of groundwater" means since much of Weld County is in the outcrop region for the Denver Groundwater Basin. There is no indication of the particular problem which this section addresses. 122.2.1: Fresh Water Reserves There has been no indication that storing fresh water reserves in tanks is a problem. 122.2.3: Reserve Pits The proposed regulation is more stringent that COGCC Rule 903 and is preempted. The COGCC rule only requires that an operator obtain a permit from the COGCC if a pit will either be used in conjunction with salt-based or oil-based drilling fluids or where the operator will encounter salt sections as described in the rule. The purpose of the proposed County regulation on the other hand is to minimize the surface area disturbed and provides that certain size pits are presumed to violate the regulation. The provision is legally insupportable or technically infeasible at least for reasons as follows: • The County has no statutory authority to alter legal property relationships between the surface estate and the mineral estate; • The proposed regulation impairs the vested property and contractual rights of the mineral interest owner; • The proposed regulation would prohibit what the State allows and is therefore preempted; and • The proposed regulation will result in hauling many more loads from the reserve pits than would otherwise be required. 122.2.3: Production Pits a. The proposed regulation is more stringent than COGCC Rule 904 and is preempted. See General Comments, paragraph 3. The COGCC rule exempts pits that will receive an average of less than 5 barrels of produced water a day from permit requirements and requires permits for all other pits. The proposed regulation on the other hand prohibits all 1-A.\COMNTSME 33 940339 production pits except in cases in which the operator demonstrates that the pit will cause no impact to waters. b. The proposed regulation confuses drilling and production. There are no produced waters during drilling. Prohibiting all production pits during production of the well apparently prohibits even lined pits and would make production impossible. c. The proposed regulation is preempted because 1) it prohibits what the State would allow; 2) the State has comprehensive regulations that cover the subject matter of the regulations; and 3) the subject matter is technical in nature. See General Comments, paragraphs 2 and 3. 122.3: Liners The proposed regulation is preempted because COGCC Rule 904b. contains extensive pit lining requirements and because it is a technical matter. COGCC rules for liners apply only to production pits and not to reserve pits. See Rules 903 and 904. The proposed regulation is also, therefore, preempted to the extent that it applies to reserve pits. 122.3.1: It is not clear whether the proposed regulation would give the Weld County Health Department the authority to disapprove liners, however, the regulation is clearly preempted to the extent it does so. 122.3.2: The proposed regulation is more stringent than COGCC Rule 904b.2.b. which requires only 12-mis of thickness. 123: Access a. Access to a drillsite compared with access to a production site is not distinguished. b. Review by the Weld County engineer is limited to a review of road standards only. The County cannot disapprove the location of access since to do so would alter the legal relationship between the surface and the mineral estates. c. It is not clear what is intended in Section 123.1 by the reference to "a minimum unobstructed overhead clearance of thirteen feet, six inches." d. With respect to Section 123.3, note that most farmers do not want roads graveled. 124: Public Access Roads 124.1: The standard for issuing an oversize/overweight truck permit must be the same for all applicants, both oil and gas operators and others. t-A:ICOMNTSME 34 940339 _ _ 1 124.2.2: The section requires that access roads be paved which is almost always incompatible with the wishes of the surface owner. 124.2.3: The word "reasonably" should be inserted before the words "clear of mud" in the first line. 124.4: The proposed regulation is ambiguous as drafted. For example, the operator will not know which roads are so susceptible. It is also objectionable because it presumes roads will be damaged from oil and gas operations. Further, the provision may be a denial of equal protection to the extent that the regulation does not apply to other types of operations. 125: Compliance with COGCC Requirements a. The proposed regulation is preempted to the extent that the County proposes to enforce COGCC regulations. See General Comments, paragraph 4. b. The standard that the County site plan will give way to COGCC regulations to the extent that the plan materially impedes the State's interest is not a correct statement of applicable case law. See General Comments, paragraph 5. c. The proposed regulation goes beyond the land use authority of the County. d. The County has no authority to require an operator to appeal to the COGCC for a variance in cases of conflict. e. The County has no authority to shift the burden of proof to oil and gas operators and to do so may be a violation of due process rights. f. The provision has the effect of depriving operators of rights protected by state law and will impose substantial delays and procedural burdens on such rights. g. The last sentence of the paragraph is ambiguous. h. The procedure for appeal and the extent of the proposed regulations together guarantee that the County will spend large sums of money to hear appeals from oil and gas operators. Appeals will dramatically impact County resources, especially planning and attorney services. Note, for example, that the COGCC processed 233 well permits for Weld County in the first ten weeks of 1994. 126: Site Plan Approvals a. The reference to Section 127 should be to Section 126.2. t-A:\COMNTSME 35 940339 b. The proposed regulation includes no procedure pursuant to which an applicant can appeal a Planning Department decision. See General Comments, paragraph 9. c. The County has no authority to impose conditions on oil and gas operations related to financial guarantees and surface reclamation both because the subjects are not related to land use and because the County is preempted from imposing more stringent regulations than the COGCC. See General Comments, paragraph 3, and Specific Comments, Sections 120.1, 120.2 and 120.7. d. The proposed regulation does not include a timetable for the Planning Department to review an application or clear standards pursuant to which the Planning staff may impose conditions on a permit. In fact, conditions such as "adequate financial guarantees" and "any other measures necessary" are unclear and discretionary and would allow arbitrary decisions by the Planning Department. Drilling could well be rendered uneconomic by the Planning Department's ad hoc interpretation of these vague standards so that the provision may be unconstitutionally vague and a denial of due process. See General Comments, paragraph 9. e. The County is preempted from imposing subjective standards on the denial of a Special Use Permit and cannot, in any event, deny granting a permit for a legally COGCC approved location. f. The discretion conferred upon the Planning Department may amount to an improper delegation by the Board of discretionary authority. 126.2: Review by the Board At a minimum, the conditions which the Board may add must be within the scope of its authority to regulate land use. Also, there is no time period for final Board approval after hearing. 126.2: Effect of Approval The proposed regulation is a denial of equal protection to the extent that rights are vested in applicants for other types of site plans. See General Comments, paragraph 9. 127: Production Water Impoundments The COGCC has adopted comprehensive rules to regulate production pits, the disposal of produced water in production pits and offsite land treatment of exploration and production wastes. See Rules 904 and 907. Also, the provision would require a certificate of designation even where the facility is not a commercial disposal facility. See COGCC Rule 322 A.e. 128: Class II Injection Wells Class II injection wells are comprehensively regulated under COGCC Rules 323 and 324. The COGCC rules provide for a review, hearing and permit process for such wells. The proposed regulation is, therefore, preempted. 128.1: Performance Standards for Class II Wells The standards are preempted to the extent that they conflict with or exceed the technical requirements of COGCC Rules 323 and 1-A9COMNTSME 36 940339 324. They also have no practical application to fully automated injection systems. See General Comments, paragraph 2. 129: Inspections a. Unlimited inspections present an opportunity for unreasonable harassment and may violate Fourth Amendment rights. Inspections should be limited to cases where there is reason to believe a violation exists. b. A provision with respect to inspections similar to the one included in the Broomfield Ordinance should be adopted which allows an inspector to enter the property after reasonable notice and provides the operator with the opportunity to be present. See Broomfield Ordinance 17.54.030. This avoids safety and liability problems. c. Note that the COGCC is given authority by statute to enter upon lands to evaluate adverse environmental impacts from oil and gas operations and that its authority to do so is limited to cases where it has reason to believe such impacts are occurring. See C.R.S. 34-60-125 (2)(a), as amended. 130: Enforcement a. The County is preempted by state law and regulations from imposing financial assurance and insurance requirements on oil and gas operators. See General Comments, paragraphs 2 and 3 and Specific Comments, Sections 120.1 and 120.2. b. The authority of the Board to enforce oil and gas regulations is limited to the extent that it has authority to adopt them. County authority to adopt regulations is limited to recognized areas of land use such as visual impact mitigation, noise impact mitigation, wildlife and floodplain impact mitigation and public access. The County has no authority to adopt regulations with respect to site remediation or waste management, for example. See General Comments, paragraphs 2 and 3. c. The County should not be allowed to enter a site at its discretion without notice or the opportunity to be present so as to avoid safety and liability issues. d. The appeal procedure described in Section 130.2 is not clearly stated with respect to the time to appeal and the standards that the Board is to apply with respect to alleged violations. 130.3: Withholding of Permits Senate Bill 177 establishes penalties for violations of the Act, COGCC rules or permits issued by the COGCC, and a procedure for the COGCC to issue cease and desist orders. 1-A:\COMNTSME 37 940339 1 130.4: a. The provision has the effect that a bond may be in place indefinitely and includes vague and arbitrary standards for the release of bonds. See General Comments, paragraphs 2, 3, and 9, and Specific Comments, Sections 120.1 and 120.2. b. The last sentence of the paragraph is ambiguous and provides no standards. 131: Effect of Regulation a. The Section applies retroactively to existing wells facilities in that operators will have to comply with regulations at least with respect to emergency response plans, insurance requirements, waste handling, plant control and signage for an operator to be able to obtain a certificate of compliance. Thus, the County will indirectly apply the regulations to existing oil and gas facilities. As a general rule of law, a zoning ordinance that applies retroactively to abrogate valid exiting uses and thereby impairs vested property rights will not be upheld. See General Comments, paragraphs 7 and 9. b. The words "or permitting" should be inserted after "relocation" in the second line. c. The paragraph is vague and unclear as to inventory and whether it applies only to wells or all oil and gas equipment and facilities. d. Any certificate of compliance should be to the best knowledge of the operator. BUILDING CODE AMENDMENTS 20_14: The entire Section is preempted in that all of the issues covered in the Section are covered by COGCC rules and because the matters covered are all technical in nature and, therefore, within the exclusive jurisdiction of the COGCC. See General Comments, paragraphs 2 and 3. 20.14.5: The Section is not consistent with COGCC Rule 603b which applies only to designated high density areas. Note that the COGCC is proposing amendments to the high density designation process. Also, keying shut-in to sudden changes in pressure doesn't work since pressure violations occur throughout the life of a well. 20.14.6: The second sentence imposes a certification requirement that is not feasible and that is not an appropriate way to determine the safe condition of equipment. The requirement may also be confiscatory and appears arbitrary. I-A\COMNTSME 2Q 940339 20.8: The standard for preemption in the Section does not accurately reflect the Supreme Court standard set forth in the Bowen/Edwards case. See General Comments, paragraph 5. 20.9: The words "or permitted" should be inserted after the word "existing" in the second line. 20.11: The Section exceeds and conflicts with COGCC standards in COGCC Rule 604 and is, therefore, preempted. I-A:\COMNTSME 39 940339 6CC0V6 U ZN CO N N L7a v U U C O O ti 7 w ,N.y N .at d r�", cCC c0 U Y '-' y N C :: cCa vi U a❑� a a o , a_I U _ E [� b u d c .-, y N "- N E. 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PREEMPTION: The issue of whether the Colorado Oil and Gas Conservation Act ("Act") preempts all regulation of oil and gas operations by local governments was decided, at least, in part, by the Colorado Supreme Court in Lundvall Bros., Inc. v. Voss' involving the home rule city of Greeley, Colorado and in Bowen/Edwards Assoc., Inc. v. Board of County Comm'rs.2 involving regulations by La Plata County in southwest Colorado. In the Voss case, the Court held that a home rule city may enact local land use regulations applicable to oil and gas operations within the city; however, the local jurisdiction was preempted from adopting regulations that were in conflict with state law and regulations or that frustrated the state goal of efficient and fair development of production as set forth in the Act. In the Bowen/Edwards case, the Court held that there is a state interest in the uniform regulation of oil and gas operations, but that there is not necessarily an implied legislative intent to totally preempt all aspects of a county's statutory authority to regulate land use within its jurisdiction. The Court was not precise in either case in articulating the extent to which local land use regulations could apply to oil and gas activities, and it did not in either case establish precise guidelines to determine questions of preemption with respect to land use matters. It is clear from the cases, however, that there can be no local regulation of the technical aspects of oil and gas operations since the Court in Bowen/Edwards expressly approved such a reading of an earlier case, Oborne v. Board of County Commissioners.' The Court in Oborne struck down technical requirements that Douglas County sought to impose on oil and gas operators including, regulations with respect to the construction of a dirt berm for sediment ponds; land reclamation requirements; a bond to cover reclamation; protection of water supplies and the disposal of liquid wastes; assurances regarding surface spills; a fife protection plan; cement casing requirements; independent monitoring and technical advice requirements; and protection of underground water supplies. Examples of technical matters referred to by the Lundvall Bros. , Inc. v. Voss, 812 P.2d 693 (16 Colo. App. 1990) , aff'd. Voss v. Lundvall Bros. , Inc. , 831 P.2d 1061 (Colo. 1992) . 2 Bowen/Edwards Assoc. , Inc. v. Board of County Comm'rs. , 812 P.2d 656 (Colo. App. 1990) , aff'd in part and rev'd in part, 831 P.2d 1045 (Colo. 1992) . 3 764 P.2d 397 (Colo. App. 1981) . See Bowen/Edwards Assoc. v. Board of County Comm'rs. , supra, at 1060 fn 7. 1-A:\ATTACHMENT.1 940339 Bowen/Edwards Court, included "drilling, pumping, plugging, waste prevention, safety precautions and environmental restoration."4 The Court in the Oborne case further found that the Board of County Commissioners of Douglas County could not impose conditions to grant a permit for oil and gas operations with respect to matters for which the Act had granted specific jurisdiction to the COGCC. For this reason, the Court struck down certain permit conditions imposed by the County and found that the COGCC had specific statutory authority to prevent pollution of water supplies, to prevent fires, to require reclamation of the land, and to require security from the operator to accomplish such purposes. The Court held that the Board had no authority to either impose conditions on the issuance of a permit or to deny a permit based on such conditions.5 Since the Colorado Supreme Court decided the Voss case and the Bowen/Edwards case, the COGCC has adopted additional regulations that cover several aspects of oil and gas operations. The COGCC in May 1992 adopted comprehensive regulations with respect to setbacks in high density areas, the regulation of noise and aesthetic impacts of oil and gas operations, the handling and disposal of exploration and production wastes and provisions for the participation by local governments in the location of wells and well facilities. The COGCC also adopted the Wattenberg Special Field Rules in August 1993 which are specific regulations for the Wattenberg area covering notice to surface tenants and surface owners of the commencement of operations, subsequent well operations and drill site reclamation operations, procedures for consultation with surface owners with respect to the location of roads, production facilities and well sites, site preparation requirements for fencing, soil removal and segregation, and reserve pit uses and reclamation procedures that include pit closures and drill site reclamation. The Colorado Senate has also recently passed Senate Bill 177 which will strengthen the statutory authority of the COGCC with respect to matters of public health, safety and welfare, the mitigation of environmental impacts from oil and gas operations, reclamation of land and soil, and requirements for financial assurance from operators. Senate Bill 177 will also significantly strengthen the authority of the COGCC to enforce its regulations by providing for a penalty schedule, issuance of cease and desist orders and the suspension, modification and revocation of permits. The Bill has passed through the House Agricultural Committee and is presently being reviewed in House Appropriations. During the COGCC's deliberations of the proposed rules in 1992 and 1993, the COGCC carefully considered and heard testimony with respect to the extent to which the particular regulations should apply and the scope of regulation for the subject matter in the specific regulations. For example, the COGCC had the benefit of a full discussion and hearings on all issues presented by industry, local governments and surface owners when it adopted the 4 at 1058. 5 at 401. 1-A:\ATTACHMENT.1 Attachment D - 2 940839 Wattenberg Special Area Field Rules so that the Wattenberg Rules comprehensively cover the matters included in the Rules both with respect to what is regulated and the extent of the regulation and what the Commission chose not to regulate. In that the Act gives the COGCC specific statutory authority to promulgate all of the regulations, case law dictates that the County is preempted from regulating in the areas covered by the regulations. A summary of the preemption standards which apply to local regulations based on a review of the legal standards and case law follows: SUMMARY OF PREEMPTION STANDARDS: a. With respect to technical matters, local regulation will be preempted in all aspects 1) even where there is no state regulation on point and 2) where the local regulation is identical to that of the state. b. With respect to matters charged to the COGCC by the Act, local regulation will be preempted in all aspects. c. With respect to the portions of Weld County covered by the Wattenberg Special Area Rules, Weld County will be preempted from regulating with respect to all matters covered by the Rules. d. With respect to nontechnical matters, local regulation will be preempted to the extent that it conflicts with or goes further than the state statute or regulation on the same matter and thereby forbids or burdens what the state has authorized and also when the state has comprehensively reviewed the matter and regulated it. e. With respect to well location, local regulation will be preempted to the extent that it would prohibit the drilling of a well at a legal, COGCC approved, location. f. A local entity has no authority to adopt a regulation that relates to oil and gas operations which is not within its statutory authority to regulate land use. Because the preemption doctrine substantially limits the area in which a local entity can regulate oil and gas activity, the local entity is similarly limited in what it has the authority to require and review. For example, the County requires that an oil and gas operator obtain a special use permit to conduct what is defined in the proposed regulations as "Oil and Gas Operations." We believe that the County is limited in granting or denying a special use permit at least as follows: • The scope of review for a special use permit must be limited to an inquiry into only those matters which the County can validly regulate. 1-A:\ATTACHMENT.1 Attachment D - 3 940339 • Compliance by an operator with requirements that the County imposes for an operator to obtain a special use permit can make the drilling of certain wells economically prohibitive such that it can be argued that such requirements on their face hinder the State in achieving its interest to foster the development and production of oil and gas within the State, a result which is disapproved in Bowen/Edwards, supra, and Lundvall, supra. • Commission Rule 303 provides that, as a general rule, a permit to drill is void after 120 days from the date it is approved. A special use permit process which would extend beyond the 120 day drilling window (thus effectively denying the operator the right to use the state permit) is void as being in conflict with and thus preempted by the state drilling regulation. In summary, the Bowen/Edwards and Voss cases allow local jurisdictions to regulate utilizing the authority conferred upon them by statute to regulate land uses; however, the land use authority of the County is circumscribed to the extent that the exercise of that authority by the County frustrates the goals in the Act, including encouraging efficient and economic production of oil and gas. Traditional areas of land use would include matters of noise and aesthetics, wildlife impact mitigation, floodplains and geologic hazards, and access and use of County roads. B. REGULATORY TAKING: Both the State and United States Constitutions prohibit the taking of private property without due process. The Fifth Amendment to the United States Constitution says, No person shall . . . be deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use without just compensation. The Fifth Amendment is applicable to the states through the Fourteenth Amendment. Regulations that allow the County to deny a special use permit may constitute a regulatory taking, especially where the operator is deprived of all economically viable use of land or his investment-backed expectations to develop his property.' The Court in United Nuclear Corporation v. United States' and many other courts have specifically found that a leasehold interest in minerals may be the subject of a taking within the 6 See for example, Lucas v. South Carolina Coastal Council, 505 U.S. , 112 S. Ct. 2886, 120 L. Ed. 2d 798 (1992) . ' 17 C. Ct. 768, aff'd 912 F.2d. 1-A:\ATTACHMENT.1 Attachment D - 4 940339 meaning of the Fifth Amendment. The United States Claims Court and the Federal Circuit Courts have awarded compensation or affirmed decisions to award compensation to energy and mining companies based upon claims by the companies that their mineral properties had been taken by the government without just compensation because of government regulations which disallowed the development by the companies of their mineral rights.' In Florida Rock Industries v. United States, for example, the Court awarded Florida Rock over $1 million in compensation based on a takings claim that the Army Corps of Engineers deprived Florida Rock of almost all economically viable use of its property when the Corps denied Florida Rock a permit to discharge dredged materials into waters regulated by the Clean Water Act. In United Nuclear Corporation v. United States, the Court found that United's mining plan to mine uranium pursuant to two leases which the Navaho Tribal Council had issued to United satisfied the regulations of the United States Geological Survey as well as the necessary environmental impact regulations and that United had spent substantial sums of money in expectation of mining the leases. The Court held that the leasehold interests owned by United had been taken when the Secretary of the Interior refused to allow United to mine the leases without the approval of the Navaho Tribal Council (which approval was not forthcoming prior to the expiration of the leases), and the government was required to pay United just compensation. The Michigan Court of Appeals recently decided an appeal by the State of Michigan in the case Miller Brothers v. State of Michigan.9 The facts in the case were that the Miller Brothers had taken oil and gas leases which covered portions of the Nordhouse Dunes area in western Michigan and then applied to the Michigan Department of Natural Resources for permits to drill the leases. After review by the State, public hearings, and the draft of an environmental impact statement, the Director of the Department of Natural Resources for the State issued an order which prohibited all oil and gas drilling in the area. The Miller Brothers and the mineral interest owners filed complaints against the State alleging inverse condemnation, and the County Court thereafter awarded a money judgment of $71 million plus interest. The Michigan Court of Appeals affirmed the County Court decision that a taking had occurred, but remanded the case on the question of the standard for compensation. The Court found that the taking was temporary and not permanent in nature and stated: 9 See, for example, Whitney Benefits, Inc. v. United States, 18 Cl. Ct. 394 (1989) , corrected, 20 Cl. Ct. 324 (1990) , aff'd. , 926 F.2d 1169 (Fed. Cir.) , cert. denied, 112 S. Ct. 406 (1991) ; Florida Rock Industries v. United States, 21 Cl. Ct. 161 (1990) ; United Nuclear Corporation v. United States, supra; Western Energy Company v. Genie Land Company, 737 P.2d 478 (1987) . 9 1994 WL 56509 (Mich. App. ) Docket Number 150573, decided February 22, 1994 . 1-A:\ATTALhichi T.1 Attachment D - 5 940339 Plaintiffs' have property that in 1987 was estimated to be capable of producing an income stream with a value of over $70 million if developed. What rent would someone with such an asset, who is in a position to develop it, have charged for delaying development? More than likely, something close to the amount of money they could have received in interest on present value of the income stream. Note that the cases we cite do not stand for the proposition that a governmental entity cannot prevent the exploration and development of the mineral estate. The cases do hold, however, that in the event that a governmental entity chooses to regulate, regulations which prevent the exploration and development of the mineral estate may amount to a permanent or a temporary "taking" such that the governmental entity will be liable to the mineral interest owners and lessees for just compensation. C. IMPAIRMENT OF VESTED PROPERTY AND CONTRACTUAL RIGHTS: Both the Colorado and United States Constitutions prohibit states from passing laws that impair contracts. Article II, Section 11 of the Colorado Constitution says: No ex post facto law, nor law impairing the obligation of contracts, or retrospective in its operation, or making any irrevocable grant of special privileges . . . shall be passed by the general assembly. Article I, Section 10 of the United States Constitution says: No state shall . . . pass any . . . law impairing the obligations of contracts, . . . Case law provides, however, that the prohibition against the impairment of contracts is not absolute and that private contracts may be modified through a legitimate exercise of the police power to protect the public welfare. The Montana Supreme Court in the case Western Energy Company v. Genie Land Company10 struck down a Montana statute that required an applicant for a permit to conduct strip mining operations to include with his permit a written consent or waiver from the owner of the surface estate in cases in which the surface owner did not own the mineral estate. The Court found the state statute unconstitutional both as a Fifth Amendment taking by the State without compensation and as an impairment of the contract rights of mineral interest owners. 10 737 P.2d 478 (1987) . 1-A:\ATTACHMENT.1 Attachment D - 6 940339 The Montana Court cited the United States Supreme Court case, Energy Reserves Group, Inc. v. Kansas Power & Light Co.," for the test to apply to determine whether a state law impermissibly impaired private contract rights and considered whether the state law substantially impaired the contractual relationship, whether there was a significant and legitimate public purpose for the statute, and whether the adjustment in rights between the contracting parties was based upon reasonable conditions that were appropriate in light of the public purpose. The Court, in applying the test, found that the state statute significantly impaired the right of Western to mine its coal reserves because its rights were subjected to ". . . the vagaries of the surface owner for consent to enter and mine"12 and that the statute did not bear a substantial relationship to the public health, safety, morals or general welfare in that it did not address reclamation, conservation or other policy goals and was limited to cases in which the mineral and surface estates were severed. The Court then concluded that the state statute created an impermissible impairment of private contract rights.t3 Colorado case law is clear that the mineral owner (or lessee) owns the dominant estate and has the right of reasonable access to and use of the surface estate to extract minerals.14 Regulations that purport to reverse this basic tenet of Colorado property law and thereby deprive the mineral interest owner of its vested property and contractual rights are violative of federal and state constitutional provisions.15 11 459 U.S. 400, 412, 413; 103 S. Ct. 697, 704-705; 74 L. Ed. 2d 569, 581- 582. (1983) 12 at 484. 13 The Court quoted Pennsylvania Coal Co. v. Mahon (1922) 260 U.S. 393 at 414, 43 S. Ct. 158 at 160; 67 L. Ed. 322 at 325, as follows: "So far as private persons or communities have seen fit to take the risk of acquiring only surface rights, we cannot see that the fact that their risk has become a danger warrants giving to them greater rights than they have bought. " 14 See Frankfort Oil Company v. Abrams, 413 P.2d 190 (Colo. 1966) . 15 See also Miller Brothers v. State of Michigan, supra at 3 wherein the Court expressly stated that " (P) laintiffs could not be ordered to refrain from exercising their rights to extract oil and gas merely because it might have some detrimental effect on the surface property: the surface owner had a contractual duty to allow plaintiffs to exercise their rights to extract oil and gas, even if it caused some harm to the surface property. " 1-A:\ATTrcWCNT.1 Attachment D - 7 940339 Finally, retroactive application of new regulations to existing oil and gas facilities is prohibited. A general rule of law is that a zoning ordinance that applies retroactively to abrogate valid existing uses and thereby impairs vested property rights will not be upheld.16 16 See, for example, City and County of Denver v. Denver Buick, Inc. , 141 Colo. 121, 347 P.2d 919 (1960) ; 83 Am. Jur. 2d Zoning § 624. 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'"� U t ° ct ° -d v) c'Jd .� O O +�-J C.-4 -C a s d ro o o .� o "C a .g FU. o a m O o o o Ln > o b cd a) a 9 U 0 .. a ^ o aJ O N F. CO•-. -O . E O U m E +-, 23 o d 0 p � C ^ ° g ^o o U ^o G II < FO. '0 .E pa ,_, c/) G p. a) . F 3 U o cd -O > Cd a a) a o U r-, N M 4 Lei .'tW UNIVERSITY of DENVER • Department of Finance College of Business Administration April 1, 1994 Molly Sommerville, Esquire Welborn Sullivan Meck & Tooley, P.C. 1700 Broadway, Suite 1820 Denver, CO 80290-1801 Dear Molly: I have attached an outline of the Economic Impact Study that I would propose be done in order to evaluate the economic implications of the proposed oil and gas regulations for Weld County. As you can see from my summary page of the outline, this report will include the following four sections: 1. Background analysis of the economic importance of the oil and gas industry to Weld County. 2 . Estimates of the costs to Weld County to enforce the proposed oil and gas regulations. 3 . Costs to oil and gas companies to comply with the proposed regulations. 4 . Estimates of the impact that these additional costs will have on drilling activity and county revenues. I look forward to working with you on this project. Thank you for inviting me to participate. Sincerely, Ron Rizzuto(' Professor of Finance • • 'f 2020 S. Race St . Denver, Colorado 80208 303.871-3322 FAX# 303.871-4580 The University of Denver is an equal opportunity/affirmative action institution. 940339 r Outline of Economic Impact Study for Proposed Oil and Gas Regulations for Weld County The Economic Impact study for the proposed oil and gas regulations for Weld County will consist of four parts: 1. The first section will be a background analysis of the economic importance of the oil and gas industry to county revenues as well as the incomes of Weld Country residents. This section will also include some discussion of the implications for the county of a decline in ad valorem/severance tax revenues in light of Amendment 1. 2 . This section will include an estimate of the costs to Weld County to enforce the proposed oil and gas regulations. This section of the study will segment the costs into two categories - the costs of enforcement of regulations that are "duplicative" of the regulations of the Colorado Oil and Gas Conservation Commission (COGCC) , and the costs of enforcement of additional regulations. This section of the report will also consider the limitations imposed by Amendment 1 on the counties' ability to shift the costs of regulation to oil and gas companies (i. e. through permitting charges) . 3 . Section 3 will analyze the costs that will be incurred by oil and gas companies to comply with the regulations as they are proposed. It will consider the direct costs of compliance as well as the county costs that are being shifted to the oil and gas sector. 4. The final part of the economic impact analysis will include some speculation on the impact that these additional costs will have on drilling activity and county revenues. The estimate found in this section will be tied to a "well economics simulation" analysis that considers the types of wells that will become "uneconomic" as a result of these additional costs. What follows below is a brief outline of the data and analysis that will be included in each of the sections of the economic impact study. 910339 Section 1 - Background Analysis A. Importance of oil and gas industry to Weld County (Five-year historical analysis) . Ad valorem and severance tax revenues - dollar and percent of total county revenues. B. Importance of oil and gas industry to Weld County citizens (Five-year historical analysis) . 1. Direct county employment in the oil and gas industry. 2 . Employment income from oil and gas. 3 . Royalty income to mineral interest owners. C. Implications to county finances of a decline in ad valorem/ severance taxes in light of Amendment 1. Section 2 - Cost to County to Enforce Proposed Regulations A. Costs to enforce regulations that are "duplicative" of COGCC regulations. For this section of the report, data will be collected from COGCC. This will include budget data along with follow-up interviews with COGCC staff to refine cost estimates. B. Costs to enforce "additional" regulations. Data will be compiled from two primary sources. The first one will include data collection and interviews with surrounding communities (Broomfield, Thornton, etc. ) which may have similar regulations. The second set of data will be compiled from estimates of the skill levels and associated time requirements of the proposed regulations. These time and skill estimates will be converted into aggregate dollar amounts by applying prevailing salary levels and current levels of oil and gas permitting in Weld County. C. County's ability to shift, through permitting charges, the cost of enforcement to oil and gas companies in light of Amendment 1 restrictions. Section 3 - Costs of Compliance for Oil and Gas Companies A. Direct costs of compliance. Data will be collected via interviews with local area oil and gas companies. A short questionnaire will be developed and utilized in the interview so as to provide structure and consistency for the responses as well as focus on the "incremental" costs of the proposed oil and gas regulations. 940339 B. County costs shifted to oil and gas sector will be estimated from the information developed in Section 2 . Section 4 - Impact of proposed regulations on drilling activity and county revenues A. Well economic simulation. Simulations using various typical types of well parameters (i.e. oil in place, decline curves, etc. ) , will be conducted to determine the impact that the additional costs will have on drilling economics. B. Estimate of impact on drilling activity. Information from the simulations will be utilized to estimate the number of potential wells that would be judged to be non- economic as a result of the additional costs. Future drilling activity will be adjusted downward to account for the non- economic wells. C. The reduced drilling activity will be converted into lost ad valorem/severance revenues for the county. D. This section of the report might also consider the impact that the proposed regulations, as applied to workovers, recompletions and change outs of equipment, would have on the economics of existing producing wells. 940339 CONSTITUTIONAL DIFFICULTIES WITH THE PROPOSED WELD COUNTY OIL AND GAS REGULATIONS (Draft dated March 3, 1994) Jan G. Laitos John A. Carver, Jr. Professor of Law University of Denver College of Law The proposed Weld County oil and gas regulations appear to be unconstitutional because (1) they "take" the property interest held by oil and gas operators in Weld County without just compensation, in violation of both the United States and Colorado Constitutions; (2) they suffer from due process infirmities; and (3) they may be inconsistent with the Colorado Constitution's prohibition against retroactive laws. I. FACTS A. OIL AND GAS OPERATORS IN WELD COUNTY HAVE A PROPERTY INTEREST IN THE MINERALS WHICH GIVES THEM A RIGHT TO THE SURFACE 1. The property interest held by oil and gas operators is in the form of a fee or leasehold. 2. By Colorado common law, this property interest grants oil and gas operators rights to the surface. B. THE PROPOSED REGULATIONS WILL ADVERSELY AFFECT BOTH PRESENT AND FUTURE OIL AND GAS OPERATIONS 1. The regulations will affect all operators who "commence" oil and gas operations after the effective date of the regulations (§ 105). 2. The regulations will apply in significant ways to ongoing operations, particularly those which experience any change in the nature of their existing oil and gas operations (§§ 10; 131.1). 940339 II. THE EFFECT OF THE PROPOSED REGULATIONS ON OIL AND GAS OPERATORS IN WELD COUNTY A. THE REGULATIONS WILL INTERFERE WITH THE PROPERTY RIGHT HELD BY OIL AND GAS OPERATORS 1. The property interest in the minerals allows oil and gas operators a right to make reasonable use of the surface in order to extract the mineral. 2. The regulations will interfere with this interest by making it too costly and burdensome to exercise the property right in minerals. 3. The following provisions, among others, will be especially burdensome: (1)financial assurance (sections 110.6; 120.1 and 120.2; 126; 130); (2) reclamation (sections 110.7; 110.9A; 120.7; 126); (3) waste disposal and management (sections 110.3; 127; 128); and (4) continuing obligations of the mineral interest owner (sections 120.7.1.3; 120.7.1.4; 120.7.1.5). B. THE REGULATIONS WILL BENEFIT THE PRIVATE SURFACE OWNER, AND NOT THE GENERAL PUBLIC INTEREST 1. The regulations are designed to protect the private surface owner from the activities of the dominant mineral estate. 2. The regulations favor the surface owner over the mineral owner, and therefore are not intended to just promote the public interest. C. THE REGULATIONS WILL RETROACTIVELY AFFECT BOTH FUTURE AND EXISTING OIL AND GAS OPERATIONS 1. The regulations apply to future oil and gas operations which "commence" operations after the effective date of the regulations (§ 105). 2. The regulations in part apply to existing operations (§ 131.1). 3. The regulations will likely apply when existing operations undergo changes (§ 10). 94C-339 ' ,; III. SUMMARY OF CONSTITUTIONAL PROBLEMS WITH THE PROPOSED REGULATIONS A. THE REGULATIONS WILL "TAKE" THE PROPERTY INTEREST NOW HELD BY THE OIL AND GAS OPERATORS 1. This property interest is the common law right to make reasonable use of the surface. 2. There will be an unconstitutional taking under the federal and state constitution because of the economic impact on present and future oil and gas operations. 3. There will be an unconstitutional taking under federal and state constitutions because the regulations will defeat the reasonable investment-backed expectations of oil and gas operators. 4. There will be an unconstitutional taking because the regulations benefit a private party (the surface owner) and not the public good. B. THE REGULATIONS VIOLATE THE COLORADO CONSTITUTION BECAUSE THEY WILL OPERATE RETROACTIVELY TO IMPAIR AND BURDEN THE VESTED RIGHT HELD BY OIL AND GAS OPERATORS 1. The property interest held by oil and gas operators is a "vested property right" protected by the Colorado Constitution. 2. The regulations will impair this vested right by adding a new duty or obligation. IV. OIL AND GAS OPERATORS IN WELD COUNTY WITH A MINERAL INTEREST HAVE A PROTECTED COMMON LAW PROPERTY RIGHT TO A DOMINANT MINERAL INTEREST WITH RESPECT TO SURFACE OWNERS A. THE MINERAL INTEREST IS A PROPERTY RIGHT 1. Colorado common law has consistently and traditionally recognized and protected the mineral interest as a form of property. 2. This common law property right has not been abridged by Colorado statute. 3. Weld County does not have statutory authority to interfere with this common law property right. 9 '3339 B. THE MINERAL INTEREST OWNER HAS AS PART OF THE PROPERTY RIGHT THE RIGHT TO MAKE USE OF THE SURFACE • The owner of the mineral estate possesses the right of surface usage that is reasonably necessary to the successful exploitation of the mineral resource. Rocky Mountain Fuel Co. v. Heflin, 366 P.2d 577 (Colo. 1962). • The mineral lessee has the right to use so much of the surface as may be reasonably necessary for mineral operations. Frankfort Oil Co. v. Abrams, 413 P.2d 190 (Colo. 1960). • The mineral owner has the right to mine the minerals, even if the surface estate must be disturbed. Gilpin Investment v. Perigo Mines, 421 P. 2d 477 (Colo. 1966). • A mineral lessee has a right of access to the property to use the surface as reasonably may be necessary to extract minerals, and a surface owner may not interfere with this right. Davis v. R.K. Cramer, 793 P. 2d 605 (Colo. App. 1990). • Where the surface estate has been severed from the mineral estate, the mineral owner has the right to conduct operations on the surface. Grynberg v. City of Northglenn, 739 P.2d 230 (Colo. 1987). • The mineral owner has the right to remove minerals, even if it entails damaging the surface. Union Pac. R. Co. v. Hanna, 214 P. 550 (Colo. 1923). V. THE WELD COUNTY REGULATIONS WILL "TAKE" THE PROPERTY OF THE OIL AND GAS OPERATORS A. A REGULATION CAN BE A TAKING IF IT DENIES AN OWNER ECONOMICALLY VIABLE USE OF PROPERTY 1. For a regulation to "take" property without compensation, it need not prevent all use of the property. It is sufficient if the regulation merely denies a property owner "economically viable use" of property. Agins v. City of Tiburon, 447 U.S. 255, 260 (1980). 2. To determine if economically viable use has been denied by a regulation, one must look to the nature of the property interest that has been affected or diminished in value. 3. If that property interest is specially protected by state common law, then a regulation that interferes with it, or adversely affects it, may be a taking of that 9;:-.0339 property right. Lucas v. South Carolina Coastal Council, 112 S.Ct. 2886, 2894 n.7 (1992). 4. If the property interest is specially protected by state common law, and if the owner of the property interest had no reason to believe that it would be burdened in the future, that interest is protected by the Takings Clause from interference, even if not all of the interest is taken away. Lucas, 112 S.Ct. at 2900-01. 5. The property interest held by the oil and gas operators is specially protected under Colorado common law, and it will be interfered with by the proposed regulations. B. THE REGULATIONS ARE A TAKING BECAUSE THEY INTERFERE WITH DISTINCT INVESTMENT-BACKED EXPECTATIONS 1. If a property owner has distinct investment-backed expectations in the use of that owner's property, a regulation which defeats those expectations will be a taking. Lucas, 112 S. Ct. at 2895 at n.8. 2. An expectation is "distinct" if it is specially protected under common law. 3. An expectation is "investment-backed" if the owner of the property reasonably relied on the common law protection continuing. 4. When there are no background principles of property law which would otherwise have alerted the mineral interest owner of the likelihood of a new restriction on a previously protected property interest (and there are no such principles in the case of a mineral interest owner in Colorado), then that new restriction may be a taking. Concrete Pipe Products of California v. Construction Laborers Pension Trust, 113 S.Ct. 2264, 2291-92 (1993). C. A REGULATION CAN BE A TAKING IF IT DOES NOT SUBSTANTIALLY ADVANCE A LEGITIMATE STATE INTEREST 1. If a regulation that interferes with property (but does not necessarily take all the property) does not advance a "legitimate state interest," that regulation is a taking regardless of the impact on the property owner. Nollan v. California State Coastal Com'n, 483 U.S. 825, 834 (1987). 2. The interest advanced by the proposed regulations is to protect private surface owners, and this is not "legitimate" because of a lack of "public" interest advanced by the regulations. 94:0339 D. IF THE REGULATIONS ARE A TAKING OF PRIVATE PROPERTY HELD BY OIL AND GAS OPERATORS, THEN WELD COUNTY WILL HAVE TO PAY JUST COMPENSATION TO THE INJURED OIL AND GAS OPERATORS 1. Where a government's actions have worked a taking, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective. First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 321 (1987). 2. If an oil and gas operator's property interest is taken by the regulations, any Weld County justifications for the regulations (e.g., to protect the surface) will be irrelevant to the duty to pay just compensation. First English, 482 U.S. at 315. E. THE WELD COUNTY REGULATIONS ARE A TAKING UNDER COLORADO'S INTERPRETATION OF THE UNITED STATES AND STATE CONSTITUTION 1. If a regulation interferes with investment-backed expectations, destroys an essential and legal use of property, or has an unduly harsh impact on the private property owner, it is a taking under Colorado's interpretation of the federal constitution. State of Colorado v. The Mill, 1993 WL 125083. 2. Other state supreme courts have found there to be federal takings violations when state laws impose unreasonable burdens on the dominant mineral owner. Western Energy Co. v. Genie Land Co., 737 P.2d 478 (Mont. 1987). 3. The Colorado Constitution may be violated if a regulation is a taking because it "goes too far" by having a "severe economic impact" on private property rights. Kirk v. Denver Publishing Co., 818 P.2d 262 (Colo. 1991). 4. The proposed regulations will have severe economic impact on the private property right held by the oil and gas operator. VI. THE PROPOSED REGULATIONS MAY BE INCONSISTENT WITH DUE PROCESS A. THE REGULATIONS TREAT ONE ACTIVITY (OIL AND GAS OPERATIONS) MORE SEVERELY THAN OTHER ACTIVITIES THAT ALSO AFFECT THE SURFACE Everett v. City of Tallahassee, 840 F. Supp. 1528 (N.D. Fla. 1992) (regulations which regulate similar activities differently may be subject to an attack under due process for being arbitrary). 910.333 B. THE REGULATIONS IMPOSE AN UNFORESEEN LIABILITY Concrete Pipe, 113 S.Ct. at 2287-89 (possible due process violation when risk of new liability was not voluntarily assumed by the private party, and when the common law property right did not give the owner notice of a likely possible change in the right). VII. THE PROPOSED REGULATIONS IMPAIR VESTED RIGHTS AND VIOLATE THE COLORADO CONSTITUTIONAL PROHIBITION AGAINST RETROACTIVE LAWS A. THE COLORADO CONSTITUTION PROVIDES THAT "NO . . . LAW RETROSPECTIVE IN OPERATION . . . SHALL BE PASSED" COLO. CONST. ART. II, SECTION 11 1. A law is retrospective in operation when it "takes way or impairs vested rights acquired under existing laws, or creates a new obligation, or imposes a new duty . . . ." Van Sickle v. Boyes, 797 P.2d 1267 (Colo. 1990). 2. The proposed regulations will impair vested rights and create new obligations and duties. See P-W Investments, Inc. v. City of Westminster, 655 P.2d 1365, 1371 (Colo. 1982). B. AN OIL AND GAS OPERATOR'S MINERAL INTEREST IS A VESTED RIGHT THAT WILL BE IMPAIRED BY THE PROPOSED REGULATIONS 1. A "vested right" is a right that has independent existence once it vests. Ficarra v. Dept. of Reg. Agencies, 849 P.2d 6 (Colo. 1993). 2. The property right held by the oil and gas operator is a vested right because it is acknowledged in and protected by Colorado common law, and once acquired it is an independent property interest protected by the Takings and Due Process Clauses of the United States Constitution. 3. The proposed regulations will impair the vested property right held by oil and gas operators in Weld County by imposing new, unforeseen, and extremely costly new duties on an historically protected property interest. 940339 INSURANCE 99g r8th Sneed.Slum dun MANAGEMENT Den rr,Colorado Bozos 4 ASSOCIATES_ Ia��sl298 8888 PAX ls 1293 8t�I1'I INC AFFILIATIONS: Assurex. Into sum March 30, 1994 Jeff Welborn, Attorney at Law Welborn Sullivan Meck & Tooley, P.C. 1700 Broadway, Suite 1820 Denver, CO 80290-1801 RE: Proposed Financial Guarantee Regulations Weld County, Colorado Dear Mr. Welborn: I have been active in following the progress of oil & gas regulation and bonding since 1986. Over the course of the last year or so, I have worked extensively in trying to educate both regulators and the oil & gas industry as to the difficulties of securing irrevocable financial guarantees required of oil & gas companies. I have made various presentations, including testimony before the Senate and serving on the Colorado Oil & Gas Conservation Commission Bond and Surface Damage Task Forces. I also have provided financial guarantees for the agricultural industry over the past decade. I have done much the same type of work educating regulators and the agricultural community as to the hardships caused to farmers, and agricultural dealers who have to post financial security to suppliers, regulators or courts. Interestingly, the agricultural industry and the oil & gas industry are both industries which have traditionally experienced difficulty securing bonding. Both industries require an extensive investment in equipment and machinery to bring their product to market. Both have limited cash and working capital which sureties see as essential staying power as obligations need to be met, even if the crop is lost or the well is dry. Both industries are cyclical and are traditionally tougher credit risks. In the surety bond industry, there are literally thousands of different bonds required. Bonds are required at the federal, state, and local levels with each having their own bond forms, requirements and applicable statutes. Although it may not seem like much for Weld County or another County to increase its requirements, such increased requirements can force many • firms out of business. 310339 Cutting off life blood of working capital As discussed above, both oil & gas companies and agricultural concerns need working capital and cash to survive. Every dollar posted as security is a "frozen" dollar which can't be used to operate, pay bills or for oil & gas companies, plug wells and properly reclaim affected land. Sureties extend bond credit based on working capital and will typically only extend a small amount of credit in relation to working capital and net worth. Of nearly 300 treasury approved surety companies, only a handful will even consider extending oil & gas plugging and reclamation bonds. Most of those require a CD to be posted with the surety company, which again ties up cash dollar for dollar. Sureties often require letters of credit to back up bonds, particularly oil & gas bonds. If a firm is lucky enough or strong enough to even have a line of credit from a bank, every dollar of credit tied up can't be used to keep the business going. Surety Bonds are Credit Bonds are credit. Financial guarantee bonds such as oil plugging, reclamation and lease bonds are tougher to get than bank credit. Since most people understand a bank loan being credit, the following chart comparing surety credit to bank credit could be very useful in explaining to the commission why the bonds (especially non-cancelable oil & gas bonds) are so tough to get: Bank Credit Surety Credit Revocable Irrevocable Cost 10% to 20% Cost 1% Foreclose for non-payment Non-cancelable, even if premium not paid Secured Unsecured Release from debt once paid May never receive a complete release IMA 940339 Non-cancelable nature of oil & gas bonds To the surety industry, it is not the amount of security that matters as much as the long term and non-cancelable nature of these bonds. To cancel liability, the sureties need an unconditional release from the obligee (City, County, Lessee, etc.) The problem here is that the obligees will not give an unconditional release. A recent event that may also be effective in demonstrating this problem is the sale of the Travelers bond company. In their efforts to sell the company, Travelers could not sell the oil & gas liability. In fact the regulators required Travelers to carry a large liability to cover the potential for claims on those bonds (even those for companies that had stopped payment of premiums years ago). The liability just doesn't go away, and there is no certain way to have liability "drop dead". This poses a double problem when letters of credit are taken to support the bond and the surety will not release the LOC because the bonds are not unconditionally released. Even on bonds with a cancellation provision, the surety remains liable for acts committed by the principal prior to cancellation. Long Term nature of bonds It is entirely feasible that a plugging or lease bond will be in effect for ten to twenty years. Interestingly, the sureties that took letters of credit to support bonds have found that not only have the companies they bonded disappeared, but the banks providing the LOCs are not around either. $500,000 Weld County Proposed Requirements The State of Colorado Oil & Gas Conservation Commission currently requires a $30,000 blanket bond. The State Board of Land Commissioners currently requires a $25,000 blanket bond for wells drilled on state owned minerals. As to the proposed $500,000 bond amount, it is important to note the following: • Current levels of bonding at the state level have proven to be more than adequate over decades of experience. Per every dollar of current bond requirement, less than one penny is being called on. IMA 9 10339 There are pending COGCC regulations substantially expanding this bond coverage. • According to Robert Morris Annual Financial Surveys, a typical oil & gas company would need $12.5 million in assets to be in a position to post this required level of security and that would assume it freezes its entire working capital. • The Federal Government, through the BLM, requires a Nationwide Blanket Bond of $100,000, which is only one-fifth of the proposed Weld County bond. This $100,000 bond covers all wells of a company throughout the entire country. Posting Surety Bonds As discussed above, surety bond companies primarily consider working capital in underwriting bonds. Sureties see cash as staying power in the oil & gas business as obligations need to be met when oil prices and production are low. Bond companies are regulated and can only offer bonds up to a certain limit based on their own equity or surplus. Increasing demands on the bond market may take these bonds outside the capacity of the smaller "substandard" surety markets. This would have the effect of further shrinking supply of surety companies in this market, making these bonds even tougher to get. Overall, oil & gas plugging bonds, reclamation bonds, and lease bonds are already very difficult to come by. There are pockets of companies writing some of these bonds, but in most cases, these bonds are only available from a broker with a large amount of insurance and surety business who is able to thereby induce a surety to provide oil & gas bonds. Conclusions Given the above factors, I believe that the proposed financial assurance requirements in Weld County are not reasonable. Surety Association of America's published results show that less than one penny per dollar of bond requirement for oil & gas bonds is actually being called on, both nationally and in Colorado. Sincerely, IMA ..7 39 999 t8ih Street,Suite I Boo M INSU A I NSti MEC T Denver,Colorado 80202 N z l;o Li ASSOCIATES h00 293-8888 FAX "31 "93-86I$ INCIlk AFFILIATIONS: A95urex, lnter9ure April 1, 1994 John F. Welborn, Esq. Welborn Sullivan Meck & Tooley, P . C. 1700 Broadway, Suite 1820 Denver, Colorado 80290-1801 Re : Insurance Regulations Contained in Proposed Weld County Oil and Gas Regulations Draft Dated March 3 , 1994 Dear Mr. Welborn: I will first respond to the two issues in Section 120 . 2 Insurance which are of greatest concern to me, one being the requirements that the operator insure for "all claims or causes of action made against the operator" and the second requirement that "environmental damage shall not be exempted" from this coverage . My concern is that these coverages, as described, are not currently available and probably never will be available from the insurance markets . There is no liability policy available in the world markets that covers "all claims or causes of action" . This terminology is simply too broad. Liability policies typically contain an insuring agreement that states the insured will be covered for bodily injury and property damage for which they are legally liable, subject always to the policy' s terms , conditions and exclusions . Coverage for "environmental damage" relating back to "all claims and causes of action" is not available in the world market for operators in the continental U. S . Pollution legal liability coverage is not available from most standard, domestic insurance companies or foreign markets and when available is found only on a restrictive "Sudden and Accidental Occurrence" basis and subject to numerous conditions , limitations and exclusions . Because each pollution coverage endorsement in the market has different terms, it would be impossible to make a blanket statement about the coverage that is available . Operators can also not guarantee that they will be insurable by a certain insurance carrier because this depends on that operator' s exposures, geographic mix of properties and other criteria . To provide some historical perspective, pollution liability coverage has gone through various expansions and contractions in the market over the past couple decades . Most standard carriers provide little or no pollution protection, and include what is termed an "absolute pollution exclusion" . No one can predict how long the current limited Sudden and Accidental Pollution coverage will be available in the market as the legislative and regulatory 3'10119 John F. Welborn, Esq. April 1, 1994 Page 2 environment continues to change . It would be unfair and unrealistic to require an operator to purchase coverage that is simply not available in a market over which the buyer of insurance has no control . I would also note problems in three other statements in the 120 . 2 Insurance provision as follows : 1 . The request to attach and submit a copy of the insurance policy with the operator' s application is unrealistic and would create an administrative nightmare for all involved. This stems from the fact that once coverage is bound at the annual renewal, the actual policy issuance can take from 1 to 12 months . 2 . The requirement that the operator use "a company with the highest available rating from a nationally recognized rating service" is also unrealistic and would in fact severely limit the market . There are only 2 or 3 domestic carriers with the highest rating that write oil and gas business . This requirement would hinder operators from accessing some very good, strong markets which in the future could be the only markets that offer any pollution coverage . 3 . The request to name the surface owner as an "additional named insured" under the policy creates the status of a policy- holder with its incumbent duties and responsibilities, the extent of which the surface owners may not fully understand. These duties and responsibilities include the duty to report claims in a timely manner and cooperate fully with the insurance company in the defense of claims, which could include any claims against the operator and other insureds under the policy. The duty includes not taking any actions that could prejudice claims, as well as taking appropriate actions to mitigate losses that have occurred. Finally, these responsibilities could also extend to the payment of earned, but unpaid premiums . If it is one of the surface owner' s intentions to potentially claim against the policy in the future in the event of a loss, then the status as an additional named insured could even preclude them from doing so depending on the exclusions under the particular policy. In summary, I do not believe that the status of additional named insured accomplishes the purpose the surface owners are seeking. Sincerely, Theresa Fadul IMA FLANDERS, SONNESYN & STOVER ATTORNEYS AT LAW DAVID N.SONNESYN FIRST NATIONAL BANK BUILDING OF COUNSEL JOHN C.FLANDERS 401 MAIN STREET. ' l L.B.FLANDERS THOMAS L.STOVER ." .HATTIE HANCOCK LONGMONT, COLORADO SOS 01 C PETER M. REINHARDT _ ESTABLISHED 1871 (303) 776-5380 KATHLEEN A. ELLIS METRO 440-0638 FAX (303)629-0530 March 30, 1994 Mr. George Baxter Mr. Dale Hall Ms. Connie Harbert Ms. Barbara Kirkmeyer Mr. Bill Webster Weld County Commissioners Weld County Court House P. O. Box 758 Greeley, CO 80632 Re: Objection to Weld County Oil and Gas Regulations Our File No. 6195. 01 Dear Commissioners: We represent Milton H. Nelson. Mr. Nelson has contacted us regarding proposed Weld County Oil and Gas Regulations. He is concerned that these regulations present an unreasonable and unnecessary burden on the production of oil and gas in Weld County. Mr. Nelson is very reliant on the income which he receives from oil and gas production in Weld County. The passage of any regulations which would impact his right to receive that income would work a severe hardship on him. In addition to the personal impact on Mr. Nelson, it does not make sense from an economic perspective for the County to pass such burdensome regulations. The oil and gas industry provides a significant benefit to the county's economy. These regulations will adversely affect the economic health of Weld County. The oil and gas industry is a major contributor to the County's property tax base. If this base is destroyed or significantly reduced, revenues will need to be made up elsewhere to maintain County services. These additional taxes will impact other business owners as well as residential and agricultural landowners. It is Mr. Nelson's understanding that these regulations duplicate efforts made by the Colorado Oil and Gas Association to alleviate problems. The problems Weld County is attempting to address are being responded to in other forums, specifically, the State Legislature, the Department of Natural Resources of the State of Colorado, 'and the Oil and Gas Conservation Commission. f 940333 Mr. George Baxter Mr. Dale Hall Ms. Connie Harbert Ms. Barbara Kirkmeyer Mr. Bill Webster Weld County Commissioners March 30, 19994 Page Two In conclusion, these proposed regulations duplicate other efforts and represent unnecessary, unworkable, and onerous impediments to the production of oil and gas in Weld County. Yours very truly, �— j 2 / Thomas L. Stover TLS: sp 940339 April 1, 1994 The Weld County Commissioners: '• . ' ' ) It has been brought to our attention thatThere !ie :a proposed amendment to the "field County oil and gas regulations. '•1e feel ths is not rin t since the :it Lte oil and gas commission is alread- doing this job. Further more this would cause the curtailment of our income off these wells. Income T,:hich we need very much being retired and health problems. As we nee it this income is be .ng ppent in '.-veld ;,4e; economy here in field County. e would urge you not to adept the proposed amendent. C'luv. 0,2„ `it;. lr- _ L� y G rc'_ ( 4e :_ n �, yJ- 30 march 1994 ariC � �� _. z / i7,)µ WELD COUNTY COMMISSIONERS lz WELD COUNTY COURT HOUSE P .O. BOX 758 GREELEY, CO 80632 SUBJECT : WELD COUNTY ZONING ORDINANCE & BLDG CODE AMENDMENTS .3-3-94 IT APPEARS THAT THE SUBJECT AMENDMENTS IF ADOPTED BY YOU, COULD CURTAIL PROPOSED PRODUCTION AND TRANSPORTATION OF PRODUCT WITHOUT THE STAFF , RE- SOURCES OR KNOWLEDGE TO HANDLE THE WORK AND THAT THESE AMENDMENTS WERE PROPOSED WITHOUT INPUT FROM INDUSTRY ITSELF . THE PROPOSED REGULATIONS SEEM TO DUPLICATE AND EXCEED COLORADO OIL & GAS COMMISSION REGULATIONS AND ATTEMPT TO CONTROL EVERY PHASE OF OIL AND GAS DEVELOPMENT IN WELD COUNTY. ADDING ADDITIONAL GOVERNMENT REGULATIONS WOULD SERIOUSLY IMPEDE IN- DUSTRIES EFFORTS TO PROFITABLY PRODUCE OIL AND GAS AND CURTAIL FURTHER DEVELOPMENT AND COULD LEAD TO FURTHER LITIGATION AND TREMENDOUS COSTS TO ALL. IF REFORMS ARE NECESSARY, ALL INDUSTRY SHOULD NOT BE SHUT OUT . HOW THEF MATELY INDUSTRY REPLACED? MY PARENTS CONTRIBUTED A TREMENDOUS AMOUNT TO THE WELD COUNTY COMMUNITY FOR NEARLY 70 YEARS AND RETAINED MINERAL RIGHTS TO THEIR PROPERTIES , WHICH RIGHTS WERE PASSED BY WILL UNDER THE LAW TO ME AND ELEVEN BROTHERS AND SISTERS . THE ECONOMIC IMPACT TO US IF SUBJECT AMENDMENTS PASS TO HALT ALL OIL AND GAS ACTIVITY IN WELD COUNTY WILL SERIOUSLY JEOPARDIZE OUR ROYALTY INCOME AND RIGHTS . THIS WOULD STOP CONSERVATION, SEVERANCE AND AD VALOREM TAXES WE NOW PAY COLORADO , REGARDLESS OF STATE OF RESI- DENCE . WE HAVE THE RIGHT TO THE LEGACY OUR PARENTS WORKED YEARS TO PASS ON TO US . THE SURFACE OWNERS KNEW THEY DIDN ' T HAVE MINERAL RIGHTS WHEN THEY BOUGHT THEIR LAND. THE SELF-POLICING CODE OF CONDUCT DRAWN BY THE MEMBERS OF CO OIL & GAS ASSN INDICATES A STRONG CONCERN FOR ALL FACETS OF DEVELOPMENT OF NATURAL GAS AND OIL RESOURCES IN A REASONABLE AND RESPONSIBLE MANNER. I VEHEMENTLY OPPOSE PASSAGE OF SUBJECT AMENDMENTS AND BELIEVE THAT INPUT FROM ROYALTY OWNERS , INDUSTRY AND THE STATE COMMISSION IS ABSOLUTELY REQUIRED. SINCERELY 1/1-1, YOURS/2 K�La t HELEN LORENZ PETERSEN 695 SO ALTON WAY #10-A DENVER, CO 80231 303-366-0610 Cc : PL, , 't; dA; 940339 ' ,,k • 199 -MO wc... C7 . J &/ W t(iefrt„tiiA Lm 44:er , n, c61 ti y oCaS r2-,-✓,' o bo pp kl.ePeQ dra eo<Mif- Ile PC 7? &' eta a g'c63.. AAA lake," o-n_g0P ✓; wiz ems. " „c LA ftreal 1urQJtety' yt £Pw CV 42 - .a ti 1)2)2Oint,41, 2- 164 7 Glaris- of tL C1-4-tad CL4J -ft, ° u 2, . tyN•�� LnC�ctALLlA_ ^-() -4.4L“, /^ti' ra L.O-✓V l-(.1--(lnvtv .a.a-a1 a ti� -I Lea Ate` c--,-, c a aLc-ei`i""' jai/ � .tr2 . p-'zr;p L. t J Ce.c ��xe .440.„</- Le, t �c U U �.� Q.a e a citLP v n v /tomLko J (1' GU tcS �ei.-,..�(i Q'.e,S k-F) 46?-2) -to ..Qcad�• a 0 l.v..IL carat, 4.;n / -n.e.q,- , U , 0,,v4 ./tezt crn �w-. lZf- -a z.ce_a� 71_ d2 Ci, l',( I.Li7K.a/ tia.Z, c ...Li.:lJ e g �a1 0YL a 121e n-(- -' yklert,, �ft-•.vU �i� /1 a.. HOC ,t4a-t 4:4-/ a Qa . �N4i //�� ry C t btLei l.0-- �. -( i1 �u / / h/-4 i 3 ', ,/ 2 c' L� i 6', -CZc/YI-mil, C 41O14L.l2. C./ ( 1 /.. � ; c /--may . � ..2 c' , _ 6zc.,,Le_Ai Ry V ,7c-' * xø —& -)Si-e- At `Z�-�-Z� Le- _Z% le .J�'-ate _ac___ j� ,;' J A/4.- c Z ii e-et� i 6: 2-4/14-4. l /1 i-4. -4 thin. /72-7)( <664f- \ 7,,/.5,2,a_ 6-tj te-C CJC -cPa2--2.-e_E c/ �ZrL v 4tit tip" ` ' (>7 7 3 9 ei6 t-zyW 2iti4t, dr. -: ��-ccit•S / (�C c��Ye.er) ?0` Q 2 g 8 ° :""r,'' -) C-D • March 33, 1994 RE: Weld County Oil and Gas Regulations • To Weld County Commissioners: Letters have been mailed out by LOCO. Prima and Basin oil all of which I feel are coercion in nature. I feel the intent of these letters is to imply that if I don't put pressure on my elected officials these large companies will l stop royality payments and/or shut wells in . As a landowner, royality recipient and taxpayer of Weld County I wish to state CONTRARY to the wishes of the oil and gas companies that I indeed support you i0_► in your action reguarding 'Weld County Oil and Gas Regulations LITLP 3/3/94." I feel it is due time that the drillers and oil companies • pay for the. actual damages they are causing . These damages include tax supported roads , structures and private • property in Weld County. Thus, I encourage you to take action, now. • I Remain , /qz3 L34- : Ge; /-&.; ' 464v 339 WCL Partnership 4612 S. Schafer Br. Rd. . Spokane WA 99206 March 30, 1994 . Weld County Commissioners Weld County Courthouse P. O. Box 758 Greeley CO 80632 Dear Commissioners Baxter, Hall, Harbert, Kirkmeyer, and Webster: The members of WCL Partnership strongly object to the proposed Weld County Oil and Gas Regulations. Our family partnership owns farmland in Weld County, east of LaSalle. This small farm has been in our family four generations. All the members of this family were raised in Weld County and we sincerely care about the area. Oil and gas producing wells have existed on our land since the early 1980's. The royalty income from these wells allows us to operate this farm and make improvements on the land rather than be forced to sell to outside interests or cease farming altogether. The drilling, production, and transportation have had little impact on our acreage. The companies involved have always restored the areas surrounding the wells to original or better condition. Producers and royalty owners have worked successfully in partnership with Weld County, contributing to a broad tax base and improving the business climate. The proposed regulations can only result in curtailing production or shutting in wells, ultimately drying up this important tax revenue for the citizens of Weld County. We ask that you not adopt the proposed regulations. Sincerely, Lyndall L Cook, Partner WCL Partnership Mike Lehan MaryAnn Wilharm Mark Lehan Lauri Angus Stephen Lehan CG- Gam ' NL� '9 40339 easiori ji - a e_6y,p -'rP -- --&- a c c C© O ? it it-ate` , ,_ th - __.. e.J_ C 6i_ r- - , age 940339 Harold D.Hansen R 1 Box 840 Perry,Florida 32347 Tel 904-584-653i )r4 -1 S/ y47 //da-GC e-aYrlirrurdact;rt A-ate 80632_ )12y /r2_-‘1nz Na_ h-a-ece , N c 4;2 • r_Az. 3/1819 -JA-124 orref-• tfretiLL, 6/ (PA,` PG; /-/L• ei a -940339 acc4Z„, S. Ole (t-44} �LcLu.eP ® '�t -�-a �c Abe S CO/ e, r Cat y A..").7Q.G -, 07 ceec-0( -thee / coo ipc.4.2 clay 4-e dei-1-,57a.deda- erch-cce. -(/--c<1/29 Oifi s. d '940339 G - ,.tL, l 96o 's .e � � - —e — .S-E. -0-J ,,t 4_ o—$_, etr. , tt � / ' s: 44, --/Aecac_ a_.„&trx ,etcreA (,A- At-c42. , G� d�c,c 2✓ �� 94C339 T �D - &__ ctigiztlee - �%v --ttS oI!i nac zfrdy cW.,,..zee it/ 114z oG o Q. 17L/-'Vs En/ 94®33,99 7ai4 �r :I-cittLGr / CO S-0/.20 uJ eta' Cat , ' Pow 7s a' �tjuzeut Co gO63 -a. Le,o.Q f 9n�.. fr-olterazet-. ° ARereaL& We di-e g .iJ f Su& 7 C0eSeto VC/ avit ,f1d esflcn.t.4a_ bm--, . ft/Mit , X.l.e r �C2a..E� / iii z� ✓✓e-z ,a t.a-e-c,e- - , ! ayS omit felt�i2tL.. ere 6.O1,O1 „Lielf-t- . w< ,,Aa Sa zr , d - galk- 2�1.1-rwvr.Z Adernattly ec-: Psi ffL ; Ptt gorc-- r ' C339 4 PIN: R 4850986 DETACH FOR YOUR RECORDS PARCEL NUMBER TAX DISTRICT. r ^•OUNTY OF WELD,STATE OF COLORADO 1993 TO"NOTICE 12.1109000007 TAX AUTHORITY LE TAX DUE DATES MELD COUNTY 22.457 45. 14 General property taxes ere due and payable January 1 of each year. SCHOOL DIST RE1 35.744 71 .84 FIRST HALF - Delinquent MARCHI SECOND HALF - Delinquent JUNE 16 NCH MATER 1.000 2.01 FULL AMOUNT - Delinquent MAY 1' ICGM 1.071 2.15 * ** SEE INTEREST CHART ON REVERSE SIDE* ` CCS 1.734 3.49 I5 PLATTEVILLE 2.800 5.63 IF LOAN COMPANY IS RESPONSIBLE FOR THIS AIMS JUNIOR COL 6.322 12.71 TAX. RETAIN THIS BILL FOR YOUR FILES• WELD LIBRARY 1.500 3.01 thelert i rte Pa+a 583°I az g t (o I fil litt li 6csoseen 1) 72.628 145.98 I Tax Payer Copies IMPORTANT SEE REVERSE SIDE _ .1 ^�--PIN: R 4851786 DETACH FOR YOUR RECORDS PARCEL NUMBER TAX DISTRICT: . • COUNTY OF WELD,STATE OF COLORADO 1993 TAX NOTICE 121 11 000001 1 TAX AUTHORITY LEVY TAX DUE DATES MELD COUNTY 22.457 123.74 General property taxes are due and payable January l of each year. SCHOOL DIST RE1 35.744 196.95 FIRST HALF - Delinquent MARCHI SECOND HALF • Delinquent JUNE 16 I. CC el 1.071 5.90 FULL AMOUNT - Delinquent MAY 1 t PLATTEVILLE 2.800 15.43 ** *SEE INTEREST CHART ON REVERSE SIDE" ' 1 AIMS JUNIOR COL 6.322 34.83 " WELD LIBRARY 1.500 8.27 IF LOAN COMPANY IS RESPONSIBLE FOR THIS TAXI RETAIN THIS BILL FOR YOUR FILES. ,1 OD? RA 44231..07 Caal- 3" 3.37 I/18h A, SNP ?.C& 361.05 1O • I/1l kt +;441 10 69.894 385.12 ' Tax Payer Copies IMPORTANT SEE REVERSE-91° . JAY NUMBER �,A330000p01 �H u XX3 X NpT1GEDUEI�•'(�S :::::::: r Me $aO 09 —STATE OFGGl-Onori qy OF WS-D,gbGOON Canard D nt MARCH 1p.ttnq •ntMAT HI5 Kg561l9;B2FIRST HALF ' Oeli1W FULLSI WhRQON REV5 YlatQ R OR LS 5. utH•.tTY 22.4 31 •95 .• • see1..-ce SP FOa F pUN5T R£1 3 t 07 r 5 63 tf LOAN acts in BILL OI 2.80 1 •;4 1A11• RE LE 6.32 -twit" wi tORY COL 1.5suoin0 14IDRA/t 94033r, The columbine la the elate flower of Colorado. It grown in abundance in the rocky mountain country. � �� post card lPhoto by gill Blackmy�Vail2 ‘...tl. :.'1°339 ' L ° ,3 �/ / Y 1/ ... ...j E��.�.. L/ O o , ��•6. am+ �c H c /I I l f L / j., y / •442 .. _r .. y ' / t / y / /Via`/ L�2 ,/-1 L� / i� '�/ o , 940339 - Manch 29 , 1994 1308 S. Lyenty St. Chattanooga, TN 37404 Weld County Comm-i44.ionen4 Weld County Po.t 044ice P. 0. Box 758 Gneeley, Cotoxado RE: Pnopo4ed Zoning and Buitd.ing Code Amendment4 Dean Commi44ione44: It hao come to my attention you plan new negulat.ion4 on the ga4 and o.il pxoduction which will 4evenely Limit m-inexal night holden4 4nom getting noyalt.ie4. I w.i-oh to pnote4t the .i.mpo4.it.ion o4 .ouch nule4! My n.ight4 date back, to 1870 when my Gnandfathen, John Moulton Goodwin Wadl-in, came to Colonado. He wa4 one o4 the on.iginal p.ioneen4 to 4onm the Union Colony o4 Gneeley, Colonado. My gnand4athex came 4nom Maine and he wa4 the pen4on who .introduced the growing o4 potatoe4 to the Gneetey area. Moot o4 the acreage that he owned A.4 4till owned by memben4 o4 our 4am.ily .. Pleaae protect u4 old t.imen4 by not changing your nule4. Yooun. tnuly , 71`a ` Many I . 4.4Btak.e. Many Wadl.in Goetzel h Pit; ffC� 649 i eorrJ-5- 94Oa3 9 P419 E. Richert FresnO, Ca 93726 March 28, 1954 veld county Cotflssoner 'Feld county Court vouse '. 0. Pox 758, Greeley, CO 80632 mo The Fonorable Commissioners George Baxter, Dale Hall, Connie Herbert, Barbara Kirkmeyer , Bill Webster Re : Township No. 3 North Range 67 West 6th p. m. Weld County Colorado. Kurtz Well No. 1 and Berry Well No. 1 . Dear Sirs: I am Paul E. Sanford age 84 and my wife Ezelle H. Sanford age 80. "e have been receiving royalities from the Kurtz No. 1 well and the Perry No. 1 well in the above location of Weld County. • We have been advised of the proposed admendments to its County ordinance and building code. These "Weld County Gas and Oil regulations" (D. m. D 3- 3- 94 ) Are what I wish to object to. Let me tell you why. We use to get a pretty good royalty, not enough to make us rich but it sure did help out. Then as I understand it due to the demands of the Oklahoma Pipe Line our production was drasticaly curtailed so that our annual royalty from the two wells run about $2400 to $30oo. row to shut that off would really work a hardship on us . Our monthly income gets pretty low by the 25 of the month so the royalty we re- ceive really does help. We live very modestly and try to spend our money wisely. I imagine that most of the Royalty holders need the money as much as we do. In the past 5 years I have had 5 major surgeries and 35 radiation treatments which were mostly paid by Insurance . There is still a lot of medicine; I have to purchase and it is very expensive . ''y wife are not able to go out and work so we depend on our Royalty money as part of our needs . '"hen to think of all the money spent in develpping the wells and 940339 the pipelines to carry the gas and oil. All that would deteriate if not used. A lot of people would be hurt financially. Weld County would lose a lot of taxes which would have to be made up some other way. Seems to me the best thing to dowould be to allow and encourage such companies as the Basin Operating Co. not onll to open up those wells and let them show more profit but also to bring in other wells on this property as well as other people ' s property. most of us are old and I consider it unfair not to let us get all of the royalty we are entitled to in our sunset years . It also would help Weld bounty in increased taxes . I beg you, "your nonor" do not adopt this amendment. I am sure that the Basin Operating Co. will make you glad if you help us and not hurt us. Yours truly, eyyv) -)1/fria eaAd q. -1;19k 34339 • MR. BILL WEBSTER WELD CO. COLO. COMMISSIONER WELD CO. COURTHOUSE BOX 758 GREELEY, COLORADO 80632 WE ARE WRITING IN REGARD TO YOUR PROPOSED AMENDMENTS TO THE COUNTY ZONING ORDINANCE AND BUILDING CODE. "WELD CO. OIL& GAS REGULATION" (DTD 3/3/94) IF THIS REGULATION IS ADOPTED BY THE WELD CO. COMMISSIONERS, TT WILL SEVERELY JEOPARDIZE OUR PERSONAL INCOME FROM THE REVENUES OF THIS PRODUCTION. HAVING A SMALL WORKING INTEREST IN 16 WELLS, WHICH WE HAVE FINANCED, WE ARE WRY INTERESTED IN DEFEATING THE PROPOSED (DTD 3/3/94) IF YOUR NEW REGULATIONS SHUT DOWN DRILLING AND PRODUCTION, IT WOULD BANKRUPT US, ALONG WITH MANY OTHERS AND MAKE OUR INTEREST IN THE FIELD WORTHLESS. WE WOULD THINK THAT THE INCOME TO WELD COUNTY FROM THESE WELLS WOULD BE A GREAT ASSET RATHER THAN HAVING TO BURDEN THE PUBLIC WITH HIGHER TAXES TO OFFSET INCOME FROM THE WELLS IN WELD COUNTY. WE WOULD THINK YOU WOULD WELCOME THE OIL AND GAS INDUSTRY WITHOUT A BURDENSOME PROPOSAL THAT YOU ARE TRYING TO ENFORCE INTO LAW. THE OIL AND GAS INDUSTRY IS TAKING A SEVERE BEATING NATION WIDE. WE ARE PRESENTLY IMPORTING OVER 50%OF OUR OIL FROM FOREIGN COUNTRIES. THESE DOLLARS THAT LEAVE THIS COUNTRY WILL NEVER COME BACK. IT'S NO WONDER OUR NATIONAL DEBT IS OUT OF CONTROL. WE NEED THE SUPPORT OF LOCAL AND STATE POLITICIANS TO SUPPORT THE DRILLING AND PRODUCTION IN THE UNITED STATES. THERE ARE OVER 750,000 JOBS THAT COULD BE GENERATED IF WE COULD GET THE DRILLING AND PRODUCTION BACK TO NORMAL IN OUR COUNTRY. THIS ALONE WOULD REALLY BOOST OUR ECONOMY AND ESPECIALLY OUR TAX BASE IN RURAL AREAS, SUCH AS WELD COUNT. WE STRONGLY BELIEVE IN THE KISS METHOD, (KEEP IT SIMPLE) . WE CANNOT AFFORD FOR ANY OF YOU COMMISSIONERS TO VOTE IN FAVOR OF THIS GAS REGULATION(DTD 3/3/94) LC.' PGA u t; M t6CG('1) 943339 YOUR REGULATIONS IF PASSED WOULD CURTAIL PRODUCTION AND TRANSPORTATION OF OUR PRODUCTS. YOU WTI FORCE WELLS TO BE SHUT IN AND SEVERELY HAMPER ANY FURTHER DRILLING. YOUR PROPOSED REGULATION WILL REQUIRE SPECIAL PERMITS FOR ALL ACTIVITIES AND DELAY ISSUANCE OF PERMITS BY 6 TO 8 MONTHS. IT WOULD BE A SEVERE FINANCIAL BURDEN TO THE DRILLING AND PRODUCTION COSTS AND UNECONOMICAL FOR SMALL INDEPENDENTS TO CONTINUE OPERATIONS IN YOUR COUNTY. WE HAVE A CONSIDERABLE INVESTMENT AND ROYALTIES ON MINERALS NOT YET DRILLED WHICH WILL BE LOST BECAUSE INDEPENDENTS CANNOT AFFORD TO BE BURDENED WITH ALL OF THE REGULATIONS YOU ARE TRYING TO IMPOSE ON THE OIL AND GAS INDUSTRY. PLEASE RECONSIDER THESE REGULATIONS AND STRONGLY DEFEAT THE PROPOSED "WELD CO. OIL& GAS REGULATION "(DTD 3/3/94) THANK YOU. PE TFULLY 7:21b71 RT J. El /STEvE SO 94C339 Marjorie Schwed, Trustee The Walter E. Schwed Trust of 1981 P.O. Box 3564 Incline Village, NV 89450 March 28, 1994 Mr. Bill Webster: Weld County Commissioner Weld County Courthouse P.O. Box 758 Greeley, CO 80632 Dear Mr. Webster: I strongly oppose proposed oil and gas regulations. Most of the income of the above Trust is from oil and gas interests in Weld County. If this income were to be decreased, it would work a great hardship, particularly on me. My only income is from the Trust and from my Social Security. While the Trust interests are small, they do pay my house payment and food. It would seem to me that the oil and gas industry is of major importance to Weld County, and if the property tax income from the industry were curtailed, the taxes would have to be increased someplace else. Please do not pass these proposed regulations. Since y, / Marjorie Schwed, Trustee The Walter E. Schwed Trust of 1981 �,C' ` /°Gi /AL Og,' � r(5 p) 940339 $ 260 County Road 221 Durango, CO 81301 March 29, 1994 Mr. Bill Webster Weld County Commissioner -" Court House p.O.Box 758 Greeley, CO 80632 Dear Sir, It has come to my attention that you as a County Commissioner are proposing a county ordinance and building code on the natural gas and oil industry in Weld County. As one of twelve in a family of royalty owners, I strongly object to any new regulations where another bureaucratic agency is formed to further restrain our rights. The mineral rights were maintained by a family who worked hard and faithfully paid their taxes for over 65 years in Weld County. I might also point out that Weld County will see their tax base diminish by $30,000,000.00, dollars which will be made up in higher taxes paid for elsewhere, to maintain existing county services. Therefore, I feel you need to reconsider the "Weld County Oil and Gas Regulations", as it looks like you in Weld County will be the biggest losers. Yours very truly, Alice Lorenz Cc : /PG; Nz-, &*; "kir Cfie . 940339 Selden C . & Virginia M.Hall 333 Mt. View #108 Talent , Oregon 97540 Weld County Commissioners , Court House Greeley, Colorado , 80632 As former property owners and tax payers and resident of Weld County, and present owners of some mineral rights within the County, we depend upon income from said rights for part of our living expences . We ask and hope Weld County will not take any action or pass any amendment to the present rules and regulations that would in anyway effect production or reduce our income from these investments . We are in our 80's and every little bit helps . Yours truly , c / Selden C . Hall ZG(, 9( .,��r Virginia M. Hall Copies to : George Baxter Dales Hall Connie Harbert Barbara Kirkmeyer Bill Webester 940339 A � CORPORATION 215 Union Blvd.,Suite 450,Lakewood,Colorado 80228•(303)989-1470 March 25, 1994 — Bill Webster WELD COUNTY CO. EWISSIOWER Weld County Courthouse P. O. Box 758 Greeley, CO 80632 RE: Weld County Oil and Gas Regulations Dear Mr. Webster: As a royalty owner in Weld County we have been made aware of, and strongly object to. the newly proposed amendments to the county zoning ordinance and building codes. These Weld County Oil and Gas Regulations dated March 3, 1994, if adopted by the county commissioners will jeopardize our income and that of the natural gas and oil industry. These regulations will curtail proposed production and transportation of product and may force wells to be shut in. The impact on future drilling is severe. The ending result will be an indefinite delay and reduction in oil and gas activity plus a severe financial burden to the already high costs of drilling. We urge you to recograze the importance of the oil and gas industry's economic impact on Weld County and the businesses therein. Sincerely, A4a24° .• Stephen B. Evans mh • y 940339 ' 1834 Sun Maintain Dr. Santa Fe,NM 87505 March 29,1994 Bill Webster, Commissioner Weld County Courthouse, P. O.Box 758 Greeley,Colorado 80632 Dear Commissioner: I am writing this letter as a royalty recipient from SOCO, Snyder Gas Marketing,Inc. I am concerned about proposed regulations by Weld County that would add layers of government regulation. I am opposed to the proposed amendments. My late father retained mineral and gas ri when he sold his Weld Coun . He wished his son and daughter to have help with their security for retirement and tins for family members. Please vote against these proposed regulations. �4e9 truly y n��Ruth h rr de .- PL; f z - e ; b° QS e ' _ r/ March 31, 1994 Weld County Commissioners: Mr. Bill Webster, Chairman Mr. George Baxter Mr. Dale Hall Ms. Connie Harbert Ms. Barbara Kirkmeyer Weld County Court House P.O. Box 758 Greeley, CO 80632 Dear Commissioners: On behalf of the Colorado Oil & Gas Association ("COGA") and its 250 member companies, I am writing to address our concerns about the March 3, 1994, Draft Weld County Oil & Gas Regulations. COGA is the industry association that represents nearly all of the oil and gas companies with interests in Weld County. As such, we are very concerned about the general tone and the specifics of the proposed regulations. In brief, we believe that the proposed regulations would establish a system that is entirely unworkable and would have the effect of shutting down our industry in Weld County. Among other things, the regulations would establish a permitting system that would duplicate the efforts of the Colorado Oil and Gas Conservation Commission ("the Commission") but without the Commission's staff, resources or expertise. In view of the volume of oil and gas activity in Weld County, and the breadth of the proposed permitting requirements (e.g., permits would be required for every rework, equipment change, flowline installation or other minor, routine activity in addition to the drilling and recompletion activities already subject to Commission permitting authority), it would be impossible for the County to administer such a system in a timely, cost effective and efficient manner. In addition, many of the specific operational requirements would impose onerous, impractical, and unfair limitations or costs that are not borne by other industries operating in the county (e.g., requirements for continual soil and groundwater sampling, which are not imposed on agricultural operations having even greater potential to affect those resources than oil and gas operations). Aside from the infringing upon the Commission's authority, these regulations also duplicate those of numerous other Federal and State agencies, such as the EPA, DOT and Colorado Department of Health. Colorado Oil & Gas Association P.O. Box 3236, Denver, Colorado 80201 =333 Weld County Commissioners March 31, 1994 Page Two We are not certain what your objectives are in proposing such an extreme and far- reaching program. We have not yet had the opportunity to have any input into this process, even though we are obviously the parties most affected. We are willing, as we have been, to discuss with you how best to address concerns with the oil and gas activity in the County. The implementation of these regulations, as written, would have negative implications not just on our industry, but on every facet of Weld County and its citizens. Our industry's contribution to the economic stability of this community is substantial! Let us examine some of the figures: • The oil and gas industry is one of the main economic engines of this community. Its ad valorem taxes alone accounted for approximately 22% of total county revenues collected in 1992. • The majority of these property tax dollars are collected for Weld County school districts. If these regulations are adopted causing oil and gas operations to stop, one in four Weld County schools would have to close or each Weld County school would have to cut its budget by one fourth. • Over $17 million dollars in ad valorem tax was paid to Weld County by oil and gas operations in 1992. This was the amount accrued from 1990 operations. Put another way, the tax burden paid by the industry has effectively reduced the tax burden for every Weld County citizen by $123 per year. The increased activity during 1991-1993 has generated even greater ad valorem tax revenues to be paid by the industry in 1993-1994, effectively increasing the tax benefit for every citizen in Weld County. • Also in 1992, the extraction portion of the industry (excluding gathering, transportation, distribution, etc.) had 738 Weld County direct employees earning an average annual wage of $31,874. That translates into a Weld County payroll base of $23.5 million per year. The preceding numbers, taken from the COGA industry report (At the Threshold of Change) published at the end of 1993, are from State of Colorado published sources. A review of the records of just seven of our member companies (Amoco, Basin, HS Resources (Elk), KN, Prima Oil & Gas, ANGI, and Snyder Oil Corp.) reflects the following: Colorado Oil & Gas Association P.O. Box 3236, Denver, Colorado 60201 940333 Weld County Commissioners March 31, 1994 Page Three /' • They employ over 500 Weld County workers. The payroll for these employees in Weld County alone was over $14.8 million dollars last year. • They made capital expenditures of $194 million in Weld County in 1993. Of this amount, $168.8 million was paid to subcontractors in Weld County. • The combined amount (Weld County capital plus payroll) represents $200 million contributed into the Weld County economy last year. At this rate, in two years (93-94) the oil and gas industry will have invested capital in Weld County equivalent to 20% of the cost of the entire Denver International Airport, the largest capital improvement project in the United States of America. This should put into perspective the size and importance of our contribution to Weld County. The economic ripple or multiplier effect makes the overall financial impact of those expenditures even more dramatic. • Royalty payments on Weld County leases was over $20 million in 1993 and is forecasted to be over $34 million in 1994. Clearly, our industry plays an exceedingly important role in the Weld County community. However, as we interpret the draft, these regulations, if passed, will severely curtail the involvement of oil and gas in Weld County. Our economic contributions to the County's well being would dramatically decline and could ultimately disappear. To offset the loss of tax revenues, the tax burdens on remaining business and property owners would have to increase dramatically or county services slashed. Moreover, many Weld County residents would lose their jobs. Unquestionably, the economic impact to the voters of this county would be substantial and painful. Members of our industry have worked diligently with concerned citizens and have recently made great strides toward resolving legitimate issues and concerns. During the last eighteen months, COGA and its members have been instrumental in bringing about fundamental and lasting changes to our industry and those interests affected by our operations, including those of the Weld County citizens. For example, during this period of time COGA and its members have: • Created a Code of Conduct for our members (a copy of which is attached to this letter) that commits our industry to a progressive and cooperative code of business practices that is unprecedented in the way the oil and gas industry does business. Colorado Oil & Gas Association 940339 P.O. Box 3236, Denver, Colorado 90201 A AAS I Weld County Commissioners March 31, 1994 Page Four \\ • Been key players in the process that developed and implemented the Wattenberg Rules which were adopted last year by the OGCC and among other things, provided for: * better advance notice to and consultation with affected surface owners * rules for site preparation and reclamation * a free, easy forum for complaints, and * a resolution mechanism • Been extensively involved in the process of crafting Colorado Senate Bill 177 which expands and clarifies the regulatory powers of the OGCC. In the process, COGA worked with representatives of the Sierra Club, Farm Bureau, Colorado Counties, Colorado Municipal League, a Weld County Commissioner, Weld County Attorney and City of Greeley Attorney, among others. • Worked with many of the same constituency groups to draft a Surface Owners Compensation Bill to be introduced in this legislative session. We still remain at the discussion table and have late bill status. Many of our efforts have been specifically directed at constructively resolving issues arising from competing land uses. Given our proactive efforts, which we believe are unprecedented for any industry in Colorado, let alone the natural resources industry, we were surprised and disappointed that we were not invited to participate in your process so that we might add constructive resolutions. As the affected industry, our early input is essential to the process. Other counties and municipalities have recognized the benefit of our initial involvement. We have been instrumental in developing responsible regulations in Boulder County and the cities of Broomfield, Thornton and Greeley. Thus, we have been an active, constructive player in developing regulatory schemes that addressed local concerns while protecting our industry's basic right to operate in a responsible, cost-effective manner. Colorado Oil & Gas Association P.O. Box 3236, Denver, Colorado 90201 9/11:339 Weld County Commissioners March 31, 1994 Page Five Weld County benefits from its diversity of business interests - from its agri-business operations, its strong service sector, and its major corporations. The natural gas and oil industry hires Weld County residents, supports local subcontractors and retail businesses, makes royalty payments to citizens of the county, funds teachers' salaries and bus-drivers' wages, and it provides clean-burning natural gas for the cities, towns, ranches, farms and businesses of the county. Under Amendment 1, Weld County citizens' home assessments will be reduced because of our increased ad valorem tax contributions. The many Weld County residents who benefit from the industry's presence have a major stake in how the Commissioners resolve the contentious nature of the proposed regulations. I offer the cooperation of our Association, as well as my own individual assistance, to work with you and your staff in developing a mutually acceptable resolution and look forward to your hearing on April 6th. Sincerely, ; 7/4'ti • 14-G� William D. Lancaster President WDL/jev cc: All Weld County School Districts Representative Dave Owen All Weld County Fire Districts Representative Pat Sullivan All Weld County Chambers of Commerce Representative Bill Jerke University of Northern Colorado Regents COGA Members Congressman Wayne Allard Governor Romer Senator Don Ament Jim Lochhead, Executive Senator Tom Norton Director Department Members of OGCC Natural Resources Rich Griebling, Director of Oil & Gas Conservation Commission Ron Cattany, Deputy Director Department Natural Resources Colorado Oil & Gas Association P.O. Box 3236, Denver, Colorado 80201 940339 • I.) !.ARCH 94, 1094 ....._.. : 1930 F. 8TH AVENUE,: ►?EN'ER, CO. 80'06 WELD COUNTY COMMISSIONERS 'MELO CCUNTV COURTHOUSE r ^. Pcx 75P t ;REELEY, CO. P0632 GENTLEMEN' �?^'; ZONING & 9UILDIN3 Corp . WE UNDERSTAND THE COUNTY IS CURRENTLY CONSIDERING CHANGES IN THE 7ONING AND BUILDING CODE THAT WILL ECONOMICALY BE INJURIOUS TO TH_ PEOPLE THAT HOLD MINERAL INTERESTS IN WELD COUNTY PEAL rROF- ERTY PRODUCING ROYALTY INCOME rROM PROCEEDS OF OIL SALES. ':WELD COUNTY HAS BEEN A PROSPEROUS COUNTY FOR A LONG TIME FROM THE PRODUCTS CF THE LAND, NAMELY AGRICULTURE AND OIL, BEEN A STREN3TH ECONO"ICALLV TO THE PEOPLE OF THE COUNTY AND ITS TAXPAYERS. LEGISLATION AND RESULTING BUREAUCRATIC pRCCCFSB ACCOMPANINC SUCH LEGISLATION MAKE SO MANY COMPLICATIONS IN OUR SOCIETY. CERTAINLY, THE OIL AND qAs I NDIJSTRY, THE 4TATE LEGISLATURE AND THE WELD COUNTY COMMISSION CAN WORK OUT A SUITABLE PLAN TO OPERATE ALL FACETS OF THE ECONOMIC DEVELOPMENT OF '1,ELD COUNTY WITHOUT THE RESTRICTIONS AND UNCRTAINTIES IMPOSED BY FURTHER COMPLICATING THE ZONING AND BUILDING CODE CF WELD Cour rv. As A TAXPAY7R AND ROYALTY OWNER IN "JELLS COUNTY, I TRUST THAT THE HEARINGS SET FORTH ON NPRIL 6, WILL RE CAREFULLY CARRIrO ^UT FOR THE CONSIDE^ATION OF ALL PARTIES AF'•"ECTE:D 5V DRASTIC CHANGES THAT MAY BE FORTHCOMING FROM CHANCES THAT MAY EE IMPLEMENTED. SINCERELY YOURS, FRANK R. KOMATL 910339 • • • March 28, 1994 RE: Weld County Oil and Gas -- Regulations To Weld County Commissioners; Letters have been mailed out by SOCO, Prima and Basin oi' all of which I feel are coercion in nature. I feel the intent of these letters is to imply that if I don't put pressure on my elected officials these large companies will stop royality payments and/or shut wells in . As a landowner, royality recipient and to;:payer of Wel C County I wish to state CONTRARY to the wishes of the oil and gas companies. that I indeed support you 100% in your action reguarding "Weld County Oil and Gas Regulations CLTL' • 3/3/94." I feel it is due time that the drillers and oil companies • pay for the actual dsmages they are causing . These damages • include tax supported roads , structures and private property in Weld County. Thus, i encourage you to ta'::e action , now. I Remain , do ; oz, 940339 siJc] Snyder Oil Corporation 1625 Broadway Suite 2200 Denver, CO 80202 March 21, 1994 303/592-8500 Fax 303/592-8600 To Our Royalty Recipients: We are writing to inform you of an important matter that could impact your royalty payments. As you know, over the past three years, Snyder Oil Corporation ("SOCO") has been conducting a very active development drilling program in Weld County, Colorado. During this period, SOCO has increased its commitment to not only being the best oil and gas operator in Weld County, but also to being the best possible corporate citizen in Weld County and other communities where SOCO has operations. In this regard, SOCO has been a pioneer in establishing and promoting the following: • Establishing a landowner's "help line" at SOCO's Evans office (303-339-1794); • Conducting regular landowner meetings which continue to encourage communication with both mineral owners and surface owners; • Working closely with the Colorado Oil and Gas Association ("COGA") to establish a code of conduct; • Supporting reasonable and responsible legislation which increases the authority, effectiveness, and enforcement capability of the Colorado Oil and Gas Conservation Commission; • Thoroughly training both SOCO employees and subcontractors to consistently recognize and consider the concerns of both surface and mineral owners; • Investing significant dollars to experiment with leading edge technology which will mitigate the impact of SOCO operations on the lands as well as increase SOCO's efficiency; and • Establishing and maintaining throughout SOCO a keen awareness of the competing property interests within Weld County by fostering a continual focus to respect both the surface and mineral owners' rights in relation to our operations. In spite of these genuine efforts, SOCO continually faces additional layers of government regulation that hamper the ability to profitably produce oil and gas — natural resources which are critical elements of the United States energy independence. Most recently, proposed amendments to Weld County's zoning ordinances and building codes represent 940339 Royalty Recipients March 21, 1994 Page Two regulations which we believe will substantially restrict SOCO's ability to continue its development in Weld County. THESE REGULATIONS AFFECT YOU. If adopted in its proposed form, they could result in shutting-in certain SOCO wells. Further, if you are entitled to royalties on minerals which have not yet been drilled and produced, it is possible you may never receive such royalties, due to the adverse economic impact these regulations pose on SOCO's development program. The proposed regulations both duplicate and exceed the Colorado Oil and Gas Commission Rules and Regulations and attempt to control every phase of oil and gas development in Weld County. They also will require a "special use permit" for every single well drilled in the county. As a SOCO royalty owner, we urge you to obtain a copy of these proposed regulations and investigate their possible effect on you. We respectfully request that you call or write all of the Weld County Commissioners and strongly object to these regulations in their proposed form. We encourage you to remind the Commissioners of the value of the oil and gas income not only to the local community but also to you personally. The Weld County Commissioners have scheduled an informal hearing on April 6, 1994, at 7p.m., in the Commissioners Meeting Room of the Centennial Building at 915 10th Street in Greeley. It is critical that you notify the Commissioners of your objections in advance and also make every effort to attend. Weld County Commissioners may he reached at (303) 356-4000, extension 4200 or at the Weld County Courthouse, P.O. Box 758, Greeley, Colorado 80632. The Commissioners are George Baxter, Dale Hall, Connie Harbert, Barbara Kirkmeyer, and Bill Webster. We appreciate your support and the confidence which you have placed in us, and will continue to make every effort to live up to your expectations in the future. SNYDER OIL CORPORATION 940339 March ch Zit , 1,,94 Weld County Commissioners Weld Cou :y Courthouse Greeley, CO 8{,6v,.,4. RE: Weld County Oil & Gas Regulations Al....I N: Bill l Webster e a r"' M r". Webster: r:::c:cird:i.nq to the information that has come to my attention , purposed changes in the recu1at.ions would curtail proposed productions and transportation of natural gas & oil This would inos1_ likely affect landowners and royalty recipient' s source o-4 income which aids in farming operation expenses. Reduced revenue from taxes could result. !. am confident that continued e-rr'for"•tc +or the concerns of Weld County landowners will guide your attention and action to avoid curtailing production and transportation of gar' and oil . Very I rLl1y Yours, Mrs. William G. Howard P. 0. Box 62 Gill , CO 90624 �� : tz ; ,-714-; ' C��-.2-l" 94C339 28 March 1994 Commissioner Bill Webster Weld Co . Courthouse P .O. Box 758 Greeley, CO 80632 Dear Mr . Webster, The proposed amendments to the Weld County zoning ordinances and building codes represent regulations which will substantially re- strict oil companies in their efforts to produce oil and gas in Weld County. This would result in shutting down some operating wells and limit the exploration for new wells . The proposed regulations duplicate and in some cases exceed the Colorado Oil and Gas Commission rules and regulations, and they will attempt to control every phase of oil and gas development in Weld County. As a Weld County leaseholder, I strongly object to these proposed regulations in their present form. It is important for the Commissioners to be aware of the present value of the oil and gas income to the community, and the potential for the future development of wells . Sincerely, Barbara U. Calkins 13905 Berry Rd . Golden, CO 80401 et: 1c; /teC; ()ft; A&-« (' (t) 940339 March 28, 1994 Dill Webster Commissioner Weld County, Colorado Dear Commissioner Webster, I am writing to you to express my grave concerns relating to the proposed "Weld County Oil and Gas Regulations" (DTD 3/3/94 ) . I strongly object to the adoption of new rules and regulations that have the potential to reduce my present and future retirement income which is supplemented by royalties from oil and gas wells in Weld County. I receive royalties from two oil companies both of which are members of the Colorado Oil and Gas Association (COGA) and both subscribe to the COGA Code of Conduct which recognizes the rights and interests of land owners, local communities and the citizens . Weld County officials and citizens should work with this organization and the State Oil and Gas Conservation Commission to assure that the interests of all are justly considered and satisfied . The rights and expectations of former landowners who had the foresight to retain mineral rights when the land was sold should also be considered and honored . It is also very apparent that the oil and gas industry contributes a great deal to the Weld County economy and tax base, if this source of County income and resident jobs is decreased it will be necessary to increase taxes or reduce County services . In summary, I strongly recommend that the proposed "Weld County Oil and Gas Regulations" be rejected . Sincerel ob__ William D. Anderson 2054 Fuller Rd . Colorado Springs, CO 80920 �`'` lL ; /9-6; (' ) 42-°C-l._lSe- 1,13 �4U339 i:arch 27, 1994 Dear Commissioner • _d_.z. - -e_-L- The undersigned individuals strongly object to the proposed amendments for the ',)eld County Oil & Gas Regulations (DID 3/3/94) - We feel these regulations will curtail proposed production and transportation of product. The impacts on future drilling will be severe , at best indefinite delays and significant reduction in oil & gas activity. The requirements of the regulations will add severe.:_ financial burden to the costs of drilling that it will be impractical and unrecommended to continue. I strongly ask that you curtail these proposed amendments. Sincerely, J Wiz_ h'7e Cr TfL John I . McGrath /7/et-41 - 4L -L Diary E. Lebsack 940339 TO: Board FROM: Vicky DATE: March 30 RE: Oil/Gas Hearing Edelia Vargas 1914 109th Avenue Oakland, CO 84603 Called to express her opposition to regulations. Concerned about loss of royalties. ***************************** James G. Milne P. 0. Box 22 Lucerne, CO 80646 356-1385 Called to express support of regulations. Anything commissioners can do to keep industry in check is crucial. He both owns royalties and has drillers on his farm land. ***************************** L4c ; 7 ire:; cdi ; ,;,.C 940339 `. on3 /995iS 44641 Ong — �� , d -1/r- 0'i-el -fr- iar /4i/4 (,,,r-er-tt /7. cr-d /1-7-467 /1`e-le-- Atct-e-re A /12--- /6-1-noti-, y nil la cfii % / ,5- 2 ec : AG; (,9; �� X4339 March 2'9, 1994 Weld County Courthouse • - Weld County Commissioners P.O. Box 758 Greeley, Colorado 80632 Dear Commissioners - As a royalty recipient - Owner #31001714, I strongly object to the proposed regula- tions which will restrict SOCO's ability to continue its development in Weld County. These regulations wi'1 have an adverse economic impact on the local community. Oil and gas - our natural resources are critical elements to the United States energy independence. Sincerely, Ethel E. Swanson 5839 So. Windermere St., Littleton, Colorado 80120 eN_ : PP.) He 940339 &H) • - cc. f7 ✓ __ -jf , C % 'Y f, - ai2/14i1 •C �K /21 j% ;ate ;1� z (;) /// �I F Al?, it dG : PC, /712 ; d,4) r e 940339 leatar-d aitLice+ _z,La ja. - „die- =-cam— -, - - - - - . 4 _ A, Ley J 414-42117 4141-4. jtit to t/ „kozzur eta-r ln. l/a y Y 49 1--e - -� AZ/ /-(Li l9i: Q940332 MARCH 25, 1994 1 195 LA MUF:EE RD. , NO. 1:'1 SAN MARCOS, CA. 92069 . WELD COUNTY COMMISSIONERS WELD COUNTY COURT HOUSE P. O. BOX 758 GREELEY, COLORADO 806•:.2 ATTENTION: 54-.1.4.0 c4.1 WE STRONGLY URGE THAT THE PROPOSED WELD COUNTY OIL. AND GAS REGULATIONS, DATED MARCH 3, 1994, BE REJECTED. WE FEEL THAT THE INDUSTRY HAS WORKED HARD FOR THE LAST TWO YEARS WITH THE STATE LEGISLATURE, THE DEPARTMENT OF NATURAL. RESOURCES, THE OIL AND GAS CONSERVATION COMMISSION AND MANY CITY AND COUNTY GOVERNMENTS TO IMPOSE NEW RULES ON ITSELF TO MITIGATE CONTENT IOUS ISSUES. THESE: PROPOSED REGULATIONS WOULD UNNECESSARILY RESTRICT THE DEVELOPMENT OF OIL AND GAS IN WELD COUNTY WHICH WOULD HAVE A SEVERE ECONOMIC IMPACT ON THE COUNTY 'S BUSINESS CLIMATE AND PROPERTY TAX BASE. THE INCOME FROM THE INDUSTRY IS ALSO VERY IMPORTANT TO US PERSONALLY. WE THANK: YOU FOR YOUR CONSIDERATION. VERY TRULY YOURS, Lt a ,. c.,-,4,42_,,, CARL._ W. AND NIJRNA E. LINDEN 940399 . , o • 36913 33rd Ave. So . Auburn, WA 98001 1 arch 28, 1994 Weld County Commissioners Weld County Courthouse J .0. Box 758 Greeley, CO 80632 I strongly oppose the proposed amendments to Weld County' s zoning ordinances and building; codes as they affect oil and gas development and production. It is my understanding they will likely adversely affect the royalties we are currently receiving and that mean so very much to us. It is very difficult for me to understand why the county feels it necessary to add another layer of regulations to those of the state. This , in the face of badly needed economic development. }lease reject the proposal. Thank you. Dwight W. Gause Cc ' /2i.) r/z.; Cam; 'cam 940339 Patti A. Karr 4643 So. Sherman St. Englewood , CO 80110 March 29 , 1994 Dear Board of County Commissioners , I strongly object to the proposed Weld County Oil and Gas Regulations for the following reasons : 1 ) Personally, I depend on the royalties I receive from several oil and gas wells in Weld County . In the future , I expect more wells to be drilled . The proposed regulations will add such severe financial burdens to the cost of drilling that it will be impractical and uneconomical to continue . 2 ) The oil and gas industry is extremely important to the county ' s business climate and property-tax base . If the industry ' s major contribution to the county ' s property tax base disappears , the amount will need to be made up from higher taxes elsewhere to maintain county services . Please, DO NOT adopt the proposed Oil and Gas Regulations ! Sincerely, Patti A. Karr et. PL; HZ; [A-; C�Oir 940339 nAr �i-",roso a/ez Rt. 3, Box 14 Doa92aa,,, KS 67039 r W Ya ',/d March 25, 1994 to pphone and 4ax 4/!e L612 r a/1 3 Weld County Commissioners P. O. Box 758 Greeley, CO 80632 Gentlemen: As a royalty owner of oil and gas production in Weld County, I am strongly opposed to the proposed amendments to the county zoning ordinance and building codes as "Weld County Oil & Gas Regulations" (dated 3/3/94) . As you may be aware, the oil and gas industry is vital, not only to the economy of Weld County, but to Colorado and the nation. Recent product price declines as a result of increasing foreign oil imports have already virtually wiped out the industry. Please do not pull the plug on the respirator by adopting the proposed legislation. Not only will the industry suffer, but higher taxes will inevitably result for surviving sources. Yours very truly, TRI-W CORPORATION .` . Wa e lelci President cc: Basin Operating Company 370 17th Street, Suite 1800 Denver, CO 80202 Colorado Oil & Gas Association P. O. Box 3236 Denver, CO 80201 Snyder Oil Corporation 1625 Broadway, Suite 2200 Denver, CO 80202 l� fl-; NE, c'8; G6CG 94(339 Mabel , Minnesota March 28 , 1994 Weld County Commissioners Weld County Courthouse P.O. Box 758 Greeley , Colorado 80632 Dear Commissioners , I strongly oppose any change, through proposed amendments to Weld County ' s ordinances and building codes , which may affect the royalties that I am now receiving or may in the future receive from my mineral rights . The value of oil and gas income, I am sure, is essential to your local community as well as to myself . We , as a country, must become more dependent upon ourselves in the production of our natural resources . Please don ' t hinder this by injecting stricter regulations and ordinances that would prohibit this energy independence and restrict further our freedom of choice in this country. Sincerely , 7 q Darlene A. Larson Rt . 1 Box 219 Mabel , MN 55954 cc : Snyder Oil Corporation C : PGA Ali; an B o«_ 940339 14600 Crabapple Rd.. Golden, Colorado 80401 Larch 28, 1994 . . . , Bill 'Vebster and other ''ount,'i commissioners '.Feld County P.0.Box 758 Greeley, Colorado 80652 Dear Chairman 'Nebster and the Board: May we take ,lust a minute of your time to express to you our thoughts on the proposed "'Veld County O11.nd Gas Regulations"? 'rye hope you will agree that the vital oil and gas industry in ':'eld County should not be shackled with further rules and regs. First and foremost, we feel that America' s dependence on foreign oil is a threat to our national security. ",e think the LT g should do everything possible to encourage domestic production - that meRns not puttng up roadblocks. e understand of course that a certain amount of regulation is necessary in every industry. but business can only tolerate a certain amount of it and continue operating profitabl4. '!e under- stand that ap,;roximatel7 20% of tax revenues in Weld dly County it derived from the oil and gas industry, e obviously it one of the larger eL ployers. Drillers are not like "Diamond Jim Brady" - if it were such a wildly profitable business, there would not be such a large nercent oe rigs laid up. The cost of every dry hole has to be charged agP4nst production somewhere. On a more personal rote, we happen to by 75 and 79 years old respectively. From 1971 to 1931 we owned Circle Drive-Sun Valley Mobile home parks at 2nd St and 21st -ave. there in Greeley, and found it a very pleasant and cooperative place in which to do business. We invested in other ':`+old County real estate and presently have an interest in wells operated by Snyder Oil Co, Associated Natural Gas and Transport and also Prima Oil, the income from which is a good part of our retirement income. . . .if these companies mndon'tth at it is becoming unprofitable to to business in '�c County, need to point out the loss to us and to '.'-eld County Coffers as well as our country. We understand ofcourse that some problem or problems must nave triggered these proposed new regulations, but please be very sure that if you implement this proposed solution, that it won' t trigger worse and larger problems. Thank you for your consideration. • cll. 77 Sincerenly471-4/1 Pi- 171 William and ' y cFerren 'C� tt /7 ' l�L ' �' 940339 AL-k .12 L 1 (r d 7 lda- Io 4,77 a-��`.. e aPoeo ficeiLi �� 424.4--a- ett›ks)t_ - ,-7,7t ' 4- apascYcilz> C' ,-- �� d - C`JQ. c_ cep c _adz- raga+ r - _zdge .ze2pact, „00,45_ 0„..„ oti; //,) ,,„„,,,) 940339 7Z I, 1 amat4e.0_- .- t_ eJGa s4_4* 7- i"jesI 6-419-z-7-rt.. srs /M. ii s4 -74,-1/2atil . - ,, tom . readiensm...,c:, ...c4cz,..,,zeect.)--„y ..._t_ce.fi,. _,A,i,: .„--44, 0 r c_i___ -- 4c _ _ :. -12/6„,Lza_m974eL.Lni a9_64 --Zpt-t'Aa_lei-e . - a-et/it r 6 r - �.2d-ttp i. eeII r H Sze,, at - O _ oil o ii ` , c r m 9 i 7 940339 secee At_ e - „ At-L-4712- Sruer--- r ?( 940339 C Into o c- 3 — °DAF,4C mil �Q�G'c±C 0.042 co_ cy-t ct yL °lye r - a _ =c 41 ' - f clacogEeydy 6z44-tom J -1-t-ST,c7L-fr a.s �ZJIz.QbZ = 1 S- .fi r - t _ " ..__ Vie, Z�37> i3«%dal k- - I/114,2 (0262 444,-4:9 ��o_ ,F2)9/ 7 S40339 CARLSON OIL AND GAS , INC . 678 South Nome Street Aurora, Colorado 80012 (303) 343-7443 March 25, 1994 Weld County Commissioners Weld County Courthouse PO Box 758 Greeley, CO 80632 RE: Proposed Amendments : Weld County Zoning Ordinance and Building Code Weld County Oil and Gas Regulations (DTD 3/3/94) Dear Sirs: Carlson Oil and Gas , Inc. has various gas, oil and mineral rites in Weld County which may be greatly affected by the referenced amendments . Please send a copy of the proposed amendments immediately to the following parties for their review prior to the hearing scheduled April 6, 1994: ALOIS J BREUER WILLIAM JOHN ERIC CARLSON 3706 W 7TH STREET ROAD 7191 49TH STREET GREELEY CO 80634 GREELEY CO 80634 ALBION JOHN CARLSON LOUISA CARLSON WARFIELD 2744 GALISTEO ROAD, #H PO BOX 1143 SANTA FE, NM 87505 GREELEY CO 80632 JANE CARLSON SONJENNE E McGECHIE PO BOX 1838 678 S NOME STREET GREELEY CO 80632 AURORA, CO 80012 WILLIAM ALBION CARLSON III JENN J TONSO 7180 49TH STREET 941 SCHOOL ST GREELEY CO 80634 CRAIG, CO 81625 Sincerely, Sonjenne McGechie Secretary/Treasurer pc: George Baxter Dale Hall Connie Harbert Barbara Kirkmeyer Bill Webster Carlson Oil and Gas , Inc. , Board of Directors C�� : /) ' /G.j (),/9, /3 oCG�sa z, � 940339 > � ) 77 (/' /✓ Zvi �,e 6 r -_----- -- - -- - � D ' e-12' ✓ & l � / ,4_ l /_-6/ stead 772 - P- v 2a f? 4 LLB_ eg,---- 94C339 2-Z4L. •) L� 3 c k4 • 7 h Lflti ) l -i c: c.; ;� 6,41-112. a- 1r'Y/ Jy✓ L'1 J'L'L7 N-Ti it: nil r y r l F � F' 4424 / (' ' 14..11/0.?....-Li I -- )Zcivc. 1 9 l _L Z ap c-c ,,i a}-71_ 4:2-t;:r oltA 7`-'-Y 't L6. Yv - , Lt !d • 4 /1. rcJi v 4'L,.--] .'hey t et : pc; CR; /3a 9403,39 H OA AD I Inc . Box 1b.. • Ft. Lupton, Colorado 80621 (303) 659-2828 MARCH 25. 1994 MR. BILL WEBSTER WELD COUNTY COMMISSIONER P. 0. BOX 758 GREELEY , CO 80632 DEAR MR. BILL WEBSTER; HOAD INC . IS A SMALL BUSINESS IN WELD COUNTY. IT IS A SERVICE COMPANY AND MANUFACTURER OF NATURAL GAS MEASUREMENT DEVICES. WE PRESENTLY EMPLOY 26 PEOPLE. OUR COMPANY HAS BEEN IN BUSINESS IN WELD COUNTY FOR 14 YEARS. OUR PRIMARY `- I CLIENTS ARE THE NATURAL GAS PRODUCTION, GATHERING. AND TRANSPORTATION COMPANIES IN WELD COUNTY. OUR ANNUAL GROSS REVENUE IS $ 2. 500, 000 + . WE ARE VERY CONCERNED WITH SOME OF THE PROPOSED REGULATIONS TO REQUIRE USE BY SPECIAL REVIEW PERMITS FOR NUMEROUS OILFIELD ACTIVITIES. WE UNDERSTAND THE NEED FOR COUNTY CONTROL . BUT IT IS OUR OPINION THAT THESE RULES WOULD GREATLY INCREASE THE COUNTY BUREAUCRACY WITH A LARGE INCREASE IN THE COST OF COUNTY GOVERNMENT. IT WOULD ADVERSELY IMPACT COMPANIES ABILITY TO PRODUCE OIL AND GAS EFFICIENTLY . IT WOULD REQUIRE THE EXPENDITURE OF FUNDS FOR BUREAUCRATIC AND NONPRODUCTIVE FUNCTIONS INSTEAD OF PRODUCING OIL AND GAS. WITHOUT PRODUCTION, THE NEED FOR VENDORS AND CONTRACTORS WILL SOON DRY UP, AS WELL AS TAX REVENUES GENERATED BY PRODUCTION. PLEASE REMEMBER THE OLD SAYING: "YOU CANNOT UP EGG PRODUCTION BY STRANGLING THE GOOSE" . VERY R LY Y URS H. W. S DDLE , P. E . HOAD INC. PRESIDENT III (I-'lll °t ii.'i �I!sli bUi • r, filliktaiss FRONT RANGE : i sz%y- - LAND AND MINERAL OWNERS ASSOCIATION 1001 "O"STREET - GREELEY, COLORADO 80631 - (303) 356-7090 a chartered chapter of the National Association of Royalty Owners (N.A.R.O.) March 24, 1994 • Commissioner William H. Webster, Chairman Board of County Commissioners a Weld County P.O. Box 1948 Greeley, Colorado 80632 Dear Commissioner Webster, Since 1986, the Front Range Land and Mineral Owners Association which currently represents over 1 , 200 members, has promoted the economically prudent and environmentally sensitive development and use of Colorado ' s land and mineral resources , and worked to protect the property rights and financial well-being of land and mineral owners alike. In Colorado, those who have a legal right to develop the oil and gas resources underlying any given tract of land also have the right to use a reasonable amount of such land while exercising their development rights . Such developers do not, however, have any right to damage, destroy, or take such land away from it ' s rightful owners without being liable for such actions. Our association recently commissioned a panel of experts to study the effects that oil and gas wells have on the agricultural productivity and value of the lands upon which they are drilled. The panel concluded that conventional oil and gas well drilling and production operations cause soil degradation and adverse land use impacts that are collectively costing Weld County land owners and agricultural producers in excess of $5 million dollars annually. These losses stem from reduced crop and pasturage income, increased land management costs, and property devaluation. To control these losses, our association is calling for the implementation of uniform land protection regulations that are applicable throughout Weld County. e ; Pc; tic es ; oacc94C339 Commissioner William H. Webster March 24, 1994 Page 2 On September 30 , 1993 , the state Oil and Gas Conservation Commission issued land protection regulations that cover only about 25% of Weld County. Draft Weld County oil and gas regulations dated March 3 , 1994 are very similar to those state regulations, but are applicable throughout the county. However, draft county regulation 120 .9 entitled Surface Damage Agreement contains a provision that exempts oil and gas well operators from complying with most of the draft county land protection regulations if a surface damage agreement is in effect. We strongly recommend that this exemption apply only in those areas where similar state land protection regulations apply, and only where such surface damage agreements contain specific provisions and requirements. For a more detailed outline of our concerns and recommendations regarding the draft county oil and gas regulations, please refer to the enclosed letter submitted to us by our attorney, Mr. Russell Anson. Thank you for your consideration. Respectfully submitted, Fred O. Gibbs President Enclosure cc: Mr. Lee D. Morrison Clerk to the Board of County Commissioners 940339 R. RUSSELL ANSON ATTORNEY AT LAW 820 13TH STREET GREELEY,COLORADO 80831 (303)353-5508 TELECOPIER:(303)353-5722 • March 24 , 1994 Fred O. Gibbs, President Front Range Land and Mineral Owners Association 1001 "0" Street Greeley, CO 80631 RE: County Regulations Dear Fred: This letter is per my telephone conversation of March 23, 1994, concerning the proposed Weld County Oil and Gas Regulations. I have a number of concerns regarding the regulations. In general the regulations are too vague and lack specificity concerning the requirements for a surface owners agreement and requirements for notification of the surface owner of actions and issuance of permits by the county and in the lack of some of the requirements for a surface owners agreement. On page 6, at the top, in part of definitions, I do not understand the part which states, " The provisions of the oil and gas Conservation Act shall prevail if necessary to avoid waste or protect the conductive rights of operators. " At section 105 on the same page, I presume that the ordinance referred to in that section is "this" ordinance. On page 7, at section 110. 5, there is no indication of what the minimum evidence of surface owner notification is. On page 10, there is a requirement for a $500, 000. 00 blanket bond. Is this amount adequate for a blanket bond to cover the entire operations in Weld County? Section 120.2 , regarding insurance, on the same page, there should be a requirement for notification of any cancellation or reduction or any other change to the policy to be given to Weld County and that if there is cancellation that the permit issued to the oil company shall be suspended until adequate insurance is reinstituted. The most important requirements that we can have in these regulations are concerning the requirement for a reclamation and restoration plan. The requirements start on page 12 , at Section 120.7 . On page 13 , Section 120.7 . 1. 1, it states in part, " All areas affected by operations shall be reclaimed as near as practicable . . . . " but, there is nothing specific enough to indicate 940339 What is meant by "near as practicable. " In Section 120.7 . 1. 3 , on page 14 , the word "subsidence" is used, but there is no definition specifically of what "subsidence" means in this instance. Section 120. 7 . 1. 5, is not adequate enough, as far as guidelines for determining what "productivity level" means. It must be more specific and must apply to measure the historic productivity levels. There must also be some indication of how that is to be determined. What we have previously recommended is that someone from the extension office, as an expert, determine what the productivity level should be. It should also require minimum annual inspection until the condition of the soil is returned to its prior level. Again, in Section 120.7 .2 , on page 15, there is no indication on how notification is given by the operator to the Surface owner. On page 16, in Section 120.9 , regarding the surface damage agreement, this provision is not adequate and does not contain the requirements that we discussed with the Board of County Commissioners at our informal meeting. There must be minimum requirements that have to be in each and every agreement. Although they are referred to in that paragraph, there is no indication that these provisions are required. Therefore, an oil operator could submit an agreement without the minimum requirements and be exempted from all the other provisions of this ordinance. Attached to this letter, you will find the notes that I made when we gave our presentation to the Board of County Commissioners that outline the items that we need for an adequate agreement. In Section 120. 10, on page 16, and as well as in other places of the ordinance, there is no requirement that the oil company cease operation if there is a violation. Nor are there any time requirements for the oil company to come back into compliance. In Section 125, on page 24, as well as in other places of the ordinance there are statements that water down the effect of this ordinance, such as, "do not materially impede" and "if it is possible for the operator to appeal to the OGCC for a variance. " On page 32 , in Section 130.3 , withholding permits, I would suggest that the last sentence containing the word "shall" be changed to "may" depending on the circumstances so that we do not leave it open for someone to simply come back under compliance on a single violation and automatically be allowed to continue operation. 940333 At Section 134 .4 , it should be emphasized that reclamation must be completed before any financial guarantees are released. It also must be detailed as to what reclamation requirements must be met before that release occurs. In the last sentence on that section, I don't know what they mean by, "the person providing the bond is adequate" . I hope this helps you in drafting your letter. If you have any questions, please give me a call. Very Truly Yours, R. Russell Anson !gam Attorney at Law RRA/la Enclosure 940339 SUGGESTED MINIMUM REQUIREMENTS FOR SURFACE DAMAGE AGREEMENT I. COMPENSATION FOR DAMAGES ASSOCIATED WITH DRILLING AND INITIAL COMPLETION OF THE WELL TO INCLUDE: A. Construction of an access road. B. Preparation and use of the drill site area. C. Preparation and use of reserve pits. D. Construction and installation of production equipment and facilities such as a flow line, a separator and a tank battery. E. Loss of growing crops. F. Damages to any property of landowner, including, but not limited to, trees, shrubbery, grasses, irrigation wells, fences, bridges, pipelines, ditches, or irrigation and drainage systems. II. COMPENSATION FOR DAMAGES ASSOCIATED WITH USE OF THE SURFACE ESTATE FOR OIL AND GAS EXTRACTION TO INCLUDE: A. Loss of land productivity. B. Lost land value. C. Lost value of improvements. D. Contamination of water, land or wildlife habitat. III. A FORMULA FOR DETERMINING DAMAGES THAT ARE FAIR AND REASONABLE TO BOTH PARTIES IV. A METHOD OF DISPUTE RESOLUTION THAT WOULD RESOLVE DISPUTES BETWEEN THE OWNER AND OPERATOR WITHOUT THE NECESSITY OF LITIGATION, SUCH AS ARBITRATION, MEDIATION, ETC. 940339 March 27 , 1994 Dear Commissioner .mac?-t=—' The undersigned individuals strongly object to the proposed amendments for the Weld County Oil & Gas Regulations (DTD 3/3/94) . We feel these regulations will curtail proposed production and transportation of product. The impacts on future drilling will be severe , at best indefinite delays and significant reduction in oil & gas activity. The requirements of the regulations will add severei_ financial burden to the costs of drilling that it will be impractical and unrecommended to continue. I strongly ask that you curtail these proposed amendments. Sincerely, '�c'-4. Z �Ie(9 r✓9 T{. John I . McGrath Mary M. Lebsack /W /.Cdr. .9ocC_ 940339 MRR 29 '94 13;1B PETR0X INC P,1 T I l S G�l Sr, L (C 4-0 C'.,,,,,,,,(s) t IC� � y- i C March 29, 1994 vy Weld County Commissioners P.O. Box 758 Greeley, CO 80632 RE: Proposed Amendments Oil and Gas Zone Ordinances and Building Codes Weld County, Colorado Commissioners: As a farmer, landowner and Oil and Gas mineral owner in the Platteville Area, I strongly urge each commissioner not to adopt your proposed new regulations governing oil and Gas development in Weld County. I feel the Colorado Oil and Gas Conservation Commission rules and regulations are more than adequate and your proposed regulations are redundant at best. One of your goals as commissioners is to minimize government duplication, not create more. The goal here is to create good jobs, tax revenue and provide incentives to due business in Weld County. Your proposals will only lead to disincentives creating job loss, loss of royalty, loss of tax revenue to the county and result in a myriad of law suits challenging your duplicate regulations. As has happened all to often in the past with excessive government regulations as you propose the only real winners are the attorneys and self-serving bureaucrats. Sincerely, Michael J. Clark 9291 County Rd. 28 Platteville, CO 80651-9120 MJC/sc I> r• CC . PG /fG �s9; 66c-C- MRR 29 ' 94 13: 14 3037856113 + PRGE . 001 940339 t‘t, mEmORAnDUm WI(D€ To Commissioners Data March 24, 1994 COLORADO From Kimberlee Schuett, Deputy CTB Subset: Oil and Gas Regulations John Ulrich of Ulrich Farms called to state that he was opposed to the Oil and Gas regulations currently being drafted. ifL/ (+fj/ eiCC 940339 K N FRONT RANG= K N Front Range Gathering Company GATHERING COMPANY 635 N.7th Ave. Brighton,CO 80601 A SUBSIMAPY OF �� (303)659-5922 �7T C ewor I( ,,t. r lrry„ March 18, 1994 "`' (v , 2 3 1994 Mr. Lee D. Morrison 111. Assistant Weld County Attorney P.O. Box 1948 '4T4O;_e, �_,=y, _ • Greeley, Colorado 80632 _ Dear Mr. Morrison: I wanted to let you know that I very much appreciate your having sent me the proposed Weld County Oil and Gas Regulations. After a review by myself and others within our company we have determined that the proposed rules will have a significant impact on the ongoing operations of producer companies which of course are our customers and therefore would have a significant impact on our economic future as well. We look forward to your informal hearing on 4-6-94 so that we may learn more about the future of oil and gas activities in Weld County. I hope that compromises may be occur that will lead to the ultimate best interests of all parties concerned. Thanks again and we' ll see you on April 6 at 7: 00PM. yery_tr„uly yours, Jim Kennedy Group Leader, Constru ion and Administration K N Front Range Gathering Company cc: Bob Boumann Don Parsons file eL' (1A; ,z-) /-/e.;L3OCC 940333 March 25, 1994 Commissioner Harbert, I am opposed to "Weld County Oil and Gas Regulations" (DTD 3-3-94) . Because if the industry's approximate 20 percent share of the county's property tax disappears, the amount will need to be made up from higher taxes elsewhere, or county services will be cut back. We also depend on the income every month. Yours truly, O762-z Green Ridge Builders, Inc. Lero/ y/Gabriel 1804 Silver Leaf Drive President Loveland, Co. 80538 Green Ridge Builders, Inc. CC ; PC) r-/t) cA ; /3occ±4`n'-d) 940339 ktL1 &. gy np� . .7 J ,yyf � ?8-, /yy / of�-2 ed: � 11 2— l' k ,c t M , Gaetzke �� J� c 74--47 Yg P.O.Box 427 or y� 5'U 5 Nederland,CO 80466 CZ-t/ / zrte mY /C ��/ `mo • ��- �e , J��U� aL.C �; dt-ner -� � r� ` � � e e✓ ' iiist-ec-m,ij.ret„c7. 22. ' ,L,L,_ __.--nz.,z..,„ec, )eve-AL04...-_, . 7÷7 _ -fftera---‘Xt.-_ve_e_.,,ee/eoc_ � - ac- t /L'Pig yc-e✓ X---e--2 1(✓ S he: il�G /tea.ea. 4, �?ov? et-pt-)0, ,L,Id X-g_-/-e. i, . g-r-7 si - /Leal .--,z_e-e-e.,-/Atree--tn., je.e. ' . J ��z 2 da'SV 7a �P e✓ _p_.,,,,--- ✓ - `-,e- .� ,io n✓ =1�-. " .Lf 0� i e _• - s eC , Pc tiL i CA) ecicc�sa ) j } 1 , vi I ( / / ,,q1 , 7 ,ii fop , Li I -- i' L.-< a LL..I C/,fix d'� 3S , ILL • . CI_' rLil . CA, /1(4:- i 1"-- �l< 6 tt /, cf .,r E -� �>t�_-,� L I L i G,A. t : !k 6t l J' L� 7 — , .l'./ ,,� Lc'L i L, (.1/1 t-? 17 Lt( l- vu [i t k-I Lr, elt /� L Li lip J 9 i. `ii C) itI J J I is c(7 c Lc_.r- . � ' t i712.C1_,,'‘.— 1,71 I/ •-;;;Ii „„,1 d C Y1. �,L )/ 7x_c , :l d l'Lt�i i I l L 1 n .v 4. n 1 33$ ,I�.._,�-I Ili 'S _ Li�Q ,7 11-7 LA r /VILA' 6 �, �2�' ` Y � , ��L �;�Z�C-bZ�� Cllr--� ° C. c-4r !r r !l ,,,,e,17/.,„,,i,,,,. 7,2i,,i,,`.0.7t2 rit 2-C G r �. ,-s C. C `/-?))._, d-<_j i�%V ./1 P (JI )� ('CA i-A.--":-.4_,-(7.- .Ct+�- 0 ww z 7�I C �� - vysl2� 1,i_ 1 C Ltiu, L-'.; r-3 L/La.ILO.- 4, e e r Pe, ; c'"J- ; ,3oGr_i' mL ".` a 9403. 9 1)11 (CI*S \(/se M,OFFICE OF COUNTY A I1� PHONE(303)358.4000 E 4391 \\ P.O. BOX 1948 ' GREELEY,COLORADO 80832 COLORADO March 4, 1994 Mr. Ivan Grine Colorado Farm Bureau 16300 E. 168th Avenue Brighton, CO 80601 Dear Mr Grine: The draft Weld County Oil and Gas Regulations are enclosed for your consideration. Should you wish to make written comments, please do so to the Clerk to the Board of County Commissioners, P.o. Box 758, Greeley, Colorado 80632, within the next 20 days . The Anrre: .,c County Commissioners will be holdinc -"' '}inns, and you will be advioc., 940339 Basin Operating Coin y 370 17th Street,Suite 1800 Denver,CO 80202 Office 303/685-8000 BII II■ Fax 303/685-8010 To Our Royalty Recipients: March 21, 1994 Weld County has released proposed amendments to its county zoning ordinance and building code. These 'Weld County Oil and Gas Regulations" (DTD 3/3/94), if adopted by the county commissioners will JEOPARDIZE YOUR INCOME FROM THE NATURAL GAS AND OIL INDUSTRY. These regulations will curtail proposed production and transportation of product. They may force wells to be shut in. Impacts on future drilling are equally severe. The regulations will require special use permits for all activities, i.e., win duplicate the work of the State Oil and Gas Conservation Commission but without the staff, resources or expertise to handle the load. The result will be at best indefinite delay and significant reduction in oil and gas activity or at worst a complete breakdown of the system that will bring oil and gas activity to a halt. Other requirements of the regulations will add such a severe financial burden to the costs of drilling that it will be impractical and uneconomical to continue. Thus, if you are entitled to royalties on minerals not yet drilled, it is likely you may never see such royalty. Even existing royalty could be impacted. The industry has worked hard for the last two years with the State Legislature, the Department of Natural Resources, the Oil and Gas Conservation Commission and many city and county governments to impose new rules on itself to mitigate contentious issues. We have adopted an unprecedented self-policing Code of Conduct (reproduced on the back of this letter) to confirm our commitment to work constructively with local communities. However, despite our efforts, these proposed regulations were drafted without industry input. They seek to impose a bureaucratic process that appears to have as its sole objective an immediate and permanent halt to natural gas and oil operations in Weld County. TO MAKE A DIFFERENCE YOU NEED TO: Call or write all the Weld County Commissioners to object strongly to the proposed regulations. Take action before the first hearing on April 6. Point out the value of oil and gas income to you personally. Point out the importance of the industry's economic impact on the county's business climate and property-tax base. (If the industry's major contribution to the county's property tax base disappears, the amount will need to be made up from higher taxes elsewhere to maintain county services.) TAKE ACTION NOW; TIME IS IMPORTANT: The first hearing date is Thursday,April 6,at 7:00 p.m.in the Commissioners'Meeting Room of the Centennial Building at 915 Tenth Street in Greeley. It is critical that you attend and make your objections and concerns heard. Weld County Commissioners may be reached at(303) 356-4000,extension 4200, or at Weld County Court House, P.O. Box 758, Greeley, Colorado 80632. The commissioners are George Baxter Dale Hall Connie Harbert Barbara Kirkmeyer Bill Webster des, P�; 4iz; ed.? ,oa« 940339 is `9e tP COCA 4, CODE OF CONDUCT We, the members of the Colorado Oil and Gas Association: 1. Acknowledge the importance of reasonable, responsible and safe development of natural gas and oil interests in Colorado. 2. Believe that the interests of landowners, local communities and the state are, and should be, complementary to those of the natural gas and oil industry. 3. Pledge to cooperate with local governing entities to address the concerns of the local jurisdictions and of their citizens with respect to natural gas and oil development within their jurisdictional boundaries. 4. Commit to working with local jurisdictions on methods to mitigate land use concerns and allow safe, efficient, responsible development of natural gas and oil. 5. Value the integrity of the land, water, air, and other resources of the state, and pledge to conduct our operations in an environmentally responsible manner. 6. Understand the need of local residents to contact operators, and will maintain a publicly accessible list of COGA member companies with specific contact names,addresses and phone numbers to respond to local concerns. 7. Pledge to communicate plans and actions in which local groups or individuals may have an interest. 8. Will respond promptly to the concerns voiced by local communities, agricultural interests, businesses, individual residents, and their representatives. 9. Recognize the unique character of each site and that our operations may need to be managed to accommodate competing land uses. 10. Support a strong regulatory role for the Colorado Oil&Gas Conservation Commission in the development of natural gas and oil resources in a manner consistent with public health, safety, welfare, and the protection of the environment. IMPLEMENTATION STATEMENT The Colorado Oil and Gas Association Code of Conduct validates the commitment of the membership to the principles described and the commitment of the organization to assist and educate its members in acting in accordance with the principles. In implementing the code, the Association's focus is on educating members regarding prudent and ethical practices and on working with member companies to encourage and assist them in addressing issues or concerns brought to the attention of the Association. Adherence to the Code of Conduct is a condition of membership in the Association. The executive director of the organization has primary responsibility for implementing the Code of Conduct by responding to concerns raised by the public. When unable to resolve concerns, the executive director seeks guidance from the Association president, the executive committee or the board. To assist the public in communicating with the Association and its members, a list of telephone numbers is being developed. The list will be updated periodically and will be widely distributed. Colorado Oil & Oas Association P.O. Box 3236. Denver, Colorado 60201 940333 March 10, 1994 Board of County Commissioners • P. U. Box 758 Greeley, CO. 80632 Dear Commissioners: I wish to thank Lee Morrison for giving me an uppui'Luui Ly Lu comment on your Weld County Oil & Gas Regulations DralL ddL'd March 3, 1994. I have served on a state committee to help draft rules and regulations for the the State of Coluiddu Lu help get a handle ui, Lhis whole mess. Since March of 1993 1 have been serving on the compensation committee to try to draft legislation for the state but we have not been able to reach any compromise at all. Some of the things we have agreed on I feel should be in your draft for consideldLion. These would go under 120. 9 Surface Damage Ayi•eemenL. I feel you should define surface damage so negotiations will be mule fair. ( 1 ) Damage to coups, itzeludiny pasLur e, whiul, are plaiiLed, dormant or growing at the time of commencement of the oil and gas operations. (2) Compensations .Cut' any field pL epai dLiun, leveling, fertilizing, spraying, planting and etc. which are incurred prior to oil & gas operations. (3) Compensation for the cost of repair, including rr,a les i ale and labor , up to the replacemeci L uus L, ul any ad j udied led water rights, water supply systems, irrigation systems cis drainage systems which are damaged. (4) Damage to any landscaping, fences, culverts, cattle guards or any other personal property, improvements or fixtures. (5) Damage to any livestock or lost. We were unable to come to any agreemen L wi Ll, Lila oil & yes companies on loss of agriuullute piuduuLiviLy. There should always be a written agreement between the surface owner and his tennant before any gas & oil operations proceed on the surface. One final thing a copy of this final draft should be given to the surface owner by the oil & gas operators before negotiations begin. Thank you: IVAN & JOAN GREIN C74\g41 .4-e 16300 E. 168th P B;i i.,o,, CO EG;;01 : �1 �L'940339 13517 Weld County Road 20 Fbrt Lupton, CO 80621 March 26, 1994 Weld County Commissioners: Barbara Kirkmeyer George Baxter Dale Hall Connie Harbert Bill Webster P.O. Box 758 Greeley, CO 80632 Dear Ladies and Gentlemen: This is a response to the enclosed letter we have just received from Basin Operating Company regarding your proposed amendments to the zoning and building regulations. I have not seen the proposed amendments; however, I am well aware of the difficulty we and some other landowners have had in the past with communication with oil and gas companies and with their operating procedures. If, indeed, the regulations were drafted without industry input, you have left out the major stakeholders, and I would suggest delaying adoption of the regulations until they can suggest some reasonable modifications. As noted in the letter, I am well aware of the oil and gas industry's contribution to Weld County's tax base. I am also a school board member at Fort Lupton. So far as income goes, our wells are not great producers at this time, having been drilled in the 1970s. So far as the "unprecedented self-policing Code of Conduct" on the back of the letter goes, it's about time! I would hope the Colorado Oil & Gas Association will make available an 800-number for landowners' concerns to be heard. I question the County's ability, without considerable expense and staff, to enforce any regulations you might enact. I think it is a more proper function of the State. Besides, we landowners can't expect governments to hold our hands on every issue; we have to take some initiative! Sincerely, �� y Esther V. McCrumb End. cc . fit ; en; /34)e-c- S 40339 Sucu Snyder Gas Marketing,Inc. 1625 Broadway Suite 2200 March 21, 1994 Denver,co 80202 : . . _ 303/592-8500 Fax 303/592-8600 To Our Royalty Recipients: We are writing to inform you of an important matter that could impact your royalty payments. As you know, over the past three years, Snyder Oil Corporation ("SOCO") has been conducting a very active development drilling program in Weld County, Colorado. During this period, SOCO has increased its commitment to not only being the best oil and gas operator in Weld County, but also to being the best possible corporate citizen in Weld County and other communities where SOCO has operations. In this regard, SOCO has been a pioneer in establishing and promoting the following: • Establishing a landowner's "help line" at SOCO's Evans office (303-339-1794); • Conducting regular landowner meetings which continue to encourage communication with both mineral owners and surface owners; • Working closely with the Colorado Oil and Gas Association ("COGA") to establish a code of conduct; • Supporting reasonable and responsible legislation which increases the authority, effectiveness, and enforcement capability of the Colorado Oil and Gas Conservation Commission; • Thoroughly training both SOCO employees and subcontractors to consistently recognize and consider the concerns of both surface and mineral owners; • Investing significant dollars to experiment with leading edge technology which will mitigate the impact of SOCO operations on the lands as well as increase SOCO's efficiency; and • Establishing and maintaining throughout SOCO a keen awareness of the competing property interests within Weld County by fostering a continual focus to respect both the surface and mineral owners' rights in relation to our operations. In spite of these genuine efforts, SOCO continually faces additional layers of government regulation that hamper the ability to profitably produce oil and gas — natural resources which are critical elements of the United States energy independence. Most recently, proposed amendments to Weld County's zoning ordinances and building codes represent ee en; 6 rcc_943339 Royalty Recipients March 21, 1994 Page Two regulations which we believe will substantially restrict SOCO's ability to continue its development in Weld County. THESE REGULATIONS AFFECT YOU. If adopted in its proposed form, they could result in shutting-in certain SOCO wells. Further, if you are entitled to royalties on minerals which have not yet been drilled and produced, it is possible you may never receive such royalties, due to the adverse economic impact these regulations pose on SOCO's development program. The proposed regulations both duplicate and exceed the Colorado Oil and Gas Commission Rules and Regulations and attempt to control every phase of oil and gas development in Weld County. They also will require a "special use permit" for every single well drilled in the county. As a SOCO royalty owner, we urge you to obtain a copy of these proposed regulations and investigate their possible effect on you. We respectfully request that you call or write all of the Weld County Commissioners and strongly object to these regulations in their proposed form. We encourage you to remind the Commissioners of the value of the oil and gas income not only to the local community but also to you personally. The Weld County Commissioners have scheduled an informal hearing on April 4 1994, at 7p.m., in the Commissioners Meeting Room of the Centennial Building at 915 10th Street in Greeley. It is critical that you notify the Commissioners of your objections in advance and also make every effort to attend. Weld County Commissioners may be reached at (303) 356-4000, extension 4200 or at the Weld County Courthouse, P.O. Box 758, Greeley, Colorado 80632. The Commissioners are George Baxter, Dale Hall, Connie Harbert, Barbara Kirkmeyer, and Bill Webster. We appreciate your support and the confidence which you have placed in us, and will continue to make every effort to live up to your expectations in the future. SNYDER OIL CORPORATION 940339 THOMAS H. CONNELLY OIL,GAS&MINERAL PROPERTIES - 518- 17TH STREET SUITE 1000 DENVER.COLORADO 80202 , ti TELEPHONE 303-825-3688 March 25, 1994 - . - FAX 303-825-2531 Weld County Commissioners Weld County Court House P.O. Box 758 Greeley, CO 80632 Ladies and Gentlemen: I have been active in oil and gas exploration in Weld County off and on since 1970. I have spent many a dollar in leasing and buying royalties from Weld County landowners as well as participating in numerous drilling ventures. Your proposed methods will ruin many people and small operators who have spent time and money in the orderly development of Weld County oil and gas resources. Please give the self-policing Code of Conduct as proposed by the Colorado Oil and Gas Association a chance to work. Y du s very rul , 1(hi L o as H. Connelly a member of Colorado Oil and Gas Association THC:cw CJ Pe oz? eorl j Ili_ 940339 n. r / �' �' �y , / 7 `7' y ,/ ; ff L C-7 L_,-(„c-o,- /-c k `) I-/(, c_L-( i2 , "Z--)'`—C- !!/--1_ i' l -Z:1, -1--"/ 2 = :- > —c L II-t ic � L C � y z ` C r r<l ii 1 // / - (I . 1 c !C ' C vv / _ 1 c C . ! 7.r 1'1 ' t ,- C C (! / il ,L' =c -c C., �l-c �rJ / '�' . 1; \ 1, - "LF_ t Z.L (�, i�Yl2 L'�Z < iJ Iii �' _ it _G. �Ct n L _ %i, r Z'� 7` _' v. c� '/c" (r -/ —T ' ' t Li— C L - L- --L C_( / z p 2 .Z LZ �-c 6` - L `c,t L CG: Pe; Cn; /ft ; %nrC 940339 3765 South Jersey Street Denver, Colorado 80237 . 't March 2$, 1994 Weld County Coririissioners Weld County Courthouse P .O. Box 758 Greeley, CO 80632 Dear Commissioners: I am a land owner in Weld County. The royalties I receive from oil and gas wells are a vital part of my livelyhood. I must object to these regulations recently proposed which will be discussed April 6, 1994. I am unable to attend. Sincerely, . t - ti4 Lilt12-44.e-h _..?(2 CSC PI", ell #4-' 6o«. 9.1)339 iht nic / '7i/ (PM frie4,R-c- er yt- 1-2 tel Z7:41 V / '"L'Et/ ti"' & 1{ et- GlG £ c u 4( ?{;CAC( i L � Y 711A-4/ Eta--(/1 G 1'l ; �L CGG, &4(tz 74 d' ,t tLG( // L'l {' /' L/ Cti�r Z /�72/ti �k «y( /( E„ 724.0 'tf! v ,i'LLT. ' .r LfLG{i/�� / 7'7L t1 ..I/,..-C'Lt r 'J"�yzix,..'.�� (74,c;) LUY1lIL , '1'�-F� G:27/'J,eAt it C .;y- ‘';' . /74)-- -14 / 1��yt-C . �. i t �'�'-b J4 447' e/1 I,$ eJ'r`x tl L lC ,C��t''.,Lin iii—t:G(r7 and * ' , cl' e 7 �� / ' 9tc A,,,-t1 %�fb-t. L f k-i(.,-6 tike Lt..4- z ajeL,czAtir��^ ci7, C ££ It 9c G a/J e.c ; Pt ; OF; flz 14y413339 Virginia W. Horn 2460 East Long Lane Littleton CO 80121 March 28, 1994 Weld County Commissioners Mssrs. Baxter, Hall , Webster Mdmes. Harbert, Kirkmeyer P 0 Box 758 Greeley CO 80632 Msdmes and Mssrs: I have just become aware that there are proposed regulations by the County Commiss- ioners to "control every phase of oil and gas development in Weld County" , including "special use permits" for every well drilled in the County. We have not yet been priviledged to see these proposed regulations, so I wonder why these have not automatically been sent to every Weld County property owner. No doubt every property owner in Weld County will be adversely effected by these regulations, and you have at least given the appearance of trying to do something "behind our backs" , especially those of us who are absent owners. Our Millensifer Farm at 13540 Highway 85 has been in our family since before 1910. Purchased and lived in by my Grandfather, it has one of the few two-story adobe houses in Colorado --- an historic structure which we continually try:to improve and upgrade. These funds for improvement come directly and/or indirectly from the oil and gas income. The first well was drilled by Amoco on our property in the early 70's. Just about 18 months ago we signed an agreement with Elk Petroleum and Snyder Oil for two more wells with each company. Snyder Oil drilled in late 1992, and Elk has scheduled to drill in the near future. The proposed regulations (as I understand them) will seriously curtail the opportunity for us to maintain or improve oil and gas income from our property. Since I have not had an opportunity to see or read the proposed regulation, perhaps this is inaccurate. Would you please send me a copy of these regulations? Be advised however, that the adoption of any regulations by Weld County Commissioners which adversely effect oil and gas income - present or potential - from our Millensifer Farm will be met with immediate legal action. I believe present State and Federal regulations adequately control oil and gas production. In effect, these present regulations have already curtailed domestic production - in such a crucial time as when we need to be working harder for domestic independence. Sincerely, 622 .2.6-A-`A/ ��, Virc6Xia W. Horn vw/pr oe ; "G; /It; 1300 916339 TOM A. MILLENSIFER 9653 WEST ARLINGTON AVENUE LITTLETON, COLORADO 80123 March 27 , 1994 Weld County Commissioners Mssrs . Baxter , Hall , Webster Mdmes . Harbert , Kirkmeyer P .O. Box 758 Greeley, CO 80632 Mdmes and Mssrs : We have just become aware of proposed regulations by the County Commissioners to "control every phase of oil & gas development in eit Weld County" , including "special use permits" for every drilled in the County. We have not yet been priviledged t oe not see these proposed regulations and wonder why these automatically been sent to every Weld County property owner . It is likely that every property owner in Weld County will be adversely effected by these regulations , and you have given the appearance of trying to put something over on us , especially those of us who happen to be absent owners . The Millensifer farm at 13540 Highway 85 has been in our family since before 1910 . It has on it one of the few two-story adobe houses in Colorado, an historic structure which we continually try to improve and upgrade. Some of the funds for improvement come directly and/or indirectly from oil and gas income. Amoco drilled the first well on our property in the early 1970 ' s . About 18 months ago we signed an agreement with Elk Petroleum and Snyder Oil for two more wells each, a total of four . Snyder drilled in late 1992 while Elk is scheduled to drill in the near future . As we understand the proposed regulations , unfortunately without the the opportunitY to read them at writing, opportunity for us to maintain will sly or improveoileandu curtail gas income from our property. Be assured, however , that the adoption of any regulations by the Weld County Commissioners that adversely effect oil and gas income , present or potential , from the Millensifer Farm will be met with immediate legal action. We believe present State and Federal regulations adequately address oil and gas production, and in effect have already caused enough curtailment of domestic production when we need to be working harder for domestic independence . 4,4, a Tom A. Millensifer �'c p` `'� ; �L % 940339. 4/ant° 7w*,Y- /2 as / lt A-t Q4. ` �rr�ri i a wz/ , �J2vL ZecS 45 7 7 0,4 ALAc.�; rFc Mr. a Carl Wens 1608 W. Olive Bolivar, MO 65613 (417)326-6781 3/,,25 / s / ..S v IL-14/Yz-7/2,-; Mr.+W !arl Wens C q 7 1608W.0live 1 W Q ° Bolivar,MO 65613 Ca_ 2 �e gG; C./9- 'It ;• � e %3 March 25, 1994 Commissioner Webster, I am opposed to "Weld County Oil and Gas Regulations" (DTD 3-3-94) . Because if the industry's approximate 20 percent share of the county's property tax disappears, the amount will need to be made up from higher taxes elsewhere, or county services will be cut back. We also depend on the income every month. Your ruly �� Green Ridge Builders, Inc. Leroy Gabriel 1804 Silver Leaf Drive President Loveland, Co. 80538 Green Ridge Builders, Inc. ad /oz. fie• ern .6efCG 943339. • • • n: r Marc.' � 17q4 4 : ''ice.:� PE:: weld Lour.tv and Gas Reg a.tion To We _,oun,t`/ Commi=ssioners _titter= hare teen mailed out Py LOCO. Prima and Basin oil a'; ; of which I fee' are coercion in nature. I feel the intent of these ' titter= is to imply to t if I don't out pressure on my elected officials these large companies will stop ;ova'. it\ payments and/or shut wells in . As a landowner, royal ity recipient and taxpayer of Weld County I wish tc state CQN i r''rlh'v to the wishes o- the oil and gas companies that I indeed support you 10 in your action reguarding 11Weld County Oil and Gas Regulations DID ' peel it is due time that the drillers and oil companies Pay for the actual damages they are causing . These damages include tox supported roads , structures and private Property jr Weld County. Thus, I encourage you to take action . now. . Remain ,/ xv7 / ri l.k,;EFJ.Go 9O4343 U (Y e, : /9L- H en ' A - 940339 �� L ( 4 ' _Z - 4r`jt ___o_Ltzega-Pri oo-n 6r---fr .-tri-ei -"ert-___&___Cl--42,ed____-__*-- e zi ttoeC_.G- G,, =y /1Ze m.'-e4lat_nle-j __2r141_ 'S...5t-i-s-t-1-AL, -- r . 4 taJ- - — kr L 940339 March 28, 1994 . Weld County Commissioners,915 10th Street , Greeley, Colorado. We feel the oil Company ' s have been very good to Weld C County . We are with Snyder Gil Company and know they have been most reliable and cooperative in their drilling operations with both laud owners and mineral rights owners as well as the county. We are against any legislation that will further limit and interfere with their drilling operations in We' d County and our state. Edwin and Olga Weigand Alt 70e /O PG if L GR • eace- 940339 .!/' L/ 691 /y7y ova ( &ill) (-‘bill/ 1 55/ tit/ �J , ,<4j lc� 4/17-,&) I � 7 ,,e, �17 „fS /`. /2 ( ,zc„I, 7,ae ,,, i(; ,'j j ,1;c � CcnV �4,� ,,, Co � IC 4 le 7 << ze,7 / x s h�y 6,,/4' , c1,s L r&& ./j�,�y .� �� / / /1 (c'l,C u l i� ) c , I, 2e2, •� q h61,14.. i 41 i �, . CC q., t� / �C v �, / s j�t� , 1�`1 y.:(/ Ol-. ( , S, ,, 7�c C6' C � «dYY / <L, - -1 � .L-/ �S e€ei,i- ,57- it G alee .f � ,/ � e� e� �J � elc �r �� '�- .�cr/ / c Z� 111 fit ALL � /�// j IAe, t✓v 5 �. XI/„. �G I _ r/�,.� �i.f, "le'c// -./ c y S V" E A /-a, G 7 7 �.SI (In CC G�'� CU"( /it� , 'r rcel.7r� o II o-�c l'S ca, , / t </ e� 1 .�- // Qz, / . y 5 , f/� � ./3r-,-�c c l y i-ze 9 '' / "%I/ ' g r.y4/ /it/ . " / Al— le ACei e_ C L -el -7,,5', o : r [t/11 /-cc, . E- le Ih ,- , 4 PI I :1 CC ,tee'c%5 t —1I,''e h tick (.(_,.,./,'I / / c , / �L� I -Ce_ ; Pty CA- , /ft LOG 9403,12 tit Lz‘,� if ft C. hcc. he 1 £�( / e, , [ , 4�� / Jqke I , / / �c 5 / //// tieec 1.' 6 C� � ell ://eSo- � f i/ /U4all/r, /14 5/ if $ //1/ f��lc A / cc/i7C.•P ' I � /z S° S/ r /'CCM � �J« /CII E /A /I('re �S 11 L .7 t� .10 / �- in,'/, ,^)/fl i-,7 [c��I I. ��L I�IPtY1 E'7 1g /7='f �c'c� �� , e lI •.S ��ru,, f fc, / E. i / /le,� 7 i J,,J: 1 CJ Jr/7 .77E ry / ��// fe,.4/ 4J, /Al�� J�� fit- Lc)�/�4 Q/`e4f/ ec/ d !"c'‘,-q el 2e1 A/,',,,„un t' J fie,czx //cYj t4-(fr ' cj ////4 ' 4 (c 9 7s--/ 7,5 . r4,, t/ << < < F czlz J ,/ ,s U{/ Ices/ c.,,41 — t`i 1 1y% J , ' y/ 7/ Cc7? [(/ h5 e, /6,1, ‘,4-; it/5 / j ,Ii . c //�Ilc4t f�4��° �C 4 fc c/ Ic"E<, J ,�� 7 ,q/__ :;',2/ Ifk n e-- cr/C re .Ae,,,,_..5, 94 339 i b ?� OFFICE OF COUNTY ATTORNEY PHONE(303)356-4000 EXT.4391 P.O. BOX 1948 �� 1111 GREELEY, COLORADO 80632 !Ripe COLORADO March 18, 1994 Floyd Robertson Colorado Interstate Gas Co. P.O. Box 1087 Colorado Springs, CO 80944 RE : Informal Hearing Regarding Oil and Gas Regulations Dear Mr. Robertson: The Board of County Commissioners will hold an informal hearing regarding the draft Weld County Oil and Gas Regulations on April 6 , 1994 at 7 p.m. in the Hearing Room of the Centennial Center, 915 Tenth Street, Greeley, Colorado, at which time you may be present and give testimony regarding the proposed regulations . Thank you for your attention. very/ my yours, L 0(49077/&1/{47-1.-- ison Assistant Weld County Attorney LDM/gb: oghear pc Clerk to the Board 940339 Oil & Gas Distribution List 3/14/94 Ms . Micki Hackenberger Colorado Counties , Inc . 1177 Grant Street Denver, CO 80203 Mr. Geoff Wilson Colorado Municipal League 1660 Lincoln Street, Suite 2100 Denver, CO 80264 Mr. George Monsson City of Greeley 1000 Tenth Street Greeley, CO 80631 Mr. Maurice Lyle Dechant Mesa County Attorney P.O. Box 20000-5004 Grand Junction, CO 81502-5004 Mr. Larry Hoyt Boulder County Attorney P.O. Box 471 Boulder, CO 80306 Mr. Kane Graves LaPlata County Attorney 1060 2nd Avenue Durango, CO 81301 Board of County Commissioners Morgan County 231 Ensign Street Ft. Morgan, CO 80701 Larimer County Planning Department P.O. Box 1606 Ft. Collins, CO 80522 Rick Samson, Esq. (Town of Frederick) 1880 Industtrial Circle Longmont, CO 80501 John Evans, Esq. General Counsel (Front Range Land and Mineral Owners Assn. ) 6300 S . Syracuse Way, # 555 Englewood, CO 80111 Russ Anson, Esq. (Front Range Land and Mineral Owners) 820 13th Street Greeley, CO 80631 940339 Mr. Dennis Hoshiko 31641 WCR 41 Greeley, CO 80631 Mr. Ray Christenson Colorado Farm Bureau P .O. Box 5647 Denver, CO 80217 Mr. Ivan Grine Colorado Farm Bureau 16300 E. 168th Avenue Brighton, CO 80601 Mr. Bruce Johnson 801 8th Greeley, CO 80631 Ken Wonstolen, Esq. Gerrity Oil and Gas Corporation 4100 E . Mississippi Avenue, Suite 1200 Denver, CO 80222 Mr. Wes Potter Con Agra Red Meat Companies P .O. Box G Greeley, CO 80632 Mr. John Longwell PRIMA 1801 Broadway, Suite 500 Denver, CO 80202 Jeff Welborn, Esq. (Colorado Oil & Gas Association) 1700 Broadway, # 1820 Denver, CO 80290-1801 Phil Clark, Esq. Holme, Roberts & Owen 1700 Lincoln, Suite 4100 Denver, CO 80203 Kersey Young Farmers c/o Platte Valley High School 510 Clark Kersey, CO 80644 Ms . Sandra Eid Sierra Club Rocky Mountain Chapter 777 Grant, # 606 Denver, CO 80203 940339 Mr. Erik Carlson Associated Natural Gas , Inc. P.O. Box 5660 Denver, CO 80217 Mr. Jim Kennedy K & N Front Range 635 N. 7th Brighton, CO 80601 Mr. Todd McCormick 17267 WCR 25 Platteville, CO 80651 Mr. Rich Griebling Colorado Oil & Gas Commission 1580 Logan Street, # 380 Denver, CO 80203 Mike Morgan, Esq. (North American Resources Co. ) 950 S . Cherry, # 900 Denver, CO 80222 Ms . Ellen R. Baker, Mayor Pro Tem City of Fort Lupton Box 148 Ft. Lupton, CO 80621 Ms . Carol Haught 11760 WCR 49 Hudson, CO 80642 Ms . Celia Fitch 3451 N. 95 Boulder, CO 80301 Mr. Dennis Page 11651 WCR 62 Greeley, CO 80631 Mr. John Kunzman 10952 Hwy 85 Ft. Lupton, CO 80621 Mr. Jim Hill 17926 WCR 19 1/2 Platteville, CO 80651 Mr. Bill Crews Crews & Zeren 1223 28th Avenue Greeley, CO 80634 94339 Mr. Jim Brown Colorado Corn Growers Association 22 Harding Johnstown, CO 80534 Mr. Mike Taugher Greeley Tribune 501 8th Avenue Greeley, CO 80631 Mr. Bob Bernd KFKA Radio 820 11th Avenue Greeley, CO 80631 Michael W. Gutterson 26780 WCR 36 LaSalle, CO 80645 The Honorable Bill Jerke House of Representatives State Capitol Building Denver, CO 80203 The Honorable Don Ament Senate Chambers State Capitol Building Denver, CO 80203 Mr. Alex Woodruff Independent Petroleum Assn of the Mountain States 518 17th Stgreet, Suite 280 Denver, CO 80202 Ken Lind, Esq. 1011 11th Avenue Greeley, CO 80631 Mr. J. Mark Hannen Douglas County Attorney 101 Third Street Castle Rock, CO 80104 940339 6 tilt I,,11; OFFICE OF COUNTY ATTORNEY PHONE(303)3564000 EXT.4391 P.O. BOX 1948 GREELEY, COLORADO 80632 ■ C. COLORADO March 4 , 1994 1- 2- : The draft Weld County Oil and Gas Regulations are enclosed for your consideration. Should you wish to make written comments, please do so to the Clerk to the Board of County Commissioners, P.O. Box 758, Greeley, Colorado 80632, within the next 20 days . The Board of County Commissioners will be holding an informal hearing on these regulations, and you will be advised of that hearing and may make oral comments at that time. Should the matter continue to formal adoption, you would have the opportunity to comment at the Planning Commission or any of the at least three formal hearings in front of the Board of County Commissioners . All comments, whether at the formal or informal hearings or in writing, will be made a part of the legislative record. If you wish to purchase copies of existing County regulations referenced in the proposed O&G regulations, contact the Weld County Department of Planning Services to puchase them. The costs of these items will be: Weld County Zoning Ordinance - $16 . 50 plus $3 .50 shipping; Weld County Building Code Ordinance - $3 plus $2 shipping; NFPA 30 - $2 plus $2 shipping. Thank you for your interest in these matters . Very truly yours, Lee D. Morrison Assistant Weld County Attorney LDM/gb:draftreg Enclosure 9•� ^ Oil & Gas Distribution List 3/4/94 Ms . Micki Hackenberger Colorado Counties, Inc . 1177 Grant Street Denver, CO 80203 Mr. Geoff Wilson Colorado Municipal League 1660 Lincoln Street, Suite 2100 Denver, CO 80264 Mr. George Monsson City of Greeley 1000 Tenth Street Greeley, CO 80631 Mr. Maurice Lyle Dechant Mesa County Attorney P.O. Box 20000-5004 Grand Junction, CO 81502-5004 Mr. Larry Hoyt Boulder County Attorney P .O. Box 471 Boulder, CO 80306 Mr. Kane Graves LaPlata County Attorney 1060 2nd Avenue Durango, CO 81301 Board of County Commissioners Morgan County 231 Ensign Street Ft. Morgan, CO 80701 Larimer County Planning Department P.O. Box 1606 Ft. Collins, CO 80522 Rick Samson, Esq. (Town of Frederick) 1880 Industtrial Circle Longmont, CO 80501 John Evans, Esq. General Counsel (Front Range Land and Mineral Owners Assn. ) 6300 S . Syracuse Way, # 555 Englewood, CO 80111 Russ Anson, Esq. (Front Range Land and Mineral Owners) 820 13th Street Greeley, CO 80631 940339 Mr. Dennis Hoshiko 31641 WCR 41 Greeley, CO 80631 Mr. Ray Christenson Colorado Farm Bureau P.O. Box 5647 Denver, CO 80217 Mr. Ivan Grine Colorado Farm Bureau 16300 E . 168th Avenue Brighton, CO 80601 Mr. Bruce Johnson 801 8th Greeley, CO 80631 Ken Wonstolen, Esq. Gerrity Oil and Gas Corporation 4100 E . Mississippi Avenue, Suite 1200 Denver, CO 80222 Mr. Wes Potter Con Agra Red Meat Companies P .O. Box G Greeley, CO 80632 Mr. John Longwell PRIMA 1801 Broadway, Suite 500 Denver, CO 80202 Jeff Welborn, Esq. (Colorado Oil & Gas Association) 1700 Broadway, # 1820 Denver, CO 80290-1801 Phil Clark, Esq. Holme, Roberts & Owen 1700 Lincoln, Suite 4100 Denver, CO 80203 Kersey Young Farmers c/o Platte Valley High School 510 Clark Kersey, CO 80644 Ms . Sandra Eid Sierra Club Rocky Mountain Chapter 777 Grant, # 606 Denver, CO 80203 940339 Mr. Erik Carlson Associated Natural Gas, Inc . P .O. Box 5660 Denver, CO 80217 Mr. Jim Kennedy K & N Front Range 635 N. 7th Brighton, CO 80601 Mr. Todd McCormick 17267 WCR 25 Platteville, CO 80651 Mr. Rich Griebling Colorado Oil & Gas Commission 1580 Logan Street, # 380 Denver, CO 80203 Mike Morgan, Esq. (North American Resources Co. ) 950 S . Cherry, # 900 Denver, CO 80222 Ms . Ellen R. Baker, Mayor Pro Tem City of Fort Lupton Box 148 Ft . Lupton, CO 80621 Ms . Carol Haught 11760 WCR 49 Hudson, CO 80642 Ms . Celia Fitch 3451 N. 95 Boulder, CO 80301 Mr. Dennis Page 11651 WCR 62 Greeley, CO 80631 Mr. John Kunzman 10952 Hwy 85 Ft . Lupton, CO 80621 Mr. Jim Hill 17926 WCR 19 1/2 Platteville, CO 80651 Mr. Bill Crews Crews & Zeren 1223 28th Avenue Greeley, CO 80634 940339 Mr. Jim Brown Colorado Corn Growers Association 22 Harding Johnstown, CO 80534 Mr. Mike Taugher Greeley Tribune 501 8th Avenue Greeley, CO 80631 Mr. Bob Bernd KFKA Radio 820 11th Avenue Greeley, CO 80631 940339 '•'_1._D CCU :TY Steering Committee Spindle Field Royalty owdasri 27 ! 1 9: 4W May 22 1994 CLERK TC) THE B U.D Basin Operating Company 370 17th Street, Suite 1800 Denver, CO 80202 Attn: Mr . Dan Schwartz, This communication is in response to your letters of Dec. 20, 1993 and April 12, 1994 (George R. Neely) . The information in those communications did nothing more than create more concerns related to the items discussed with you on November 10, 1993 . The following are items that we feel need more specific attention and answers: 1 . Metering: To the best of our knowledge the gas/oil products being removed from our properties are not adequately metered on a regular basis and therefore royalty owners are not really aware of production rates from our wells as these materials are "pooled" into one line and delivered to a processing plant west of Ft . Lupton. How do we know that we are being compensated for all pro- ducts that leave our properties as there is no metering system on the property. In your purchase/seller agreement(Basin/ANGI/ATTCO) Appendix Page 7 .B item 8, and Page 8 .B item C, the language speaks of metering. We would like to have the following information: A. where are the gas/oil products metered and how often? B. Records of the semi-annual Buyer/Processor cali- brations (metering) since Basin Operating Company/ ANGI/ATTCO gained ownership of our royalties/wells as of Nov. 1 , 1991 . Again, there appears to be no controls or metering of these products. 11 . What about the condensates that are products of these wells? Our records (check stubs) make no reference to these products. We see only Gas(G) or oil (O) no other information. What records do we have to say that we are being compensated for ALL products being removed from the property? 111 . Pricing: Our contracts state that we will be paid the "prevailing market price" at the mouth of the well . The prices paid us have been well below "market price" . You have stated that your market is not the same as AMOCO' S which may be true, how- ever we fail to understand why you would take less than the market price for the products sold by as much as sixty to ninety percent . The questions we have in relation to this item are as follows: A. Are we being charged production costs? B. Are we being charged marketing costs? C. Are we being charged transportation costs? /J. Are we being charged for costs of running the gas plant? Since you claim to receive the same price as royalty owners, you should disclose your prices received per MCF Gas from ANGI during the time period from November 1 , 1991 up to the present time April 1994 . We would like to know why you have to deal with a market that pays so much less than AMOCO. In closing, you can see that your answers have not really supplied us with adequate information. Telling us that prices paid for our Spindle gas represents the current and historical market means little to us as we have no comparable information at this time . The concerns expressed in our November meeting relative to metering of production rates and pricing have not been adequately addressed. Sincerely, Spindle Field Royalty Owners Steering Committee, Ronald FlereWr 13515 Milwaukee Ct . Thornton, CO 80241 Robert E. Lewis 11717 Weld Co.Rd. 8 Ft .Lupton, CO 80621 Mary Leinweber 4686 Weld Co.Rd. 23 Ft .Lupton, CO 80621 Elton Miller 12251 Weld Co.Rd. 22 1/2 Ft .Lupton, CO 80621 Bill Gittlein 5877 Weld Co.Rd. 19 Ft . Lupton, CO 80621 George Stieber 11553 Weld Co.Rd. 6 Ft .Lupton,CO 80621 John Kunzman 10952 US HWY. 85 Ft .Lupton, CO 80621 Copies to: Colorado Oil & Gas Conservation Comm. , 1580 Logan, Denver CO. 80203 ANGI P .O. Box 5493, Denver, CO 80217 ATTCO P .O. Box 5493, Denver, CO 80217 Weld County Assessor P.O. Box 459, Greeley, CO 80632 WeLd Jaunt, Commissioner(s) Mr. Bill Webster G. Ronald Neely I,. Ruth Arm NeeZv 13515,Alolttn&cee Ct Denver ca 80241-1325 Basin Operating Company 370 17th Street,Suite 1800 Denver, 80 BASIN Office 30313/685-85-8000 Fax 303/685-8010 ,■ May 19 , 1994 Dear Interest Owner: Effective with April, 1994 Oil and Gas sales , Basin Operating Company will assume the responsibility for revenue distribution from Associated Natural Gas , Inc . (ANGI ) and Associated Trading and Transport (ATTCO) . This change is for wells Basin operates in the Spindle field. ANGI and ATTCO will still be purchasing the oil and gas , however they will no longer be issuing checks to you . This change is being made at the request of ANGI/ATTCO due to problems they have been experiencing trying o make allocations .tions . Most of these proper rt'ng to the Stateroduce into nandninteres which ownt s . allocated for p Per repo feels that can meet their processing deadlines with the time required longer make these allocations . The advantage to you is that, there d now able be fewer prior period adjustment on your check and you it think that communicate directly with Basin; as operator, if you there is a problem with your revenue. d issued the thO' s checks for h ANGI releasing theil oil sales ir gas checks on e the 31st.on Due 20th o of May,mpayments to Basin and to the time necessary to process Associated' s p ym and the fact that we will be issuing only one check with bo h o lb and gas, your revenue will be a little later than you accustomed to. However, your check will still be issued sooner than if ANGI/ATTCO had to delayed their processing by a month in order to properly allocate the production. lat er Basin ' s n ' s checks for April sales will be mailed to you expect your revenue to be released by the 10th of each succeeding month. We apologize for any inconvenience that this may cause. Hopefully this change will result in fewer prior period adjustments and better communication with all interest owner. Sincerely, Basin Operating Company Brad Davis Revenue Manager `i "�" � ��Q'g� c �(cA,lf+..V �� i AA< -✓JSJ2.tJC,CS G 1 5 27e9re.. 5 Z� . 1��2 y r2ig- r� 0. '? / :r ec Ti' r - C� (-- r/ r n c- \-1 / OU -^ //' .f/ M eta), pal C„ .112( L.' ( r Q ,4 GJZjA, v (,-)- (c . C� i c avnic S r 1rY\ F1,.0,- Iv" .�c r L�-r kid t %POKE gT /-/6192i0c My s ap) / ' os' ii\vDspi 6_7 fiig-,sty/v- 64 Co /orA- -1,7 a/ l 4" CoA}e- 'V4TLvP. 6,r./h LSSroh r ny; e n1 c /A) ] I j oci F, c oz, - I I �cc ,rvs �o /9n �,� �R.C / nn , lA�vo cwN w Ec, ///� o l �> l.0cui_�.SCT tt� o'F. �G -�Rsiz �n �o�✓ / gfa5iN O1 a ' 1 TC E F !,✓EBB as ( � ER w 2 2 90 - /Ye/ z7/0 �� (Itil / S 6 303 - e3o-- ;saa .��E� �� O Ca _y) D----/// • - r Kai c_..,,Az-cISS / , I GL O- a-Cer Ors C6c � E. )ca-e ma) Fp' ?LES.E �11 tio� Speak ,9T l-ls?eir26 PS-r-& 1.,equiR 533s PANEL DR. 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