Colorado Rising suit challenges constitutionality of oil and gas pooling

BROOMFIELD — Colorado Rising, a group that seeks to increase regulations on oil and gas operators, has filed a lawsuit on behalf of mineral rights owners in Broomfield that challenges the constitutionality of provisions of state law that allow for an industry practice called pooling.

Pooling — referred to by critics as “forced pooling” and by the oil and gas industry as “statutory pooling” — is a way for oil and gas operators to access underground minerals owned by another party.

Those other parties, who receive a royalty on the proceeds for oil or gas pumped from the ground, do not have to consent to the drilling operation. In Colorado the non-consenting mineral rights owners in a pool are paid a smaller royalty than those who consent to participate.

Part of the purpose of pooling, which was added to state statutes in the 1930s, is to ensure a small group of mineral rights owners who object to drilling cannot hold up an oil and gas project involving multiple rights holders.

Colorado Rising’s suit was filed in United States District Court.

“Under the current law, mineral owners’ only choice is to lease their minerals or have their minerals force pooled,” according to a Colorado Rising news release that accompanied the group’s lawsuit. “Thus, many mineral owners report that they signed leases under duress and would have preferred to have the right to decide when or if they monetize their minerals or to leave their minerals in the ground due to health, safety and environmental concerns.

Pooling requests by oil and gas operators, which have become more common in recent years due to advancements in horizontal drilling capabilities, are reviewed by the Colorado Oil and Gas Conservation Commission.

“The practice of forced pooling is in essence a taking of private property for corporate gain by order of the state,” Colorado Rising organizer Anne Lee Foster said in a prepared statement. “Forced pooling is a perfect example of Colorado’s antiquated oil and gas laws that must be updated in accordance with modern technology, including horizontal fracking and the practice of residential drilling.”

Oil and gas industry groups have come out against Colorado Rising’s suit.

“Pooling has not only stood on sound legal footing for nearly a century, but it is a critical step in energy development that now requires detailed communication among mineral right owners well before permits are ever filed,” Colorado Oil and Gas Association president Dan Haley said in a statement.

BROOMFIELD — Colorado Rising, a group that seeks to increase regulations on oil and gas operators, has filed a lawsuit on behalf of mineral rights owners in Broomfield that challenges the constitutionality of provisions of state law that allow for an industry practice called pooling.

Pooling — referred to by critics as “forced pooling” and by the oil and gas industry as “statutory pooling” — is a way for oil and gas operators to access underground minerals owned by another party.

Those other parties, who receive a royalty on the proceeds for oil or gas pumped from the ground, do not have to consent to the drilling operation. In Colorado the non-consenting mineral rights owners in a pool are paid a smaller royalty than those who consent to participate.

Part of the purpose of pooling, which was added to state statutes in the 1930s, is to ensure a small group of mineral rights owners who object to drilling cannot hold up an oil and gas project involving multiple rights holders.

Colorado Rising’s suit was filed in United States District Court.

“Under the current law, mineral owners’ only choice is to lease their minerals or have their minerals force pooled,” according to a Colorado Rising news release that accompanied the group’s lawsuit. “Thus, many mineral owners report that they signed leases under duress and would have preferred to have the right to decide when or if they monetize their minerals or to leave their minerals in the ground due to health, safety and…