Boulder County asks Colorado Supreme Court to overturn Crestone suit ruling

BOULDER — Boulder County is turning to the Colorado Supreme Court in its efforts to keep oil and gas drilling activity out of the county.

The county is asking the state’s highest court to overturn a Colorado Court of Appeals ruling in its 2018 lawsuit that sought to block Crestone Peak Resources’ application to drill new well pads in Erie.

That suit was rejected a year later by a district court judge, a decision that was upheld by the Court of Appeals.

Boulder County, which holds mineral rights at the site, argued that leases at existing wells on the site should be considered invalid because production was stopped for about four months in 2014.

“A division of the court of appeals considers the meaning of ‘production’ as that term is used in oil and gas leases. The division holds that production means capable of producing oil or gas in commercial quantities. Applying this definition, the division concludes that two oil and gas leases never terminated because wells on the land subject to the leases never stopped producing,” according to the Court of Appeals decision issued in May. “The division therefore affirms the district court’s judgment, granting summary judgment to the defendant.”

Senior assistant Boulder County attorney Kate Burke responded to the decision in a prepared statement this week: “The ruling places Colorado in a small minority of states that sees it this way. That is not good policy for Colorado.”

According to county attorneys, the Colorado Supreme Court will now read briefs from both parties and decide whether to review the case. 

“It’s a critical issue for the whole state,” Burke said in a statement. “Oil and gas leases stay valid as long as production continues. But what does the word ‘production’ mean? The Court of Appeals said production includes shut-in wells that yield no oil or gas, meaning operators can hold leases open without actually producing anything.”

The county expects a decision from the high court on whether to take up the case to take months.

“People’s mineral private property should have priority over oil and gas companies’ profits,” Boulder County Commissioner Matt Jones said in a statement. “We hope the Colorado Supreme Court will overturn the Court of Appeals and help fix this problem.”

Boulder County has long fought to keep out oil and gas activity. 

A moratorium on drilling was put in place in 2012. It expired in 2017 and was reinstated in 2019 after the passage of SB-181, a law that allowed local governments more control over regulating drilling operations.

The same year, the Colorado Oil and Gas Conservation Commission decided to hold off on the final rulemaking process for SB-181 until Boulder County’s lawsuit against Crestone had been settled. 

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