August 12, 2022


Let'S Talk Law

Boulder County seeks Colorado Supreme Court review in Crestone drilling dispute

Boulder County is seeking a Colorado Supreme Courtroom reversal of a lower court’s final decision that upheld Crestone Peak Resource Operating LLC’s correct to extract oil and fuel in the japanese component of the county.

Boulder County officials introduced Thursday afternoon that they had filed a petition with the state’s higher court asking it to assessment and overturn the Courtroom of Appeals ruling issued in May perhaps that claimed two of the company’s oil and gas leases of mineral rights remained legitimate in spite of 4-month gaps in oil and gas generation, according to a county information launch.

“It’s a important difficulty for the total point out,” Senior Assistant County Legal professional Kate Burke explained in a statement in the information launch. “Oil and gasoline leases continue to be legitimate as very long as generation carries on. But what does the word ‘production’ imply? The Courtroom of Appeals reported production includes shut-in wells that yield no oil or gas, that means operators can keep leases open without basically developing anything at all.”

However, Jason Oates, Crestone Peak Resources’ vice president for authorities affairs and community relations, wrote in a Thursday evening email that two courts by now ruled in Crestone’s favor just after listening to the case.

“I am confident, if the Supreme Court docket accepts Boulder’s request to listen to this case, the justices will concur with the two reduced courts’ rulings and rule in favor of Crestone,” he wrote. “A ruling in favor of Crestone would further explain the oil and gasoline industry’s lawful legal rights to create the strength methods of our point out in a safe and environmental dependable way.”

Boulder County sued Crestone Peak in 2018 arguing that its leases for the legal rights to minerals beneath homes along Colo. 52 north of Erie, such as county open up area properties, had legally expired due to a deficiency of oil and gas “production.”

The county alleged in its lawsuit, and proceeds to allege, that wells subject matter to two of Crestone’s oil and fuel leases had stopped generating, properly terminating Crestone’s leases. Nevertheless, the district court disagreed and granted a summary judgment to Crestone.

On May well 13, a Colorado Court docket of Appeals panel upheld a Boulder District Court docket decision that permitted Crestone Peak Means to continue on its fracking and drilling options.

According to the Court of Appeals viewpoint, the county’s appeal of the district court docket choice centered on the problem of what constitutes “production” beneath an oil and gas lease.

“We maintain that production implies able of developing oil or fuel in industrial portions,” the Court of Appeals panel claimed in its belief. “Thus, the district courtroom the right way concluded that Crestone’s wells hardly ever stopped generating and, as a result, the leases hardly ever lapsed.”

Burke, the assistant county attorney, mentioned Thursday that the Court of Appeals ruling “places Colorado in a small minority of states that sees it this way.”

She stated, “That is not very good coverage for Colorado.”

County Commissioner Claire Levy stated in a statement that “we’re happy that Boulder County can acquire the lead in aligning Colorado regulation with the vast majority of states and adopting a coverage that stops leases from staying extended, in some instances, indefinitely.

“This is an crucial query,” she explained. “It’s not only of interest to us in the County, it will influence landowners statewide.”

“People’s mineral non-public property must have precedence around oil and fuel companies’ profits,” County Commissioner Matt Jones stated in a assertion.

“We hope the Colorado Supreme Court will overturn the Court of Appeals and help correct this dilemma.”

“We inherited dozens of decades-previous leases with our open up room acquisitions,” County Commissioner Marta Loachamin claimed. “This is just just one of our critical efforts to keep an eye on our legal rights and guard house in Boulder County.”

Crestone Peak is envisioned to post a reply to Boulder County’s ask for for Colorado Supreme Courtroom evaluation of the Court docket of Appeals ruling, county officials said. The state Supreme Court docket will examine briefs from each sides and ascertain regardless of whether it will grant certiorari critique.

County officers said in their information release that ordinarily, the state’s highest courtroom only grants assessment of a very small share of the situations presented to it.

Even so, “We’re hopeful,” Burke mentioned, contacting the situation of the legal definition of creation “a incredibly meaningful 1.”