Boulder County Clashes with Crestone Peak Over Timing of Well Applications in Face of Lawsuit
Boulder County is clashing with oil and gas operator Crestone Peak Resources over the company’s application to the state to drill 110 wells while defending a lawsuit brought by the county in September.
Crestone applied for the permits earlier this month, despite an October decision by the Colorado Oil and Gas Conservation Commission to indefinitely postpone a hearing on the company’s comprehensive drilling plan until the suit between it and Boulder County is resolved.
That plan outlines Crestone’s proposal to drain below-ground hydrocarbons from 10 square miles that include county-owned open space along Colo. 52 through multi-well pad horizontal drilling.
But Boulder County’s Sept. 25 lawsuit naming Crestone as a defendant claims the company’s plans for locating its well pads on county open space would violate the terms of conservation easements on those parcels, and that it is using oil and gas leases that are expired or would be violated by being pooled into such a large drilling project to establish its right to drill.
Crestone say it applied for the well permits to move forward drilling approval processes that are so far unaffected by the state commission’s postponement of the hearing, so in case the suit ends in its favor it can more seamlessly resume work on the project.
“This is not done with any sort of malice in mind. It’s really just trying to move the process forward. We’re just continuing to do what we can while we have the time to do that,” Crestone spokesman Jason Oates said, noting the comprehensive drilling plan process is voluntary for oil and gas operators.
Drilling companies can simply apply for drilling and spacing units and then the well sites instead of providing the long-term overview for drilling in an area in a comprehensive drilling plan.
“It’s not intended to be a mechanism for governments to use against the operator. It’s supposed to be a collaboration tool,” Oates said of the comprehensive drilling plan process.
The state commission’s decisions on Crestone’s applications for drilling and spacing units were postponed indefinitely along with the comprehensive drilling plan hearing.
“We can’t speculate on Crestone’s motives, but it seems peculiar for an operator to file permits to drill while we’re in the middle of litigation over the proposal and when there aren’t even drilling and spacing units established,” Boulder County Chief Planner Kim Sanchez said.
Oates said his company has asked Boulder County District Judge Thomas Francis Mulvahill, who is presiding over the case, to dismiss the suit.
“The suit is over issues that are moot until you have an approval (of the comprehensive drilling plan or drilling and spacing units). If you have a disagreement over a lease, or what the rights of the lease are, it seems illogical to sue on something that hasn’t been violated,” Oates said, calling the suit “frivolous.”
Boulder County officials disagree that the timing of the suit was inappropriate.
“We are very disappointed that Crestone is jumping the gun with these permit applications when our lawsuit raises important legal questions underlying the entire comprehensive drilling plan project,” Boulder County Commissioner Elise Jones said in a news release. “These applications are clearly premature and waste everyone’s time unnecessarily.”
The county has requested the state oil and gas commission indicate whether it will put the 110 well applications on hold or reject them as untimely.
If the state commission proceeds with the applications, the county will request a public hearing and likely ask it to reject the proposed wells.
There is a public comment period for the well applications ending Dec. 6 through Dec. 10, depending on the application for each well.
Residents who wish to submit comments to the state commission can do so online at cogcc.state.co.us/permits.html#/permits by clicking on the blue number to the far left of each entry.
The applications are for permits from the state commission, but any drilling proposals also will require local approval under Boulder County regulations.
Sam Lounsberry: 303-473-1322, firstname.lastname@example.org and twitter.com/samlounz .