DENVER (CBS4) – Some Colorado lawmakers say cities that ban fracking should have to pay the owners of the mineral rights who are impacted, and the cost could run in the millions of dollars.
Opponents say it puts one group’s rights above another’s. But supporters say mineral rights are property, and cities that ban fracking are essentially taking that property without compensation.
When Bradley Beck bought his house in Erie 12 years ago, it came with a bonus property — the minerals below. He now gets a check every month from Encana, which has a well just a few blocks away. But that could all change if Erie adopts a proposed moratorium on fracking.
“If the moratorium goes in that potential for income, for inheritance, goes away,” Beck said. “If you own that property and mineral rights you should be able to develop in a responsible way, or be compensated some way.”
Rep. Perry Buck, R-Berthoud, agrees.
“I’m a strong advocate for private property rights,” Buck said.
She’s introduced a bill that would require a local government that prohibits fracking to compensate mineral rights owners for the property she says the government took.
“It’s like if someone wanted to put a highway in your front yard, the government would compensate you,” Buck said.
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“We need to have an even-handed conversation about this,” said Rep. Jonathan Singer, D-Longmont.
Singer opposes the bill, saying it ignores the surface rights owners whose property values he says are depressed by fracking.
“I want to be fair about this, and part of being fair is making sure that the surface rights owners also get the same kind of compensation,” Singer said.
Beck says Encana has compensated surface rights owners in his area by moving a well and giving the neighborhood money for a park. He says prohibiting fracking doesn’t just depreciate the value of his mineral rights, it renders them worthless.
“There are folks that are retired that are counting on those parcels for income in retirement,” Beck said. “How are they going to be compensated for that?”
In 2012 mineral rights owners in Colorado collected an estimated $614 million in royalties.
Buck’s bill is one of two at the Capitol dealing with compensation of mineral rights owners. Democrats say the bills should wait until an oil and gas task force appointed by the governor comes back with its recommendations.