Monday, May 6, 2013

Looking For Community Economic Boosts? Be Careful What You Wish For!

Map of oil and gas well sites in Northeastern Colorado

In The Sunday Denver Post, the two page article, ‘In Gung-Ho Greeley, Anger Wells Up Over Drilling Near Homes’ (pp. 1-2 B) we have a modern morality tale and cautionary note for any communities thinking they will “cash in” on the fracking or shale oil drilling craze sweeping the nation. The reason is that the immediate economic gains are rarely if ever balanced by the later humongous costs exacted on the communities.

The Post article notes that “for the first time in decades” the residents of Greeley, COLO. are now “fighting to keep oil and gas wells away from their homes”. Well, they ought to have thought of that BEFORE they let the Oil-Gas men in, believing that once they’d drilled beyond the confines of the town they’d leave the immediate urban environment and neighborhood locations alone. Well, it doesn’t work like that! Once the oil men had their fill (drilling more than 20, 000 wells in the region beyond Greeley- as noted by the map on p. 2B) they began encroaching on the town and then drilling inside it.

This is what transpires when a community that hitherto had “proved most receptive to oil and gas drilling” suddenly learns that the payback can be negative as well as positive. And so, the residents of Greeley's Fox Run neighborhood are up in arms, trying to prevent wells being drilled within 350’ of their homes.

Residents, if they’d checked the data (i.e. from the Colorado Oil and Gas Commission) ought to have seen their number was coming up. State data on such geological maps (shown on p. 2B) would have clearly shown over 20,000 wells were drilled outside Greeley in Weld County, while the city’s actual 47 square mile limits remained relatively untapped. This brought to mind for me what one Louisiana Oil man once told me over 45 years ago – when I took a college hiatus to work at a New Orleans Petroleum Corp.: “Thar’ Ain’t NO such things as Virgin Oil fields! That's an Oxymoron!”

Indeed, so that once “virgin” Greeley then had to get drilled once the land exterior to it had been emptied. There are now 427 wells in Greeley proper with “with plans to drill several hundred more”. Long term, the gung-ho city manager expects at least 1, 665 wells inside the city’s growth area. When Mineral Resources, Inc. launched its Fox Run project, no surprise that residents felt “blind sided”. Who wouldn’t? According to Ross Johnson, quoted in the Post article:

“I never imagined I’d have to worry about mineral rights and the potential for drilling right next to my home. I mean we are right in the city”

Hazel Stephens, quoted in the same article, was even more blunt:

"This is just getting out of control! An industrial zone does not belong in a residential area!"

And yet, as the Post notes, drilling technology pushes limits and lets companies drill right under homes.

This is no joke. As first time home buyers in Colorado back in 2000, we were astonished to see from the title/ deed that while we owned the home and putatively the land – yard, we did not own the “mineral rights” underneath it. The wording made clear that for any minerals found or discovered beneath our property, the state would have first ‘dubs’ in getting to it, or excavating it say by drilling.  We had absolutely no legal say in the matter.

You live here in Colorado, this is what you get! But most of us - when we buy homes in this beautiful state - gamble that our particular number will never come up. It may happen to others, but never us.

Well, the Greeley-Fox Run homeowners also made such bets, and they lost. But they aren’t taking it lying down now. They have formed the association “Greeley Communities United” to fight back and demand the oilers-frackers  back off and not pollute their air, water with carcinogens like benzene. (In 1985 the then Greeley City Council passed an ordinance prohibiting drilling inside the town but it was overturned by the State Supreme Court in 1992. The reason? No town or community had the legal basis to usurp the state's mineral rights which trumped all else.)

Most heart breaking to Fox Run residents may be to learn that while a new state buffer zone rule requires 500 ft. setbacks between wells and occupied buildings by August 1st this year, the distances can be set closer (350') if  Oil companies secure written consent from any property owners before then.

Meanwhile, Mineral Resources, Inc. has provided a palliative, in terms of  assurances,  that they will do their best to prevent the worst. According to one spokesperson quoted in the Post piece, "95 percent of methane and other air pollution will be captured to minimize potential harm". Also they will do their level best not to contaminate water so residents end up with prostate, breast, liver, colon and other cancers. So, I guess all the Fox Run people - especially on the anti-drilling association- ought to be thankful.

The real nasty news is that when the oil, natural gas finally runs out, as it surely must (as a finite resource) the home owners of Greeley will be left with homes worth only half or less the urban pre-drilling value, if that. Their community may have benefited from a short term economic infusion (thousands of jobs and $3.3 million in "direct economic gain") but at an immense long term cost.

Be careful what you wish for!

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