Colorado state parks mull opening up for oil, gas drilling
November 26, 2010
DENVER, Colo. (AP) – Colorado’s state parks may be tapped for oil and gas extraction if other strategies to replace dwindling state funding don’t work.
That’s one of the suggestions in a five-year proposal to cut costs and keep the parks running and would be considered only if other measures don’t work. State Parks has already dumped 12 full-time jobs, trimmed salaries and raised fees for camping, reservations and boat registration.
Other suggestions are removing four parks from the 42-park system and expanding cost-sharing arrangements with other agencies and private groups.
“We’re just like any other entity,” said State Parks spokeswoman Deb Frazier. “We are looking at other ways to help with our income.”
Although visits to state parks are on the rise, reaching 12 million in 2009, state funding to the park system has been steadily shrinking. In 2009, State Parks got $6.7 million in general funds, while this year the contribution dropped to $2.6 million. Next year, it’s likely State Parks will get nothing, according to a draft five-year financial plan recently provided to the Colorado State Parks Board.
The agency’s contemplation of oil and gas drilling was first reported in the Fort Collins Coloradoan. The board is likely to take up the issue again in January, Frazier said.
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State Parks owns about 22 percent of the 225,260 acres it manages and, because of a split estate, owns very few of the mineral rights under the land. Other state and federal agencies own the rest of the land.
A split estate means that surface uses, such as land and water, belong to one owner, while underground uses, such as oil, gas and mineral extraction, belong to another. Managers are determining what mineral rights State Parks owns and whether they could be leased for oil and gas development.
The mineral owner or leaseholder has the right to the reasonable use of the surface to extract the minerals.
“As Colorado State Parks acquires land, the agency tries to acquire the mineral rights,” Frazier said.
Any lease on land owned or controlled by Colorado State Parks would require close scrutiny of well siting, well pads and restoration, and provisions for habitat and water-quality protection, Frazier said. “In short, the lease would seek a small footprint and minimal ecological impact.”
By negotiating with outside owners of mineral rights to locate wells inside parks, Frazier said, the state may be able to reach more favorable financial terms than if the owners directionally drilled from adjacent properties.
“State Parks would still receive royalties from (directional drilling), but it would be significantly less than anything the agency could directly negotiate,” she said. “Colorado State Parks would also not have any input in negotiating a surface-use agreement on other land – and this could impact our visitors.”
State parks receive money from the state Severance Tax Trust Fund, about $4.5 million in fiscal year 2008-09. The trust fund is expected to contribute $7.7 million to the parks budget for 2011-12.
There is already some limited drilling at Barr Lake State Park near Brighton, where mineral rights are not controlled by State Parks. Texas American has a producing gas well there. “Three other older wells aren’t producing, and the lease holder is evaluating whether it will produce again,” Frazier said.
Other companies, she said, are interesting in drilling at St. Vrain State Park, east of Longmont. Several companies have bought up oil and gas leases around the park, which is smack in the middle of an area brimming with oil and gas wells.
The state has no idea how much money that oil and gas leasing could bring in. That would depend, said Frazier, “on the extent of the resources, the mineral-rights ownership and the industry interest in developing the energy resources.”
State lawmakers say any oil and gas development would have to be looked at closely.
“We need to be extremely cautious about this,” said Rep. Randy Fischer, D-Fort Collins. “Any sort of energy development, even solar and wind power, needs to be done in a fashion that preserves and protects the scenic values of the state parks.”
Still, Fischer said, the idea needs consideration since other agencies are looking at other revenue sources to mine.
However, Rep. Claire Levy, D-Boulder, remains skeptical.
“I understand entrance fees have to go up and operating hours and maintenance is being cut back,” Levy said. “But I would hate to see our parks – where people can go and recreate – be turned into another oil and gas drilling site.”