In late January, anti-fracking organization Colorado Rising filed a suit in Broomfield in which it accused Colorado’s forced pooling policy of being borderline criminal.
The organization which grabbed headlines last year for their very vocal (and ultimately pointless) crusade to double the state’s oil and gas setback distance has now turned their attention to forced pooling. And why shouldn’t they? On paper, this often-overlooked oil and gas bylaw sounds very scary. After all, the word “forced” is right there in the title.
But exactly how menacing is “forced pooling”? Let’s find out.
What Happens When Someone Is ‘Force Pooled’?
Let’s kick off this answer with a disclaimer. Forced pooling is an extremely complicated process that can’t be thoroughly explained in just a few hundred words. That said, if you don’t have a degree in engineering or some advanced legal training, a “thorough” explanation of forced pooling will read like stereo instructions.
For those of us in need of a less jargon-heavy explanation, forced pooling goes like this:
When a mineral rights owner refuses to develop the deposits on their land for whatever reason, another interest can come along and compel the property owner to participate in mineral rights development.
In that event, the property owner is fixed with a bill for their share of the development. That sum is, more often than not, taken out of the monthly profits the project produces. One-eighth of that monthly total still goes to the property owner, and once the debt is paid in its entirety, the landowner being forced pooled begins to receive their full share.
In other words, being forced pooled isn’t like getting stuck with a bill. It means that down the line someone will force you to take a check.
Who Gets Forced Pooled?
Opponents of forced pooling would have their audience believe that it’s a cutthroat practice aimed at robbing landowners of either their peace of mind or the valuable minerals under their feet (or both).
Proponents of the new legislation have said as much. In a press release, Colorado Rising rep Anne Lee Foster wrote, “The practice of forced pooling is in essence a taking of private property for corporate gain by order of the state.”
This is one of those sentences that is technically true while being pretty far removed from reality. In large part, forced pooling is a corporate tactic designed to speed up production on previously stagnant tracts of land. Colorado Rising would have people believe oil and gas is coming for their property and that’s just not the case.
The Need for Reform
Admittedly, in scant few cases, an oil and gas company can compel a private citizen to participate in drilling via forced pooling. In these instances, the process is regrettable, and the need for reform is evident; but long-lasting reform begins when people have all the facts, not a scare campaign and a menacing-sounding buzzword.