Geology Reference
In-Depth Information
Finally, horizontal drilling also has uses other than for hydrofracking. It can be
used to install utility lines that cross beneath a city, road, or river, for example.
It is important to note that vertical and horizontal wells are subject to different
regulations. In the case of a vertical well, gas is taken from beneath a single piece
of surface property. Most states and territories have fairly straightforward mineral
rights rules that govern the ownership of gas or oil produced from vertical wells. In
the case of horizontal wells, a single borehole can cross beneath numerous pieces
of property, perhaps owned by people with differing agendas. In general, the royal-
ties from horizontally drilled wells are established before drilling begins through a
combination of government rules and often complex private royalty-sharing agree-
ments. But different states have different laws.
Like most Western states in the United States, for instance, Colorado makes a
legal distinction between surface property rights and subsurface mineral rights.
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This distinction is based on Spanish legal precedent (East Coast law, on the other
hand, tends to be based on the British precedent.) In Colorado—or North Dakota or
states, it is common for the minerals beneath a property to be sold, leased, or re-
tained by previous owners. But there is no law requiring owners to tell buyers about
the disposition of mineral rights; there have therefore been many cases in which a
buyer did not realize the previous owners had leased the mineral rights to energy
companies. In the early days of mineral exploration, this kind of situation reliably
led to disputes or even violence.
To obtain the right to drill under private property, an energy firm leases the min-
granted, the company can drill without the surface property owner's permission.
The Colorado Oil and Gas Conservation Commission (COGCC) is responsible for
promoting energy development, and tends to favor drillers because they generate
revenue for state coffers. Between 2008 and 2019, Colorado estimates it will earn
some $2.7 billion from energy extraction. The COGCC also fines drillers for viol-
ations of its rules protecting human health and safety: between 1994 to 2000, the
Commission collected $1 million in fines from 110 violations.
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But citizens groups worry that fracking will damage homes, harm wildlife, and
affect outdoor recreation, and have petitioned the COGCC to stop, or rescind,
drilling permits. This type of “resource war” will become increasingly common
as the population grows, the climate changes, and the demand for energy pushes
fracking into new regions.
