Colorado Laws on Mineral Rights

By T.R. Miller, eHow Contributor

updated: April 15, 2010

Colorado is generally receptive to energy development, mining and drilling because it creates revenue for the state.

Like most states in the West, Colorado recognizes separate owners of surface rights and mineral rights, and that there are different private property rights associated with each. This is why an oil and gas company can drill on private land without a property owner's permission. The state of Colorado generally is receptive to the extraction of minerals that create energy, because it creates revenue for the state. The governor's office estimated that the state will bring in $2.7 billion between 2008 and 2019 from energy extraction. Because of that, there has been a substantial increase in drilling, particularly natural gas drilling, along Interstate 70 west of Glenwood Springs.

Surface Rights Vs. Mineral Rights

2. Typical real estate transactions may or may not include mineral rights with the purchase of the property. Oftentimes, the minerals under the property are sold, leased, or retained by previous owners. This is called a "split estate." That means one property owner---often the homeowner---literally owns the surface of the property, but not the minerals under the property.

It is not unusual for a private property owner to be unaware of who owns the mineral rights on their property or if the previous owners have leased the mineral rights to an energy company.

An energy company interested in obtaining the mineral rights under the land may ask the U.S. Department of the Interior 's Bureau of Land Management to lease the rights. Colorado recognizes that energy companies must go through the surface to get to the minerals below, so if the lease is granted, the company may drill on certain parts of the property. Sometimes, a company may try to purchase the entire property, including the surface and mineral rights.

Lawsuits

3. The Colorado Oil and Gas Conservation Commission is responsible for promoting oil and gas development throughout the state. It can also suspend energy development if a company violates its rules protecting human health, safety, and welfare. >From 1994 to 2000, the Commission took note of 110 violations, accounting for $1 million in fines.

Several citizen groups in and around Grand Junction in Western Colorado have asked the commission to halt drilling or reconsider allowing a company to drill, arguing the drilling is too close to homes or harms wildlife. Many citizen groups have opposed drilling on public lands. For example, 10 environmental groups filed a lawsuit in 2008 asking that the Bureau of Land Management suspend its resource management plan and that the agency be forbidden from issuing more mineral rights leases on the Roan Plateau in Western Colorado. The suit contended that continued drilling on the plateau would ruin the area, which is popular with hunters, hikers, and other recreation enthusiasts.

Policy Changes

4. Former Colorado Attorney General Ken Salazar originally was one of the politicians who supported the 2008 lawsuit to halt drilling on the Roan Plateau. Salazar became the head of the U.S. Department of the Interior in 2009. In January 2010, Salazar changed federal policies allowing for more scrutiny over how oil and gas leases are awarded on public lands.

Protection for Property Owners

5. Property owners can contact the COGCC with complaints. It is not the COGCC's responsibility to force energy companies to compensate property owners for economic losses because of drilling. However, many energy companies voluntarily offer some compensation to land owners.