Paul Bonnifield: No friends in business
September 5, 2012
The organizers and supporters of Citizens Supporting Property Rights better look at their whole card before entering a partnership with oil and gas companies. Remember, there are no friends in business. Citizens only are very minor partners whose value depends upon their usefulness to the major partner. The oil companies will pay the fiddler as long as the citizens dance to their tunes. The citizens will lose when their interest conflicts with the oil companies' interest.
By the Withdrawal Act of 1910, oil, gas and other minerals remain in public ownership — only surface rights became private — therefore, most of the oil and gas in Routt County is publicly owned. The owner only has surface rights. Surface rights may be divided between many inheritors and/or previous owners.
Under the Fred Light decision (1911) that dealt with Forest Service land but can apply on a broader basis, the U.S. Supreme Court ruled that public ownership is equal to private ownership. A private owner can and does choose to sell or withhold the property and the terms of the sale. The public owner has the same right. When the publicly owned oil and the private surface come in conflict, a serious wreck is in the making.
Look at Battlement Mesa. Oil companies can and have put roads across a person's lawn, or drilled a well in the backyard. You may own the surface, but they have the right of access to the oil or gas. If the citizen doesn't like the deal offered, the oil company will condemn the land and take it anyhow. Take the deal or suffer the consequence.
Ranch land value in Routt County primarily is based on hunting, fishing, outdoor recreation, scenic beauty and access to public land. The number and type of easements also are critical. The number of cattle it will run is a low priority. Put an oil well with connecting roads and pipelines on the ranch and the value of the remaining land dramatically will drop. It is probable that despite oil leases, the rancher will suffer a net loss in value.
Oil and gas wells are not a windfall. Moffat County has 700 wells but its schools, towns and county need money. Downtown Craig along Victory Way and Yampa Avenue looks old and seedy — the result of decades of energy booms and busts. Moffat County has 700 wells but there are no oil or gas millionaires. Every morning a long line of cars leaves Moffat County en route to jobs in Routt County. They have the wells, but Routt County has the jobs and Old Town Steamboat is a prosperous business district. Every year thousands of people come to Routt County to enjoy the mountains and mountain recreation. They spend millions of dollars. No one goes to Moffat County to look at the oil and gas wells.
Before getting too deeply involved in Citizens Support Property Rights, we better think about whose property rights and who will gain the most. Oil wells are not a gravy train to great wealth, and they often are a millstone about the neck of a private landowner.