Amended Agreement for 84 Wells Passes by 6-4 Vote: Mayor Squashes Pumpkin To Delay Vote

Broomfield City Council passed Resolution No 2017-186 with a 6-4 vote in favor of the Amended Agreement with Extraction Oil and Gas.  Four hours of citizen comments preceded the vote, including 47 citizen comments against passing the Amended Agreement and 32 citizen comments for passing the Amended Agreement.  You can find the document here and can watch the entire meeting video here.




Voting for Resolution No 2017-186 Amended Agreement

Ward 1 – Council Member Law-Evans

Ward 2-  Council Member Shelton

Ward 3-  Council Member Taylor

Ward 4 – Council Member Stokes

Ward 5 – Council Members Derda and Beacom

Voting Against Resolution No 2017-186 Amended Agreement

Ward 1 – Council Member Jezerski

Ward 2 – Council Member Tessier

Ward 3 – Council Member Erickson

Ward 4 – Council Member Kreeger

In a prelude to the final vote, Council Member Law-Evans set forth a substitute motion to continue Council debate until Monday morning and Council Member Tessier seconded the motion.  Earlier in her comments, Council Member Law-Evans labeled this the “pumpkin scenario,” obviously referring to the upcoming Halloween holiday.  She proposed that Extraction and the City Staff continue negotiations on five issues until Council would reconvene on Monday morning to vote on the Amended Agreement.  The five issues were:

  • Double-check the contract with the City’s special oil and gas counsel. Council Member Kreeger had reported that Special Counsel Phil Barber had only had one hour to review the final Amended Agreement, based on what Phil Barber stated in a call on Tuesday afternoon with Council Members Kreeger, Shelton and City Attorney William Tuthill.
  • Work with Adams County further to address their concerns. Three Adams County Commissioners and twelve Adams County residents gave citizen comments objecting to the Amended Agreement.
  • Reconsider the United and Huron pads north of Northwest Parkway that were very highly rated by the Task Force Alternative Site Matrix.
  • Provide documentation of serious negotiations with Wildgrass mineral owners to offer a fair market lease and no liability.
  • Cap the royalty loss of the City to $8 million in exchange for not drilling Phase II of the Livingston Pad.

Council Members Derda and Taylor stated that they could not be present on Monday morning if the vote were continued.  No questions were asked by Mayor Ahrens or anyone else as to the reasons that Council Member Derda or Taylor could not be present on Monday morning.  When the vote on this motion was tied 5-5, Mayor Ahrens broke the tie by voting “No,” stating he wanted everyone to be able to be present for the vote and thereby squashing the “pumpkin scenario” to get further concessions from Extraction.

Voting for the Continuation Until Monday Morning

Ward 1 – Council Members Law-Evans and Jezerski

Ward 2-  Council Members Shelton and Tessier

Ward 4 – Council Member Kreeger

Voting Against the Continuation Until Monday Morning

Mayor Ahrens

Ward 3 – Council Members Taylor and Erickson

Ward 4 – Council Member Stokes

Ward 5 – Council Members Beacom and Derda

Since the Mayor’s vote killed the possibility of continued negotiations until Monday, the meeting then continued under the realization that the vote had to be held at the October 24 meeting.  During Council comments, Attorney Tuthill and Extraction Attorney Christ were seen motioning to each other to go out of Council chambers several times.  After Council comments completed, Attorney Tuthill announced that Extraction had agreed to add to its Agreement that Wildgrass unleased mineral owners would be given 60-day notice instead of 35-day notice before any forced pooling, but added that Extraction had stated that was their final change.  Wildgrass Oil and Gas Attorney Matt Sura spoke during citizen comments, referring to a lengthy analysis that he sent to Council of the deficiencies in the proposal and why there was no reason to rush to approve it.

Earlier in the evening at the beginning of Item 11 Council Business, Attorney Tuthill made two announcements.  The first was that he had determined that neither Council Member Law-Evans nor Council Member Taylor had any conflict of interest in this vote.  Council Member Law-Evans had been under scrutiny since her real estate company had been marketing a property near one of the pads at one point.  Council Member Law-Evans stated that she had taken “steps to walk away” from the business deal “a while ago.”  As interim CEO of the Broomfield Chamber of Commerce, Council Member Taylor draws a salary and Extraction financially supports the Chamber of Commerce.

Attorney Tuthill also announced that a group of five Broomfield residents had filed a lawsuit seeking an injunction to enjoin Council Members Taylor and Law-Evans from voting on the Amended Agreement.  “Five citizen residents of the City and County of Broomfield, Colorado, Madhav Narayan, Lanae Davis, Jodi Behrens-Stark, Christopher Cleary, and Suzanne Kent and The Broomfield Way, a political committee (hereinafter collectively referred to as “Plaintiffs”),” filed the lawsuit on October 24 “against the City and County of Broomfield (“City”) and Councilmembers Elizabeth Law-Evans and Sam Taylor in their official capacities.”  You can read the document here. According to reports, the plaintiffs tried to get the injunction approved on October 24 but there were no judges working in Broomfield at all Tuesday afternoon when they arrived.

After City Manager Charles Ozaki went over a summary of the history of oil and gas issues in Broomfield since 2012, he stated that he “believed the agreement was ready for Council’s consideration.”  He also added quietly that “timing is important,” because “we [City] are not sure that we will have an agreement after the spacing unit hearing next week [October 30 and 31].”  Council Member Shelton asked more direct questions of Extraction about this.  Extraction Vice President Eric Jacobsen said that they were not making a “threat,” but that their “business drivers and plans” necessitated that the spacing unit applications be approved at the COGCC October 30 and 31 hearings and that they subsequently get the drilling permits.  He reminded Council that the previously approved spacing unit applications allowed for twenty wells on each pad.

Broomfield Special Counsel Tami Yellico showed the map of the proposed 84 wells.  She announced new agreements just reached which included $5 million of environmental liability insurance, baseline air and water testing of the new pad locations, and Extraction’s commitment to start the drilling on the project in the east, with eight wells on one of the Interchange Pads.  It had been a frequent resident question as to why Extraction could not drill east to west to show that their Best Management Practices (BMP) in the agreement were adequate to protect the health and safety of residents.  After the drilling of the eight wells on the Interchange pad, Extraction will drill the 19 wells on the Livingston Pad.

Adams County Commissioner O’Dorisio stated that they objected to the Amended Agreement based on two principles.  The first objection was that the wells were not located in the least impactful area, as there was undeveloped commercial land that was available north of Northwest Parkway.  The second principle was the use of Open Space for an oil pad instead of the buffer and natural beauty it was meant to be used for.  Adams County Commissioner Tedesco accused Broomfield of prioritizing the needs of future development north of Northwest Parkway over the current residents of Adams County.  Twelve Adams County residents spoke against the Amended Agreement and just a few spoke in favor of it.

Nine Wildgrass residents spoke to ask the City not to pass the MOU on October 24 in order to support the property rights of Wildgrass mineral owners by continuing the City’s protests at the COGCC hearings on October 30 and 31.  Wildgrass resident Jean Lim stated that Wildgrass’ protest at the COGCC was due to inadequate notice, which would be in violation of the proposed Amended Agreement Best Management Practices (BMP).  Resident Dylan Lario spoke of the unfair lease offered to Wildgrass with liability and only 17% royalties compared to the current market rate of 21%.  He asked Council Member Stokes to imagine the unfair practice of forced pooling in the State of Colorado as someone telling you that they were going to use your back porch for a frat party.

Task Force Member Steve Reynolds spoke in favor of passing the Amended Agreement because he felt it “empowered Broomfield more than other cities” and that Extraction would certainly get its spacing unit applications approved by the COGCC on October 30 & 31.  Jim Bensman of Anthem Ranch asked, “What happens if we don’t agree to it?”  Several oil and gas industry representatives and related workers spoke in favor of the Amended Agreement.

In other citizen comments, Laurie Anderson handed Mayor Ahrens a petition with 210 signatures gathered since Tuesday morning of residents opposed to the Amended Agreement.  Task Force member Sarah Mann referred to an email that she and three other Task Force members sent to Council noting ten concerns they thought had to be addressed in the Amended Agreement.  McKay Landing resident and former federal civil rights litigator John Dulles said that “the threat of a lawsuit” should never cause elected representatives to place “the community at risk for the profit of oil and gas.”  Wildgrass resident Bill Young presented a list of costs that Broomfield taxpayers would incur if the Amended Agreement passed due to current faulty agreement.  Wildgrass resident Matthew Schnosky pointed out that Council “didn’t even understand what it was voting on with so many last-minute changes.”

Many citizen comments referred to the fact that accidents happen and that they did not want Broomfield to be part of an industrial experiment.  Council Member Beacom said in his remarks that he was pleased that Broomfield would be the “template” for other areas in the State.

After the passage of Item 11a titled “Resolution No. 2017-186 Authorizing and Approving an Amended and Restated Oil and Gas Operator Agreement with Extraction Oil and Gas, Inc., a Surface Use Agreement, and a Settlement Agreement,” Council went forward with further Council business.  That included a long-awaited letter proposed by Mayor Ahrens and Council Member Tessier to invite regional entities to request COGCC rulemaking.  The letter to be sent out shortly states:

Regardless of whether or not one supports or opposes oil and gas development, there is a large and growing consensus that this intensive industrial activity does not belong in residential neighborhoods, near schools and hospitals, or in close proximity to drinking water.

Adams County would be one regional entity which would be asked to sign on to the letter. The letter was introduced on the same night that they unsuccessfully protested the Amended Agreement which does put “intensive industrial activity” next to their “residential neighborhoods.”

Also, later in the evening, City Manager Ozaki was asked by Ward 3 resident Deven Shaff about the revenue that the City expects to get from property taxes.  City Manager Ozaki stated that from the 84 wells over the next 7 years, the City expects about $9.2 million in property tax revenue.  It is front-loaded since the production is front-loaded, as follows: Year 1 $3.9 million, 2 $1.9, 3 $0.9, 4 $0.7 and 5 $0.7.

The Extraction spacing unit applications will be heard at the COGCC on either October 30 or 31.  The COGCC has not yet published an agenda.  The City will be dropping its protests as a result of the passage of the Amended Agreement, but the protests of Wildgrass mineral owners will still be going forward.  All Broomfield residents are invited to speak at the hearing as impacted citizens and further information will be found on this website as it becomes available.