Government's Mineral Rights Auction Riles Property Owners

Some homeowners in Colorado are upset over plans to drill for gas and oil on their property. Many didn't know the federal government owned the mineral rights to their land. Now the Bureau of Land Management is auctioning off oil and gas leases without warning affected property owners first.

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This is ALL THINGS CONSIDERED. I'm Michele Norris.


And I'm Robert Siegel.

Some landowners in the Rocky Mountain West are facing a maddening situation. They own their land, but they don't own the rights to the minerals, oil or gas that lie beneath it. The federal government does. And with fossil fuel prices on the rise, the government is rapidly leasing those rights to companies who will go in and drill out the wealth. And there's virtually nothing that the landowner can do about it. NPR's Jeff Brady reports that's making things pretty tense in Colorado.

JEFF BRADY reporting:

The Bureau of Land Management held an auction in Denver yesterday, but the BLM wasn't selling land, just the right to drill for oil and gas.

Unidentified Man: ...parcel 491, 80 acres, ...(unintelligible).

BRADY: Most of the 50 or so parcels in the auction are on private land, but many of the owners won't know about the sale until an oil company contacts them to make arrangements to build access roads and install drilling pads.

Unidentified Man: ...(Unintelligible).

BRADY: It's all legal. As the West was settled, the federal government sold or gave away land, but often kept the mineral rights. Auctions like this have been going on for years, but the number of parcels has increased thanks to rising fuel prices and the Bush administration's push for more drilling. These days, oil companies are eyeing the same land the region's growing population now lives on, setting the stage for inevitable conflicts.

Mr. PETER SHELTON (Landowner): Mineral rights trump surface rights now.

BRADY: The federal government owns the mineral rights to Peter Shelton's 11-acre home site in Southwest Colorado.

Mr. SHELTON: If somebody else buys my lease, the lease under my house, there's nothing in the world I can do under the law to keep somebody from coming in and putting a drill rig as close as 150 feet away from my house.

BRADY: Shelton drove six hours so he could bid on the mineral rights under his land. He discovered a few weeks ago that the sale was about to take place only because a local activist group alerted him. The BLM pulled the parcels, including Shelton's land, after he and a few neighbors complained. But this is not the norm. The BLM has no obligation to notify landowners when the rights on their property are up for auction. It's only required to make a list of proposed lease auctions available at its offices. Then the landowners are expected to come in each quarter to see if their property is on it.

Congressman John Salazar says that should change. The Colorado Democrat wants the BLM to notify affected landowners with a letter or at least post a notice in the newspaper. The agency says it doesn't have the resources to do either of those things. Congressman John Salazar.

Representative JOHN SALAZAR (Democrat, Colorado): If BLM cannot afford to notify through newspapers, and, I mean, if that's going to be that expensive, well, they should tack on the cost to the purchaser of the lease.

BRADY: The agency has no plans to do that. Lynn Rust is with the BLM's Colorado office.

Mr. LYNN RUST (Colorado Office, Bureau of Land Management): We are meeting the requirements that we have to, but we want to try and go above and beyond that as best we can to help folks out. We certainly aren't trying to do anything secretly or anything like that. It's a public process.

BRADY: Rust says his agency used to put lease auction notices on its Web site as a courtesy to landowners, but the BLM's entire site has been down since April because it was vulnerable to hackers. Greg Schnacke is with the Colorado Oil & Gas Association. He says property owners should not be surprised when a drilling company contacts them. He says in Colorado, they were warned that might happen back when they signed the closing documents at the title company's office.

Mr. GREG SCHNACKE (Colorado Oil & Gas Association): And that information includes an explicit warning to the purchaser prior to the closing that a mineral developer may enter upon the surface property without the permission of the surface owner to develop the minerals.

BRADY: The BLM says it's exploring cheaper ways to get the word out of upcoming auctions. In the meantime, though, even more landowners will be surprised to learn that a drilling company will show up soon. Jeff Brady, NPR News, Denver.

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