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City staff brief council on oil, gas and mineral-leasing authority and local risks
Summary
Jeffrey Moore, Aurora's energy and environment manager, told council that the state regulates subsurface drilling and well path but the city retains control over surface impacts and mineral-leasing decisions; he presented production figures, inspection practices, and scenarios for how declining city leases can affect drilling configurations.
Jeffrey Moore, manager of Aurora's Energy and Environment Division, presented an overview of oil and gas operations and the city's role at the Feb. 23 study session.
Moore said state regulators (the Energy and Carbon Management Commission) retain authority over subsurface matters — including well path and depth — while the city’s legal authority is limited to surface impacts and related permitting when the well pad sits inside city limits. "The state, of course, has all authority over oil and gas operations in the state through the ECMC," he said, adding that local code (Chapter 135) and operator agreements cover inspection and surface-operation standards.
Moore gave production figures for local wells: roughly 73,000 MCF of natural gas per day, about 27,000 barrels of oil per day, and roughly 9,000 barrels of produced water per day (city staff converted monthly values to daily estimates). He also said the city receives mineral royalties and inspection/permit fees; he cited roughly $1,000,000 in mineral revenue to the general fund over the last 12 months from identified properties (some in Weld County routed to the rural water fund).
On emissions, Moore said Aurora area wells do not show up as major methane point sources on satellite-based monitoring (carbonmapper.org). He offered three reasons: strong local regulations, a robust inspection program, and that most hydrocarbons go directly into pipelines rather than surface tanks.
Moore explained drilling-and-spacing units (DSUs) and forced pooling: horizontal wells can extend miles underground and multiple mineral owners are pooled for production shares. He described three leasing choices for the city when approached by operators: accept an offer (collect the lease bonus and potential royalties), reject it (forgo bonus and royalties; parcel cannot be forced pooled under recent state law), or negotiate for better terms.
Using graphic examples, Moore showed how declining to lease can cause operators to reconfigure DSUs or geosteer wells around city-owned tracts underground, which may limit access to the city's minerals but would not necessarily stop all drilling in the broader DSU area. He cautioned that decisions not to lease can have one-time effects: some small scattered city-owned mineral tracks may be uneconomic to access in the future.
Council members asked whether surface impacts beyond the well pad could occur, how minerals are distributed among owners, and whether drilling through unleased minerals could be mineral trespass; Moore reiterated that Colorado law currently gives the state control of the well path and depth and that local authority focuses on surface activities and leasing choices.
Moore concluded that the city follows a competitive bid process for leasing, confirms ownership, and brings recommended leases to executive session before public council action; council thanked him and moved on to other business.
