Colorado oil and gas royalty bill stongly opposed

Rocky Mountain Farmers Union (RMFU) is deeply concerned about S.B. 141, which would retroactively alter oil and gas royalty contracts in favor of oil and gas companies. RMFU urges legislators to acknowledge the concerns of farmers and ranchers by either tabling the bill or completely rewriting it.

“We appreciate the efforts on behalf of Rep. Tambor Williams, R-Greeley, to agree to pull this bill off the table and hold a public hearing on it,” said John Stencel, president of RMFU.

“Our royalty-owner members are justifiably upset by this bill,” said Stencel, “This bill will rewrite virtually every oil and gas royalty contract in the state.”

Some royalty owners may even stand to lose money if this bill goes through. Frequently, deductions for transportation, processing, etc. are already made from a farmer or rancher’s royalty check without them knowing about it. This bill would make it illegal for them to appeal those deductions by rewriting the terms of their contracts.

In other cases, the farmer or rancher could stand to lose money they had been promised in previous contracts with oil and gas companies. “I am afraid that this will mostly affect those farmers with gas leases,” said Richard Wolf, RMFU board member from Ault, Colo. “Deducting processing costs from their royalty checks could mean significant lost revenue.”

“Currently, there is nothing precluding oil and gas companies from specifically stating on the contract what deductions they are going to take,” commented Stencel. “If they were upfront about the deductions in the contracts, there would not be a bill to speak of.”

RMFU is urging any farmers and ranchers who are royalty owners to attend a public hearing on Friday, March 8 in the Old Supreme Court Chambers at the Capitol to discuss this issue.