Boulder County May Fork out $1 Billion to Compensate Mineral Rights Owners


Boulder County May Fork out $1 Billion to Compensate Mineral Rights OwnersA new study has shown that taxpayers in Boulder County in Colorado will face a bill of $1 billion as reimbursement to those who hold underground mineral rights that won’t be able to extract the resources.

The study, which was released by the National Association of Royalty Owners and done by global petroleum engineering company Netherland, Sewell & Associates, took into account the royalties the mineral rights holders may be losing out on due to the fracking ban, reported the Denver Business Journal.

Boulder sits on the Wattenberg Field, which contains some of the largest oil and gas deposits in the United States.

Fracking has generated controversy in Colorado of late after energy firms started drilling close to neighborhoods. Five Colorado cities, Boulder included, have prohibited hydraulic fracturing within the local borders, and many more voter initiatives are currently underway to ban fracking in November ballot.


Colorado Governor John Hickenlooper has been actively searching for a mutual compromise that seeks to furnish local authorities with more power over drilling operations. Boulder County approved an 18-month ban, which is set to expire on January 1, 2015, on any new oil and gas developments within the county.

The study found out that a holder of a royalty with a 1/8 royalty interest covering a single section will pocket up to $40 million in royalty awards over the entire life of a new well. Those with 1/5 royalty interest will receive up to $64 million over the well’s entire production life. With the number of sections in Boulder County estimated to be more than 50, the study estimated that the county will need to look for $1 billion to compensate those who wish to extract the oil and gas resources but are unable to do so.

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