A tough economy has most states scrambling for funds, especially for recreational facilities and state parks.
A tough economy has most states scrambling for funds, especially for recreational facilities and state parks. Colorado is exploring the possibility of selling oil and mineral leases on some its public land to help finance the state park system. Government funding is declining, and even though visitation is increasing, the revenue from entrance and camping fees is not enough to compensate for the loss of government funds.
Colorado State Parks spokeswoman Deb Frazier said the parks are similar to other entities experiencing financial strains. “We are looking at other ways to help with our income,” she said. State parks received $6.7 million in general funds in 2009, $2.6 million this year, and are expecting no state funding in 2011. Even when usage fees are raised and jobs are cut, the parks are left searching for funds to make ends meet.
The split estate structuring of Colorado’s property laws makes calculating potential profits difficult. A split estate provides one owner the rights to surfaces uses including land and water while giving the underground usage rights to another owner. Oil, gas and mineral extraction all belong to the owner of the underground usage rights. The fact that almost 78 percent of the mineral rights for state land is owned by other state and federal agencies further complicates financial planning. Frazier said that as the State Parks acquire land, “the agency tries to acquire mineral rights.”
Adding that “the lease would seek a small footprint and minimal ecological impact,” Frazier realizes that environmental concerns including water contamination and wildlife habitat are sensitive issues at the forefront of any drilling operations on state owned land.
Barr Lake State Park outside Denver already has a producing gas well drilled by Texas American. Frazier said the parks agency does not hold the mineral rights there. St. Vrain State Park near Longmont sits in the middle of an active well area. Several oil and gas companies have purchased leases in the park’s vicinity.
Profitability will depend on negotiations between the owners of mineral rights and the park agency for wells drilled on state land. Frazier believes the parks are more likely to profit from direct negotiations with oil and gas companies rather than relying on royalties negotiated with outside owners drilling directionally into the park from adjacent properties.
Lawmakers are split on their support for potential exploration and drilling. Claire Levy, a representative from Boulder said she would hate to see the picturesque and recreation-friendly parks “be turned into another oil and gas drilling site.” Fort Collins representative Randy Fischer agrees that, “Any sort of energy development, even solar and wind power, needs to be done in a fashion that preserves and protects the scenic value of the state parks.” Fischer also believes drilling should at least be given consideration since all agencies are exploring options in a slow economy.