Boulder has agreed to settle a lawsuit filed in early 2021 by a couple who owns mineral rights within the city.
The city will pay $35,000 to John and Valorie Wells, who own the rights to minerals under city-owned land near Boulder Reservoir. The couple were plaintiffs in the recently settled suit that alleged Boulder’s former ban on oil and gas development violated the Fifth Amendment’s rule against taking private property without compensation.
Boulder City Council approved the settlement agreement earlier this month, effectively agreeing with the city’s assertion that doing so was the safer financial route.
“The legal landscape around oil and gas regulations continues to be uncertain,” Boulder spokesperson Sarah Huntley said in a statement. “While the city does not agree with plaintiff’s allegations, it was unlikely the city would be in a better economic position litigating this issue as compared to approving the proposed settlement agreement.”
According to earlier Camera reporting, John Wells purchased the mineral rights in 1981, in partnership with geologist Robert Roehrs as part of a business and investment venture. In August 1990, Wells and Roehrs leased the rights through a two-year oil and gas lease with WestOil for $1600 plus a 16% royalty on any minerals extracted.
However, WestOil did not develop the property and no minerals were extracted through the lease.
Under the settlement, the Wellses will retain their mineral rights and can pursue oil and gas development if they wish.
However, after the complaint was filed, Boulder adopted a new set of regulations guiding potential oil and gas operations in the few areas within city limits where such development can occur. It adopted the regulations weeks before the moratorium on oil and gas development lapsed at the end of 2021.
“We won this lawsuit when the city lifted its ban,” John Wells stated in the release. “We’re happy to have achieved a victory for property owners in Colorado. The money to compensate for our losses is just icing on the cake.”
The moratorium on such development, originally enacted in 2013, was extended a number of times as staff worked to update the city’s regulations, empowered to do so in part because of evolving state rules.
In 2019, state legislation passed, allowing municipalities to regulate oil and gas operations “to protect public health, safety and welfare and the environment.” Before then, local regulations were preempted by state law.
