Officials aim to define ‘just and reasonable’ forced pooling

Natural gas is flared in March of 2018 from energy firm Alta Mesa’s Fallon well site across the Payette River from the City of Fruitland water and wastewater facilities.

It was like a preliminary hearing, as proponents and opponents of a proposed integration of oil and gas rights Sept. 9 debated what factors should be considered in deciding whether to allow a company to take over mineral rights of property owners who have not committed them.

A hearing on whether to allow integration of mineral rights that have not been committed, as requested by AM Idaho, in an application to the State Department of Lands, will be held at a later date, once the “just and reasonable” factors to be considered on the application have been set.

Following Monday’s hearing the Payette County Courthouse, Mick Thomas, Oil and Gas Division Administrator, has 30 days to make a ruling and subsequently set the date for the evidentiary hearing about the integration itself

The hearing was held to give parties an opportunity to address what they see as the “just and reasonable factors” to be considered in allowing integration.

Leading off the session was Michael Christian, attorney for AM Idaho. He focused on the purpose of the Idaho Oil and Gas Conservation Act, saying it is to encourage mineral development, prevent waste and protect landowner rights. The goal is not to place an equal balance between the needs and desires of property owners and the needs or desires of the company, Christian said but, “duty to prevent waste is paramount.”

Furthermore, integration is not recognized as an unconstitutional taking, according to decisions in other states and a decision by the Oklahoma Supreme Court, Christian said. To this he added that not allowing integration could give too much power to the minority.

James Piotrowski, attorney of the integration opponents, focused on property rights, and some property owners were not notified of the procedures affecting their land.

“The state believes in property rights at all levels,” he said, commenting that Idaho does not treat mineral rights as being less.

Bonding requirements are justified, Piotrowski said, noting the oil and gas development does affect property values.

Another concern, he said, is whether there is adequate disclosure of production of lease holders.

“Integration rights must protect all,” Piotrowski said.

The owners in question have property in the 160 acres on both sides of the Payette River where AM Idaho has drilled a well, referred to as a spacing unit, an area allocated to a well.

It was brought up during the hearing that mineral rights of property owners outside the spacing unit may also be affected by development in the unit.

Load comments