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Capital & Main
Capital & Main
Jennifer Oldham

Million Dollar Homes With Oil Wells as Neighbors

Erie is one of Colorado’s fastest-growing towns. Photo: Arina Habich/Getty Images.

Sami Carroll moved with her family eight years ago to Erie, a picturesque town north of Denver that she thought was beyond the reach of fossil fuel development encroaching on fast-growing suburbs in the shadow of the jagged Rocky Mountains. 

She was wrong. 

A company now wants to drill 26 wells under Erie from a pad six miles away — among the longest horizontal bores ever proposed in Colorado. The potential for interaction between the proposed wells and several dozen legacy wells drilled years ago raised alarms for Carroll, her neighbors and town officials.

The older infrastructure includes nine wells interspersed among homes within several thousand feet of the Carrolls’ front door in the Flatiron Meadows housing development. A pipeline extending from one of those wells runs under their house. Some are producing hydrocarbons, several are shut in — capable of producing fossil fuels but not currently in operation — while others are plugged and abandoned.

“There are over 20 neighborhoods between the proposed pad and my house that these wells would travel under — including schools,” Carroll said on a recent fall day as she drove past grass-covered expanses littered with rusted fossil fuel equipment.

“Those of us in Boulder County didn’t think we would have to deal with this,” said Carroll, a corporate trainer and mom of three who created a website to inform neighbors about the plan. “Many people I’ve spoken to have said that’s why they bought in Boulder County.”

A unique Colorado law allows cities and counties to impose their own requirements on energy development.

Boulder County is known for its resistance to oil and gas development. County commissioners enacted a moratorium on drilling in the 2010s. It also challenged an attempt by Extraction Oil and Gas Inc. to force the county to lease its mineral rights under 552 acres of open space. The firm withdrew its application in 2023 but is again asking state regulators for permission to drill under Boulder County as part of the operation that would impact Carroll’s neighborhood. 

Yet the county has no jurisdiction over the application because the pad on which the wells would be drilled is located next door in Weld — the state’s largest oil and gas county.

Weld officials approved the proposal in February. The state’s Energy & Carbon Management Commission plans to hold a public hearing on the project on Oct. 29 at Erie Middle School. It’s then scheduled to make a decision on the application on Nov. 6. Municipalities regulate fossil fuel operations on the surface, while the state focuses on operations both above and below ground. The distinction is becoming more important as a process known as fracking, or hydraulic fracturing, allows companies to plumb formerly unreachable shale formations miles under the earth.

Concerns about the reach of Extraction’s proposal — for what’s known as the Draco pad — underscore the stark differences in how stringently municipalities across Colorado regulate oil and gas.

A unique 2019 state law allows cities and counties to impose their own requirements on energy development. Since its adoption, local governments enacted rules that require operators to curb traffic, monitor pollution in the air and water, use the land wisely and protect wildlife. Restrictions vary widely from place to place. Weld County, for instance, requires only a 500-foot setback between wells and homes, while the town of Erie, where the Draco pad would be built, mandates a 2,000-foot distance between the two. Civitas Resources Inc., which owns Extraction, acknowledged on its website its inability to comply with Boulder County regulations when it searched for a place to locate the Draco pad.

“Extraction reviewed areas within Boulder County and the Town of Erie and determined that there were no feasible locations that were allowed by local regulations,” company officials wrote on a webpage dedicated to the Draco pad proposal

Erie itself is a unique example of the tension between local governments over uneven oil and gas rules: The town is bifurcated by the border between Boulder and Weld counties. Since the 26-well Draco pad is proposed on the Weld County side of town, Erie’s 2,000-foot setback does not apply. Lateral well bores snaking from the site to the west would extend under a quarter of Erie, one of the state’s fastest-growing towns.

“To have fracking that close would be a shame — it could actually decrease the value of homes.”
~ Brie Fowler, real estate agent and Erie resident

The regulatory mismatch raises thorny public health and safety questions for residents and Erie officials. Among them are the risk posed by record-long well bores that would run contiguous to existing wells, as well as the dusty 20-acre pad site’s location on the outskirts of a planned 3,100-residence development with homes priced between $500,000 and $1.5 million.

Erie annexed the land for what’s known as Westerly in 2020 and 1,000 residents are expected to live there by 2026. At least 50 homes are currently under construction. And the town has plans on file showing that about 40 houses will be built within 2,000 feet of the proposed pad. A school, park and trails system will be uphill from the site, which is already occupied by an oil and gas operation.

Residents who live in Westerly’s newly finished single-family residences and townhomes, some across the street from a pool, realized nearby oil and gas operations were a possibility — they were mentioned in sale documents. Yet they said they were unaware where the Draco pad would be constructed and how big it would be.

“I purchased here because it’s one of the most unique neighborhoods in Erie, with all the parks and resort-style amenities,” said Brie Fowler, a real estate agent and Colorado native who was among the first to move into homes perched high on a hill.

“To have fracking that close would be a shame — it could actually decrease the value of homes.”

Indeed, the master planned community’s developer, Southern Land, noted in comments filed with state regulators that one builder at Westerly “has already reported that a prospective homebuyer terminated a contract at Westerly due to the threat of the proposed location of the Draco Pad.”

Southern Land also told regulators that it spent $1 million to ensure new fossil fuel operations wouldn’t take place on or underneath its 800-acre site and operators would plug several abandoned wells. The company is concerned that Extraction’s Draco pad could “threaten the integrity” of the older capped wells and “pose health and safety risks,” its attorneys told state regulators.

Civitas Resources Inc., Extraction’s parent company, said in documents filed with the state’s Energy & Carbon Management Commission that it will plug 22 wells in what’s known as Draco’s “drilling and spacing unit.”

“Extraction has committed to collaborating with the Town of Erie to plug and abandon 22 legacy wells and associated infrastructure,” wrote Jeff Annable, Extraction’s manager of well and location permitting. Annable added that the firm couldn’t provide a specific timeline for that cleanup work.

The Colorado commission’s director included Annable’s letter in a recommendation to the six-member body that it approve the project. Annable wrote that the firm will comply with a state law that requires it to review records of wells that are plugged and abandoned within 1,500 feet of each planned new lateral well. (Erie officials estimate there are at least 50 in the region, David Frank, Erie’s environmental services department director, told Capital & Main.) Attached to the recommendation are hundreds of comments from residents listing their concerns about possible conflicts with older wells located in their neighborhoods.

The uncertain timing of Civitas’ planned well-plugging operations, and whether they will take place before drilling at the Draco pad begins, has left residents and local officials on edge.

Southern Land, the company that is developing the 3,100-home Westerly project, wants Extraction Oil and Gas and state regulators to consider alternative locations for the Draco site.

Sealing old wells is a complex and disruptive process, requiring the permission of a property owner to come on site to assess an abandoned well and conduct “soil gas surveys” at various depths to ensure it isn’t leaking, Frank told Capital & Main.

“This is a point of negotiation — identifying wells, I think, are of concern and, Civitas agrees, deserve additional scrutiny,” he added. “We want to make sure we understand what’s going on prior to development at Draco.”

Civitas’ plugging operations would result in the reclamation of 18 locations — an area including old wells and related equipment — and the removal of 37 tanks from neighborhoods, including 24 that store oil and 13 that store toxic water pumped out of wells during fracking operations, Frank told Erie’s Board of Trustees in April.

How the drilling project might interact underground with existing wells is not the only outstanding question about the Draco proposal. Southern Land, the company that is developing the 3,100-home Westerly project, wants Extraction and state regulators to consider alternative locations for the Draco site, the developer’s attorneys wrote in a letter to the six-member Colorado energy commission.

In lieu of that, Southern Land asked regulators to require Extraction to pave dirt roads nearby to reduce dust, implement air quality monitoring practices and mitigate visual impacts of the site by planting “12-foot-tall pine trees” or similar barriers and building a berm around the site. Extraction committed in Annable’s letter to install a 32-foot-tall sound wall around the site and to using electric-powered equipment to reduce emissions.

Perhaps most critical for the developer, the site’s builders, and Erie officials, is a request that the state require Extraction to follow a publicly disclosed drilling schedule that would list “definitive dates by which Operator must commence and complete drilling and completion operations,” the developer’s attorneys wrote.

In response to a request for comment, Jenna Lefever, Southern Land’s director of public relations, said that the company is “actively negotiating with Extraction” for increased protections for current and future residents and, because of “the confidential nature of the negotiations,” she couldn’t provide further comment.

Meanwhile, Carroll, the Erie resident who already has abandoned wells as neighbors, is working to organize people in surrounding neighborhoods to speak up at the Oct. 29 hearing with state regulators.

An organization she founded earlier this year, Flatiron Meadows Oil and Gas Monitoring Group, is only the second such group to ever obtain an agreement from the six-member state commission to hold a public comment session in the field.

“I want them to come here and see how many wells are in the way and how many homes and developments,” said Carroll, pointing out the abandoned wells in the Kneebone Open Space, a 30-acre expanse criss-crossed by hiking trails. “They are not going to just push these applications through anymore; they are going to have to answer to the impacted residents.”


Copyright 2024 Capital & Main

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