COLUMN: Students need to be more vested in Board of Trustees’ actions
By Alexander Armani-Munn
editor@uncmirror.com
April 6, 2012
EXCERPT:
The Board of Trustees chose to approve the contract without consulting members of the campus community, including the student body. To this day, the university has done little to disclose the details of the contract, and for that reason, the majority of the student body remains unaware of its existence.
Perhaps the board does not consider fracking to be a controversial issue. Maybe it saw a business opportunity that was too good to pass up, or maybe a preoccupation with raising tuition prevented them from consulting the campus community.
The truth is, fracking is a controversial issue, and the Board of Trustees did the university a disservice when it approved this contract without the consent of the campus community.
The other truth is that this contract is a great business opportunity with the potential to generate significant revenue for the university.
Unfortunately, that revenue will not offset the seven percent tuition increase the board is proposing for next year. This will be the second consecutive year the board has raised tuition, following the 13 percent increase that took effect this year.
According to the 2011 UNC Financial Report, student tuition was the university’s largest source of revenue each of the last three years. In those three years, revenue from tuition has risen from $79,206,461 in 2009 to $93,322,869 in 2011.
By keeping students in the dark on such decisions as the Mineral Resources contract, the Board of Trustees is alienating the population that allows the university to exist.
All board meetings are open to the public, and an agenda outlining topics of discussion is available online before each meeting.
Student Trustee Lauren Zdanowitz was informed of the Mineral Resources contract in November, just days before it was approved by the board. To her knowledge, the board made no efforts to consult the student body on the contract.
“I do believe that the students could be better informed about what happens at the Board of Trustees level and in some cases, (the board should) consult students before reaching a decision,” Zdanowitz said. “Based on my knowledge, the board has no direct contact with the general student body.”
[Link to complete full text of the column here]
Excerpt from Minutes of the Board of Trustees Meeting, November 18, 2011:
Oil and Gas Lease (Norton/Satriana)
UNC has a positive financial opportunity. Over the past year there have been discussions regarding oil and gas on UNC’s property. After the negotiation of terms, market rate and the reputations of potential Lessees we are recommending to the Board that we lease these rights to Mineral Resources Inc. This would include 246.22 net mineral acres and a $500 per mineral acre bonus payment, which amounts to $123,110. UNC will receive (standard in the industry for urban development) a royalty of 16%. In the Greeley area, the bonus is lower if the royalty is higher or vice versa. Under the City of Greeley, there are smaller parcels so the cost is higher. There will be no surface oil and gas activity on our property, the drilling is horizontal. The return for us is in the royalty.
Trustee Gast moved to approve the Oil and Gas Lease. Trustee Morgensen seconded the motion. Motion carried unanimously. [Link to complete text of minutes here]
Eric Brown, ebrown@greeleytribune.com
News, January 11, 2012
Oil and gas exploration in Greeley raising concerns
A local oil and gas company is looking to expand its drilling operations within Greeley's city limits, but in doing so has raised some concerns among residents about what they see as potentially negative effects on their drinking water and the foundation under their homes.
Meanwhile, officials with the company and with the city of Greeley say misinformation may have prompted many of those concerns, explaining that Greeley residents' drinking water comes from snowpack and reservoirs in the mountains " not from groundwater beneath the city " and the ground under their homes will not be effected since the directional drilling will take place about 7,500 feet below the Earth's surface.
In recent weeks, many residents living in east Greeley " between 1st and 23rd avenues and between 10th and 20th streets " received letters from Mineral Resources, notifying them of the Greeley-based company's plans for an oil and gas directional drilling program in that area. In the letter, the company offers residents a sign-on bonus and a royalty rate for five years in exchange for leasing their mineral rights to the company.
But some residents aren't eager to sign up.
"I've heard comments from quite a few residents in that area, and it's a lot of negative feedback," said Greeley City Council member Donna Sapienza, who represents Ward II, the area where residents were recently notified of Mineral Resources' future exploration plans. "At the top of the list for many of them is the concern of drinking water."
In addition to Greeley residents not getting their drinking water from the ground beneath them " as Greeley Mayor Tom Norton and city of Greeley Director of Water and Sewer Jon Monson pointed out " Arlo Richardson, owner of Mineral Resources, explained that state regulations require oil and gas companies to pump a cement casing between production activity and the earth, in efforts to prevent seepage.
Also, the city's water pipes are located only about 5 to 10 feet below ground, Monson said, and the oil and gas production will take place thousands of feet below.
But some residents say they still plan on fighting against future oil and gas production in their area.
"I just don't believe this is in Greeley's best interest long-term," said Susan Herold, outgoing president of the Greater Glenmere Neighborhood Association. "We're enjoying all of this economic boom in Weld County and Greeley, but what will happen down the road when the wells run dry?"
Directionally drilled wells are drilled vertically for the first 1,000 feet from a pad site, then extend diagonally another 7,000 feet in different directions. The pad site for the drilling that would take place in east Greeley is located at 16th Street and 4th Avenue. Drilling from that location is not expected to begin for about two years, according to Richardson.
Richardson " who himself lives in the east Greeley area where the oil and gas exploration would take place, and whose family has lived in Greeley since 1961 " said Mineral Resources has been exploring oil and gas production in Greeley for about five years, and now has about 6,000 total lease agreements with mineral rights owners in various parts of the city. He said the methods his company uses have been in use for decades, and that advances in technology and stricter regulations have only improved safety.
Because residents have raised concerns recently, the city of Greeley has on its website an 11-page document that provides answers to frequently asked questions regarding oil and gas exploration. Sapienza said she encourages residents to read that document as part of making their decision about whether they agree to lease their mineral rights to Mineral Resources, or other companies.
Richardson said he encourages residents to contact him or his company if they have questions.
Whether or not some residents sign their agreements and lease their mineral rights to Mineral Resources, the company can still go forward with its drilling operations. As Richardson explained, under state statute, "correlative rights" don't allow one mineral rights owner to keep another from leasing his or her rights to oil and gas production.
Mineral rights owners who don't agree to lease out their mineral rights still get royalties of 12.5 percent " a requirement in Colorado, Richardson said. However, that royalty percentage is less than what Mineral Resources is offering residents in east Greeley. The state also doesn't require a sign-on bonus, as Mineral Resources is offering. In a letter provided by an east Greeley resident who was recently contacted by Mineral Resources, the company offered the mineral rights owner a $300-per-acre sign-on bonus and a royalty percentage of 14 percent.
Richardson stressed that sign-on bonuses and royalty percentages vary from project to project, depending on a wide variety of circumstances.
In addition to the homes in east Greeley where residents were recently notified of Mineral Resources' future drilling plans, an area that also includes the University of Northern Colorado, a number of schools in the Greeley-Evans School District 6 and Northern Colorado Medical Center.
In November, the University of Northern Colorado Board of Trustees unanimously approved a lease agreement with Mineral Resources that provides "underground access to 246 acres of the campus for horizontal drilling that will occur from off-campus locations" and take place "at a minimum depth of about 7,000 feet ... not near any aquifers." Mineral Resources will provide to the university about $123,000 up front and a 16 percent royalty from production, according to a UNC news release.
Excerpt from News Release dated 11-18-2011
Mineral rights: The "no-surface occupancy" lease with Mineral Resources Inc., a Greeley-based company, provides underground access to 246 acres of campus for horizontal drilling that will occur from off-campus locations. No surface activity will occur on campus and production at a minimum depth of about 7,000 feet is not near any aquifers. Mineral Resources will provide to the university about $123,000 up front and a 16 percent royalty from production. [Link to complete news release here]