Mineral rights owners and schools losing big in the pandemic

As if the economic collapse wasn't bad enough, Colorado communities stand to take a major hit from lost royalties paid by the oil and gas industry, the Colorado Alliance of Mineral and Royalty Owners said Thursday afternoon.

The organization tabbed the damage across the state in the hundreds of millions of dollars citing the industry's "extraordinary economic distress" by the double whammy of the global pandemic and an international price war on oil and natural gas.

In its industry report last year, the alliance cited mineral royalty payments to Coloradans worth more than $500 million.

Based on Colorado State Land Board figures for the last budget year,  public schools alone could lose more than $125 million from 7 million acres of surface and subsurface holdings that are leased for mineral development.

“No matter where you live in the state, oil and gas development benefits everyone," Democratic state Rep. Bri Buentello of Pueblo said in the statement.  "Our communities rely on the mineral payments that we receive when natural gas and oil can be developed. This funding pays for safety equipment for first responders, best-in-class schools, community parks and recreation centers, and more,” said Bri Buentello, Colorado State House Representative and Education Committee vice chair. “In short, many of the very things that attract our residents to our communities are fueled by mineral and royalty payments. The decrease in our revenue due to the decline in the oil and natural gas markets has left a big budgetary hole that’s robbing our communities’ children of opportunity.”

And it's not just state programs and wealthy property owners collecting checks.

“While mineral and royalty owners are often thought of as large entities, the truth is that the average mineral owner in Colorado receives a monthly check of around $500,” Neil Ray, president of CAMRO, said in a statement. “These are people who rely on this money for a variety of personal expenses, including paying for college or caring for elderly parents. For many families, the loss of this income is devastating.”

The alliance, which claims to represent the interest of more than 600,000 mineral rights owners, released statements from a couple Thursday.

“For my family, royalty payments allowed us to educate our two sons” said Cristy Koeneke, a CAMRO member from Arvada. “Each monthly payment we earned went to Colorado State University and Metropolitan State University to pay for our children’s tuition and expenses associated with college courses. Because of our mineral rights and the production on those lands, our sons were able to start their careers without a burden of debt. Now that our children have graduated college, we use the royalty payments to pay our mortgage during our retirement.”

The payments were a lifeline to Kathy Allen, who owns minerals in Weld, Yuma and Montezuma counties.

“Royalty payments helped make the final months of my mother’s life manageable,” she said in the CAMRO release. “The costs of memory care and associated expenses are astronomical. Without royalty payments, I would have been forced to quit my job to care for my mother or go into debt. The royalty payments made her final months easier to manage financially.”