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Crestone Peak Resources proposes to drill 28 wells from a pad on property just east of Panama Reservoir No. 1 that is covered by Boulder County conservation easements. A state regulator has postponed hearings on the project until a lawsuit filed by Boulder County is resolved. (Dana Coffield, The Colorado Sun)

The state will not move on an application by Crestone Peak Resources to drill oil wells on Boulder County open space and land covered by conservation easements until a lawsuit between the county and the company are resolved—delaying the project for months, perhaps years.

Ruling in favor of a motion by Boulder County a Colorado Oil and Gas Conservation Commission (COGCC) hearing officer said commission hearings on the Crestone application will be delayed pending resolution of the lawsuit filed by the county against the driller on Sept. 25.

The COGCC was set to hold two days of review at the end of the month on Crestone’s plans, potentially leading to an approval of its comprehensive development plan. The company hopes to drill 140 wells on a 10-mile swath of land straddling Colorado 52 east of U.S. 287.

Hearing officer James Rouse, however, said the Crestone dockets should be stayed “indefinitely pending the final decision in the lawsuit and any appeals of the decision.”

“It is a victory, but there is a long road” said Kate Burke, a senior assistant Boulder County attorney.

Crestone spokesman Jason Oates, said the company has met all of the requirements laid out by COGCC’s Rule 216 for comprehensive drilling plans.

“Political maneuvering and misguided legal challenges are only temporary hurdles that Crestone is prepared to challenge and overcome as part of this project,” he said in an emailed statement.  “Time will tell. Crestone will develop our mineral interest in Boulder County, safely, responsibly, and environmentally friendly.”

In the lawsuit, filed in Boulder District Court, the county contends that on some parcels, old mineral leases have expired and it is the county, not the driller, who holds them.

MORE: Boulder County fights with finesse — and an all-out assault — to stop drilling on public open space

The county also argued that drilling would violates state statutes that prohibits “injuring or destroying” conservation values protected by conservation easements.

It isn’t unusual for the COGCC to tell parties to resolve any lawsuits or legal actions before coming to the commission, said Bruce Baizel, an attorney and energy director for the environmental group Earthworks. “It is usually a dispute between two companies or landowners. The wrinkle here is that it is a county.”

Where Crestone Peak wants to drill. (Provided by Boulder County)

Earthworks is participating in the Crestone docket before the COGCC.

“This could drag on for years,” Baizel said. “Boulder County constituents are telling their officials you’ve got to fight this to the end.”

Crestone could try to appeal to the full commission, although Baizel said that would be unusual. “The hearing officer did not leave much room in the decision.”

Crestone has until Oct. 19 to respond the county’s legal complaint and the county has asked for a jury trial, Burke said.

The court will set a calendar for motions, including a likely motion to dismiss, depositions and trial. “There is just a long, long list,” Burke said.

After any decision at the district court level an appeal by the loser is also likely. “There are many paths that could open up,” Burke said.

This story was updated Oct. 5, 2018, at 3:20 p.m. to include comments from Crestone Peak Resources.

Mark Jaffe

Special to The Colorado Sun Twitter: @bymarkjaffe