After councilmember flips his stance, Erie Town Council votes to sell the town’s mineral rights

Just one week after voting against it, now the Town of Erie is flipping its stance and agreed to sell its mineral rights to SM Energy.

ERIE, Colo — Just one week after voting against it, now the Town of Erie is flipping its stance and agreed to sell its mineral rights.

Erie council members rejected a plan one week ago to sell the town’s mineral rights to SM Energy to drill the Draco Well Site in a 3-3 vote.

However, Councilmember Brian O’Connor, the key ‘no’ vote last week, came back around and asked that it be reconsidered. That led the council to approve the measure, voting 4-3 on the sale. O’Connor’s vote was, again, the key vote, swinging the council toward the sale.

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Many town residents were back out in force in a familiar pattern on Tuesday night, calling on the council to stop the sale… again.

Erie town leaders say they were first approached last year by Civitas Resources, which later merged with SM energy, in hopes of acquiring Erie’s mineral rights within the Draco Oil and Gas Project.

The Colorado Energy and Carbon Management Commission had already approved the drilling area.

A state law that took effect last year prevents operators from drilling into oil and gas owned by municipalities. Erie has mineral rights in the Draco Well Site. The town’s website said because of that, they have a say in the matter of drilling moving forward.

Those in favor of the plan moving forward believe this drilling will happen anyways and the Town of Erie might as well collect some cash on those mineral rights.

It’s a platform the town’s consultant Matt Owens, a former oil and gas executive who put the deal together, has been touting this week on social media in urging the town council to sell mineral rights to his own former company. Town leaders agreed the figures in Owens’s post for the proposed sale were heavily inflated.

The second time around, a lot more people came out in favor of the proposal.

“I can see that this agreement is beneficial to the town. Erie gains surface acreage, upfront cash, royalty revenues and the plugging of 39 wells, 17 of those prematurely. Selling mineral rights isn’t always a good idea, but in this case, it does make sense,” said Blue Spikes, an Erie resident.

Mayor Pro Tem Brandon Bell said he’s for it so Erie can see some good from this.

“I think this is a simple situation where SM Energy, they are going to be moving forward with the Draco Project no matter what happens, and this is a chance for us to be able to get some compensation,” Bell said. “Our minerals are really worth nothing if this moves forward without this deal.”

A lot of people say the way the town council made decisions in executive sessions raises red flags. Many say they don’t understand why the council is moving at this fast space.

“Why was this vote resurrected in such a hurry?” said Larisza Krista, an Erie resident. “We are informed on a Saturday, one business day before the revote? Last week, we heard all these people speak up against this deal. Hundreds of residents are disgruntled about the sale of the mineral rights and drilling under our homes, under our school.”

It’s why Councilmember Dan Hoback said he’s against it.

“Mostly because most of our residents are pretty firm ‘no’s.’ I’ve known that not just from the input we’ve received over the last several months, but campaigning through three elections, knocking on doors,” Hoback said. “People don’t want us to engage with oil and gas.”

A spokesperson for Erie said they expect to receive $4.5 million cash, nearly $14 million for the land and between $19-31 million in royalties for mineral production.