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BLM Draft Proposals Unsettle Energy Industry in Western Colorado

The Bureau of Land Management (BLM) in Colorado this week issued two draft environmental proposals that could set back future oil and natural gas development in parts of western Colorado, including previously issued leases in the Thompson Divide and Roan Plateau.

For the Thompson Divide/White River Forest area, BLM on Wednesday issued a draft environmental impact statement (DEIS) that could eliminate up to 65 oil and gas leases. The DEIS offers five alternatives for consideration ranging from no changes to canceling all of the leases, a BLM spokesperson told NGI's Shale Daily.

Late Tuesday, the federal agency issued a draft supplemental environmental impact statement (DSEIS) for the Roan Plateau resource management plan, which comes one year after an omnibus settlement set aside 17 of 19 previously granted leases (see Shale DailyNov. 21, 2014).

"We're glad to see the BLM is moving forward with the DSEIS in accord with the settlement agreement with interested companies and local/state officials," said Western Energy Alliance’s (WEA) Kathleen Sgamma, vice president for government and public affairs. "Since Congress mandated natural gas development on the Roan Plateau in the late 1990s, there has been too much uncertainty and delay.”

Last year a federal-state settlement was reached on the disputed oil/natural gas drilling leases on the Roan Plateau, ending six years of nonstop turmoil. A bipartisan group of Colorado lawmakers had urged Interior Secretary Sally Jewell to sign off on an agreement (see Shale DailyOct. 23).

"I think what will get most of the attention is what BLM has identified as 'proposed action' -- a step before coming up with a 'preferred alternative' -- that would potentially cancel 18 leases and cancel portions of seven more leases," said the BLM spokesperson, adding that it is the 25 that would be of concern to the industry.

In the Roan Plateau, 17 leases were already cancelled. "In terms of the future, we could lease those again or close the area to leasing all together."

Commenting on the possible cancellations in the Thompson Divide DEIS, Sgamma said BLM could have made technical corrections but instead "chose to take the radical step of canceling valid existing lease rights. Once issued, leases are a property right granted to the leaseholder to develop energy on behalf of the American people."

Sgamma said BLM could have made technical corrections to the Roan leases, but instead "chose to take the radical step of canceling valid existing lease rights. Once issued, leases are a property right granted to the leaseholder to develop energy on behalf of the American people."

Sgamma said if BLM chooses that alternative, it will be breaking contractual agreements and ignoring the rule of law.

On the Thompson Divide DEIS, BLM indicated it would ultimately select one of the five alternatives, a "blend" of the options, or another completely different alternative. Whatever is ultimately selected will "fall within the range of alternatives being analyzed," the spokesperson said.

The five options being considered in the Thompson Divide DEIS are:

  • Reaffirming the lease stipulation on the 65 leases with no modifications and none  cancelled;
  • Modifying eight of the existing leases to address identified inconsistencies;
  • Modifying stipulations for all 65 leases, but not canceling any of them;
  • Canceling leases in areas identified as 'closed-to-leasing' in the U.S. Forest Service (USFS) draft 2014 decision; or
  • Canceling all 65 existing leases, with all producing wells plugged and abandoned.

Local communities have provided input regarding the alternatives, said BLM Colorado Director Ruth Welch. BLM "will continue to work toward finding a path forward that balances energy development and conservation, while recognizing the White River National Forest's planning efforts."

Both draft proposals are to be published on Friday (Nov. 20) in the Federal Register. Comments on the proposals would be taken through Feb. 18. White River Forest comments would be allowed through Jan. 8 with three public meetings held Dec. 14-16 in Glenwood Springs, DeBeque and Carbondale, respectively.

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