A final oil/natural gas leasing plan released Thursday for the White River National Forest in Colorado effectively closes the possibility of any new drilling in the Thompson Divide area that has captured the industry's eye for some time.
Longer term, of particular interest is whether opportunities to develop the Mancos and Niobrara shales will be reduced by the latest actions, industry sources said.
A final record of decision (ROD) was approved to amend the White River National Forest's land and resource management plan, including amendments to its oil/gas leasing provision, making 194,000 acres of the 2.2 million-acre national forest lands available for leasing.
Part of several years of environmental and other regulatory reviews and separate from Thursday's ROD, the Bureau of Land Management (BLM) in Colorado last month issued two draft environmental proposals that carried the potential to set back future oil and natural gas development in parts of western Colorado, including previously issued leases in the Thompson Divide and Roan Plateau (see Shale Daily, Nov. 19).
The ROD effectively closes 1.3 million acres to oil/gas leasing, said Kathleen Sgamma, Western Energy Alliance (WEA) vice president for government and public affairs. The BLM draft environmental work focused on 65 leases sold in 2004 for which the agency has indicated it would retroactively cancel all or part of 25 leases in areas that the forest service plan closes future leasing.
"This is obviously retroactive application of new policies and frankly a breach of contract," Sgamma told NGI's Shale Daily on Friday. "WEA will be commenting on the draft document as part of an ongoing public comment period, but we don't expect to change BLM's mind; so it is likely the issue will have to be settled in court as companies will need to defend their property rights."
The region has been a war zone for energy developers and environmentalists. There was hope earlier this year of working out an all-party settlement among local county, industry and environmental officials for a land exchange(see Shale Daily, April 9).
For WEA's Sgamma, the Obama administration has acted with "lawlessness" on many energy development issues on public lands.
Industry representatives see political leaders in Washington, DC, attempting to closely coordinate the separate U.S. Forest Service (USFS) and BLM plans related to oil and gas development. The actions are seen not as "plans," but rather as "bans" on public access to minerals on public lands, said David Ludlam, head of the Colorado Oil and Gas Association's (COGA) Western Slope chapter.
"When you combine what the USFS and BLM are doing, it is all designed to keep natural gas production out of the White River National Forest, Ludlam said, adding that the ROD was somewhat expected and not as concerning as the ongoing BLM environmental review processes' impact on oil/gas development.
Part of the justification used for closing 1.3 million acres is that there is no real resource potential, but they based that on a report commissioned by the Thompson Divide Coalition, an environmental activist group, Ludlam said. "In that report they omit the Mancos and Niobrara shales, focusing exclusively on the shallow coal and sandstones. The big problem with that is almost all the potential in that area is with the Mancos and Niobrara."