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Salazar Says Interior Won't Withdraw Roan Plateau Leases

Interior Secretary Ken Salazar said he is not withdrawing oil and natural gas leases that were issued for western Colorado's Roan Plateau by the Bush administration even though the management plan to drill on the plateau is being challenged in court.

Salazar, who was critical of the Bush administration's plan to develop the plateau when he was a Colorado senator, started exploring a possible settlement of the lawsuit by environmentalists after taking over as Interior Department secretary, he told The Daily Sentinel in Grand Junction, CO, last Wednesday. But Salazar said the Roan leases, unlike the Utah leases that Interior withdrew, were signed by the department, and as a result "he has to protect the legal contracts" with Roan producers, an Interior spokesman related.

The Roan Plateau and Utah leases are at "different legal places," the spokesman said.

A year ago Interior's Bureau of Land Management (BLM) auctioned 31 parcels on 55,186 acres of the prized Roan Plateau in Colorado for natural gas and oil development (see NGI, Aug. 18, 2008). Denver-based Vantage Energy LLC, which is headed by former EnCana Corp. executive Roger Beimans, grabbed most of the bids, according to BLM.

BLM requires that the Roan Plateau be developed in phases, a stipulation also urged by Colorado Gov. Bill Ritter. Under BLM's Resource Management Plan for the plateau, drilling is only allowed on 1% of the land on top of the plateau at any one time -- or no more than 350 acres at a time. It could require energy companies to take several years to develop a lease.

The Roan Plateau holds an estimated 9 Tcf of gas, according to BLM. Revenue from leases and royalties on gas sales could generate between $857 million and $1.13 billion over the next two decades, with Colorado receiving about half of it, according to the federal agency.

A lawsuit was filed by 10 environmental groups in July 2008 to block leasing on the Roan Plateau until federal officials evaluate alternatives to develop the region's energy resources (see NGI, July 21, 2008). It still is pending. The lawsuit charges federal officials with not adequately studying the potential impact of new drilling on air quality and wildlife habitat.

In February Salazar, citing the proximity of certain parcels to landscapes of national significance and the need to conduct additional environmental review, withdrew producer leases to develop oil and natural gas on 77 parcels of public lands in Utah (see NGI, Feb. 9). His action overturned the results of a lease auction held in the final days of the Bush administration. With respect to the Utah leases, "Interior hadn't signed [them]," which allowed the department to pull out of those contracts, the spokesman said.

In June Interior issued a report that called for an expeditious review of the 77 parcels in Utah, which were auctioned in December and then later withdrawn, to determine whether they should be reoffered to producers for oil and natural gas development. It recommended that reinstatement of certain leases may be appropriate following the review (see NGI, June 15).

After completing its review, Interior's BLM team will determine whether the Utah parcels should be reoffered to the original bidders under the same conditions as previously specified; the parcels should be reoffered for oil and gas development but under different terms than had been specified in the original offering; or, the parcels should be deferred from leasing.

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