Leaseholders on the Piceance Basin’s South Shale Ridge in Colorado last week were said to be “stuck in a schoolyard fight” between environmental groups and federal agencies after a judge ordered all activity to a halt.

Judge Marcia S. Krieger of the U.S. District Court for the District of Colorado vacated in part a plan by the Bureau of Land Management (BLM) to allow natural gas drilling on the basin’s South Shale Ridge because she said it violated the National Environmental Policy Act (NEPA). Krieger ruled in a case filed against BLM and the U.S. Fish and Wildlife Service by several environmental groups (No. 06-cv-00296-MSK-MEH).

The action centers on a 15-mile-long parcel of land about two miles west of DeBeque, CO, which is north of Grand Junction in the Piceance Basin. It encompasses more than 32,000 acres of land.

The South Shale Ridge is under the stewardship of the BLM, and after several decades of study, the federal agency ultimately concluded that its primary management emphasis would be to lease it for energy development. By 1992 all of the available acreage had been leased, and as of 2005, 30 leases remained active on about 11,000 acres, according to BLM.

But let’s back up a few years.

Following a wilderness inventory by BLM in 2001, the agency considered redoing its 1987 Resource Management Plan (RMP) to change the management priorities from energy development to conservation at South Shale. To reconcile the 2001 findings with the 1987 RMP, BLM began a process to determine whether oil and gas leasing would affect the quality of the natural and human environment in a “significant manner or to a significant extent.”

BLM issued its final environmental assessment (EA) in September 2005. The EA concluded that leasing could continue, and BLM dismissed one of its options, which was to allow “no surface occupancy” stipulations on the ridge. No surface exceptions allows drilling, but only allows companies to access the minerals indirectly.

The Wilderness Society, the Center for Native Ecosystems, the Colorado Environmental Coalition, the Colorado Mountain Club and the Sierra Club in turn filed a lawsuit to prevent BLM’s revised leasing plan from moving forward.

Fast forward.

Krieger last week ordered BLM to stop all leasing and prevent any lease from taking effect on South Shale Ridge because she said the BLM had not considered the full effect of drilling on endangered and threatened species in the region. She also said that BLM should have considered the option to allow energy companies to drill from outside the South Shale Ridge area to not harm the surface of the land.

“The BLM originally adopted slant drilling as an option, but abandoned the idea when it opened South Shale Ridge to gas development,” said Earthjustice attorney Keith Bauerle. Earthjustice represents the environmental groups suing the federal agencies. Krieger’s decision, he said, “forces the BLM to consider how gas development can proceed without destroying the environment.”

The court now has created a real dilemma, said the director of government affairs for the Independent Petroleum of Mountain States. Andrew Bremner told NGI the leaseholders are stuck in what he called a “schoolyard fight” that is being waged in court between the environmental groups and the federal agencies.

“The people who made bids for those leases did so because the lands were available for leases, and now people are fighting over it,” Bremner said. Bidders presumed “the proper analysis has been made [by the BLM] at the time the bid was made.”

However, Bremner noted that Krieger’s ruling was “not a broad-based condemnation of the BLM’s procedures,” but rather, “a real fine point of the law.” The ruling noted that it was not the court’s place “to say whether or not oil and gas is the right use” of the land, but is instead to determine whether BLM had obtained adequate consultation about the hookless cactus and other threatened species located there.

“Many NEPA decisions come down to judicial interpretation,” Bremner said. “The court indicated that the BLM adequately consulted on nine out of 16 parcels…In terms of an [energy] industry position, [this court case] ties up investment capital that could be used to get more production online for American consumers. That capital is locked up while these guys duke it out. It is unfair to the producer who is successful at bidding on the leases. They are caught in the middle of it.”

Jaime Gardner, public affairs specialist with the BLM, told NGI, “sometimes, some of these court cases become a perpetual litigation.” Going forward, she said the BLM will take another look at the planning processes done on South Shale Ridge and how the South Shale Ridge court decision was reached. “We are required to follow NEPA and take that responsibility seriously.”

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