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Colorado West Slope Producers Lash Out at Feds Over Mancos Shale

Colorado oil/natural gas industry advocates lashed out on Friday at the Obama administration for "completely ignoring" new U.S. Geological Society (USGS) estimates on the extent of potential reserves in the Mancos Shale along the Western Slope. In play is the industry's long-held contention that leases on federal lands in the area should not be arbitrarily canceled.

In a joint letter to the U.S. Bureau of Land Management (BLM), the Colorado Oil and Gas Association (COGA), West Slope COGA, and the Western Energy Alliance (WEA) accused the U.S. Forest Service (USFS) and BLM of "disregarding" new information on the value and importance of the Mancos resource.

The trio of industry backers asked the federal agencies to reconsider comments to a draft environmental impact statement (DEIS) submitted in January, along with comments given at a subsequent conference held with USFS officials regarding moves to finalize its Forest Plan, which the industry has argued all but eliminates future natural gas leasing in parts of the Mancos.

West Slope COGA Executive Director David Ludlam told NGI's Shale Daily that the federal agencies have a legal obligation to consider the latest USGS estimates for the Mancos (see Shale Daily, June 8) before developing the final EIS and a record of decision on the Forest Plan.

"All of the analysis underlying the environmental assessment is no longer relevant or valid," Ludlam said. The agencies “have to conduct a reasonable development scenario, and the key word is 'significant' new information."

USFS and BLM have not issued the final environmental assessment and decision, so COGA and WEA are arguing they have no choice but to consider the updated USGS information that concludes the Piceance Basin's Mancos Shale in Colorado contains an estimated 66 Tcf of natural gas, sharply higher than a 2003 estimate of 1.6 Tcf. It is the second-largest assessment of potential continuous gas resources ever conducted by USGS.

"This announcement by USGS not only constitutes new information but is, in fact, 'significant new information' that triggers a legal obligation for BLM to reopen and republish the draft EIS alternatives," the groups said in their letter to BLM Project Manager Greg Larson in Colorado.

Contending that the goal of BLM leadership in Washington, DC, may be to complete the decision making on this area before the November elections, the letter noted that "the most significant upward revision in the history of USGS, if ignored, will constitute arbitrary and capricious action rending the ROD vulnerable to legal challenge."

New USGS data doesn't just move the resource estimates a few percentage points, but represent "a 40-fold increase" in technically recoverable natural gas within the White River National Forest, which has been a center of contention for years between the industry and federal government (see Shale Daily, Feb. 16).

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