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BLM Green Lights Up to 146 NatGas Wells in Long-Disputed Colorado Area

The North Fork Valley near Paonia, CO, along the Western Slope, an area that SG Interests Ltd. has sought to develop for years, has been tentatively approved for drilling up to 146 natural gas well by the Bureau of Land Management (BLM).

BLM this month gave environmental approval for the  Bull Mountain Unit Master Development Plan (MDP), which covers nearly 20,000 acres. SG has sought approval since 2008 to develop federal and private mineral leases within a federally unitized Bull Mountain area.

BLM’s permit conditions initially allow only one well to be drilled. SG is required to mitigate impacts to air resources/air quality, water resources and wildlife.

The decision to approve one application for a permit to drill “does not guarantee approval of additional wells," a BLM spokesperson said. "Any future federal applications must go through site-specific environmental review."

The boundaries of the Bull Mountain Unit in Gunnison County consist of 12,900 acres of split-estate lands, including private surface and federal mineral estate lands administered by BLM, 6,330 acres of fee lands consisting of private surface and private mineral estate, and 440 acres of federal surface lands and subsurface mineral estate.

In addition to the proposed gas wells, SGI initially planned to drill four water disposal wells and associated infrastructure on federal mineral leases. The MDP also outlined drilling plans, surface-use operational plans and future production plans.

"As part of the final environmental impact statement, BLM considered conceptual locations for the exploration and development project," the record of decision noted. It also indicated that initial subsurface fluid studies and previous gas drilling indicate "the potential for economically viable reserves of natural gas in the area."

While environmental groups have opposed plans for oil and gas operations in the area, BLM’s Dana Wilson, acting southwest district manager, said the approved plans were developed "through close coordination with stakeholders and cooperating agencies. It represents the best combination of management decisions to allow SGI to exercise its lease rights while limiting the impacts to natural resources.”

BLM estimates that the drilling phase of the project could generate up to $100 million in employment income and 470 jobs annually. The production phase also could generate up to $14 million in employment income and 135 jobs annually.

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