Colorado could profit with up to $1.2 billion in revenue in the first year of a federal plan to allow natural gas drilling on the Roan Plateau, according to a study by an industry-led energy advocacy group.
According to an economic analysis issued by Americans for American Energy (AAE), Colorado stands to benefit from the economic impact of more than $11 billion in energy investment over the life of the project, which would allow drilling on about 52,000 acres of the 70,000-acre U.S. Naval Oil Shale Reserves on the plateau. Over 30 years, the group said, Colorado would collect up to $6 billion in royalties and production taxes.
AAE's CEO is Greg Schnacke, who served as executive vice president of the Colorado Oil & Gas Association for 13 years. The group is chaired by Wyoming State Senator Bill Vasey (D-Rawlins, WY).
The Naval Oil Shale Reserves are located west of Rifle, CO, and northeast of Parachute, CO, an area with substantial natural gas reserves. The oil shale reserves were designated in 1916 by the Wilson administration as a back-up source of oil for navy ships. However, extracting oil from the shale formations proved too expensive, and in 1997 Congress transferred the reserves to the Bureau of Land Management (BLM), which was charged with leasing the area as soon as practically possible.
Following a series of draft environmental impact statements and public comment periods, BLM is still at least six months away from a decision on whether to grant leases in the region. In June, BLM in Colorado recommended opening up about 34,000 acres of the region to drilling (see NGI, June 18), but the decision has been met with heavy protests by environmental groups and state legislators.
U.S. Rep. Diana DeGette (D-CO) has recommended banning drilling on a large portion of the plateau (see NGI, Sept. 17). In August, Colorado Democratic Reps. March Udall and John Salazar included a measure to prohibit gas drilling on the Roan in the energy policy reform legislation (see NGI, Aug. 6). And U.S. Sen. Ken Salazar (D-CO) has asked BLM to provide a 120-day extension for the state to review and comment on the resource management plan for the plateau.
U.S. Sen. Wayne Allard (R-CO) said last week that BLM's proposed plan offered a "limited and reasonable development plan for the Roan Plateau. Companies interested in leases on the plateau have committed to responsible and environmentally sensitive development. This study just contributes to the widely held sentiments in Colorado that the prevention of development in this area of our state would turn away over a billion dollars needed for local communities.
"A 'fly-over' of the area does not always provide the clearest picture of a situation. The last time I visited the Roan, I drove the roads and visited the local schools that will benefit from this responsible development. Both the roads and the schools are stressed and in need of upgrades and repairs. These funds will allow that."
To read the economic analysis, visit www.americansforamericanenergy.org.
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