Following five years of public debate and analysis, the federal government cleared the way Wednesday to develop natural gas wells on thousands of acres in a formerly roadless area of the northern San Juan basin.

The Record of Decision (ROD) by the U.S. Forest Service and the Bureau of Land Management (BLM) will allow the Northern San Juan Basin Coalbed Methane (CBM) Development Project in Archuleta and La Plata counties, CO, to move forward. The Final Environmental Impact Statement (FEIS) on the proposed project was issued last year, offering several alternative proposals (see Daily GPI, Aug. 8, 2006).

"We appreciate that the public and the proponents encouraged us to take the time we needed to get this right," said Mark W. Stiles, San Juan public lands forest supervisor and BLM center manager. "At the end of our several years of analysis, I have found that, with careful measures, development can go forward so that we allow companies to enjoy their lease rights while minimizing impacts to the environment and risks to health and property."

Six companies -- HEC Petroleum, XTO Energy, Petrox Resources, Elmridge Resources, Exok and BP America -- originally proposed drilling 185 CBM wells and constructing the ancillary facilities needed to support these wells within the basin. The ROD will allow 127 wells to be drilled and 93 miles of roads and pipelines to be built in the area straddling the two counties.

About 300 well pads and 200 miles of roads already have been developed in the contested portion of the basin, but the ROD focuses on the HD Mountains, parts of which had been designated roadless. Except for the Southern Ute Reservation, total CBM reserves, including production as of August 2006, are estimated at 2.5 Tcf.

In issuing the ROD, Stiles selected FEIS Alternative 7, which seeks to balance lease rights with environmental concerns. The ROD will require producers to gather data on drilling impacts in less sensitive areas along the Fruitland Formation outcrop before development is allowed in more sensitive areas, and by identifying areas in the HD Mountains Roadless Area that are not suitable for development using currently proposed techniques.

"Future drilling within 1.5 miles of the outcrop of the Fruitland Formation may be permitted under very limited circumstances," Stiles wrote. "Within Archuleta County, drilling within 1.5 miles of the outcrop will be permitted following an incremental, monitor-and-evaluate-as-you-go approach."

Because drilling already is under way on some privately owned lands, "our approach will take advantage of this drilling that will occur, to a great extent, outside of federal authority, working cooperatively with the Colorado Oil and Gas Conservation Commission and others to build our knowledge of geologic and hydrologic conditions," he wrote.

"Natural gas development has long been part of our landscape in southwestern Colorado," Stiles wrote. "Obviously, the Northern San Juan Basin CBM project has posed some very difficult and complex social and resource management issues...The active involvement of all stakeholders and the open and frequent dialogue that took place has, I believe, led to a set of very workable and effective decisions."

To read the 57-page ROD, click here.

©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.