Legislation to prevent natural gas drilling on the Roan Plateau would destroy “years of effort” by locals who support energy exploration, Sen. Wayne Allard (R-CO) said last month.
Allard and Colorado state Sen. Josh Penry (R-Fruita) were in Grand Junction, CO, to build support for the Bureau of Land Management’s (BLM) plan to allow restricted natural gas drilling on the Roan Plateau and in the Vermillion Basin.
The BLM in June issued a record of decision (ROD) to allow drilling on 34,000 acres of the plateau (see NGI, June 18). It was ready to more forward with lease sales, but Gov. Bill Ritter, a Democrat elected last November, requested more time to review the plan, and following some maneuvering by state legislators, Colorado was given four more months to study and comment on the agency’s resource management plan (RMP) (see NGI, Aug. 13).
Besides voicing his support for the BLM plan, Allard also railed against proposed federal legislation that would allow “no surface occupancy” on public lands atop the plateau. Colorado Democratic Reps. Mark Udall and John Salazar inserted the surface rules into the massive U.S. House of Representatives’ energy bill.
The bill passed the House in a bipartisan vote in August (see NGI, Aug. 13), but the Udall/Salazar provision has infuriated some Colorado politicians. If the bill passes the House-Senate conference committee without changes, energy companies would be forced to drill indirectly from private land in order to access the Roan’s minerals.
“This action by the House wipes out years of effort by locals who support energy exploration and completely ignores the history of the area,” Allard said during the press conference. “BLM worked on the RMP for seven years. I’ve been supportive of that all along. I think it would be harmful to the process if all of a sudden I took a different position from where they’re going.”
The proposed drilling plan is “responsible and restrictive,” and Allard “wholeheartedly supports the BLM,” Allard spokeswoman Tara Hendershott told NGI.
Reserves obtained from the Roan Plateau would allow “significant royalty payments to Colorado and the federal government, and I think people would be loath to walk away from a revenue stream of that magnitude,” Penry said.
Penry told NGI that he and Allard “admonished Gov. Ritter as well as Salazar and Udall to use this 120-day period to bring forward ideas and enter into a dialogue.” He added, “We haven’t seen anything productive or constructive” from the opposition.
Penry also wants the state to be compensated at a higher rate for “responsible production” in Colorado. Penry, who is a member of the Colorado Severance Tax Committee working group, said he is “taking a look at how the state should invest the proceeds from this nonrenewable resource over the long term.” Severance tax revenue has “tripled in the last six or seven years, and the time is past due for us to take a look at this.”
Under current law, all funds derived from mineral leasing on federal lands are split 50-50 between the federal government and the states where the leasing occurs. If Colorado received 60 or 75 cents on the dollar, the compensation over a 30-40-year period would be “probably hundreds of millions of dollars in additional revenue that would flow back on top of what’s already projected,” Penry said.
The Colorado Environmental Coalition’s Joe Neuhof, the western field director, told NGI that he and other conservation organizations are hopeful that the Udall/Salazar provision inserted into the energy bill will eventually become law. He said environmental groups believe the BLM’s ROD “ignores public opinion [and] jeopardizes wildlife, recreation and backcountry lands.”
In related news, approved applications for permits-to-drill (APD) in Colorado are up 4% from the same time a year ago and are on pace to break all previous records, the Colorado Oil & Gas Conservation Commission (COGCC) said in a report.
As of Aug. 22, the COGCC had approved 3,952 APDs statewide. At this rate, the commission estimated that about 6,160 APDs will be approved in 2007.
“This represents a 4% increase over the previous record high of 5,904 APDs approved in 2006, which was more than double the 2,915 APDs approved in 2004,” the COGCC said.
Of the top seven counties with APDs, more than a third, 1,497 (38%) were for operations in natural gas-rich Garfield County. For the same time in 2006, the COGCC had approved 1,844 APDs in Garfield, or about 31% of the statewide total. Weld County’s APDs totaled 993 (25%), which compares with 1,418 (24%) for the same period of 2006.
Yuma County’s APDs totaled 341, or 9% of the statewide numbers, while Las Animas County’s APDs totaled 249 (6%) of the total. Mesa County captured 5%, or 190 APDs, while Rio Blanco had 184 (5%) and La Plata had 121 (3%). The other APDs were spread across several counties, the COGCC said.
Two-thirds of Colorado’s counties, or 42 of 63, have wells located in them. About 20% have at least 200 wells, and Weld County had the most wells at more than 10,000 last year. Rio Blanco and La Plata counties each have more than 2,000 wells, and Garfield, Weld and La Plata counties led the state in gas production last year.
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