Oil and gas leases held within miles of Glenwood
Glenwood Springs, CO Colorado
ROARING FORK VALLEY, Colorado ” A Texas company holds an oil and gas lease on land underneath most of Sunlight Mountain Resort, but don’t expect to see drill rigs on the slopes.
“Well, obviously we would not be able to drill any wells in or around the ski resort. We wouldn’t attempt to do that,” said Robbie Guinn, vice president of SG Interests.
The portion of land under Sunlight is part of a larger oil and gas lease that stretches west.
SG Interests and EnCana are two of the companies that hold leases on an edge of a high potential zone for natural gas connected geologically to the Piceance Basin. Part of the area’s eastern boundary, and oil and gas leases on it, are within about five miles of Glenwood Springs and Carbondale, although the closest wells producing natural gas are a few miles farther away in the area of Baldy Creek and the Garfield Creek State Wildlife Area.
The edge of the high potential zone and a block of land west and south are almost completely covered with oil and gas leases on the map. That includes the Thompson Creek area southwest of Carbondale. Many of the leases in that area were purchased in 2003.
“Essentially all the Forest Service land in that area is leased,” said BLM spokesperson David Boyd. “Over the next 20 years we expect that we’ll continue to see oil and gas activity in that high potential area.”
No immediate plans
SG Interests holds a number of leases on land in the areas near Thompson Creek’s headwaters north to Sunlight Mountain Resort. But there don’t appear to be any plans to start drilling there any time soon.
“We do not have any immediate plans to develop that area,” said Guinn, of SG Interests.
EnCana spokesman Doug Hock said, “We have no plans to drill that area this year and it’s unlikely we’ll drill there in the foreseeable future. Given the current economic conditions, we’re focused on a reduced drilling program.”
Most or all energy companies announced scaled back drilling plans in the Piceance Basin this year due to the lower price of natural gas, a lack of pipeline capacity to carry it to markets, and what some say is regulatory uncertainty.
Hock said possibilities for the 5,242 acres of EnCana leases, which expire after 10 years without production, include selling them or “earn-in” agreements where another company can pay a certain amount for some ownership and exploration.
SG Interests has also reduced its activity. The company plans to drill three wells this year and is focusing on its Bull Mountain Unit in the Muddy Creek area west and southwest of McClure Pass. It expects to finish its Bull Mountain Pipeline this summer, which will stretch 25.5 miles from there up to a Divide Creek Compressor Station. The gathering pipeline will allow SG Interests to move gas out of Muddy Creek area to interstate pipelines, Guinn said.
The controversial pipeline ended up in federal court after environmental groups and Pitkin County sued federal government agencies last year. They eventually lost an appeal. They contended that by approving the pipeline and a 100-foot-wide construction corridor, the Forest Service and BLM violated a 2001 roadless rule, which prevents building roads on millions of acres of federal forest land.
Sloan Shoemaker, executive director of Wilderness Workshop, said the pipeline is concerning because it could create incentive to develop more leases nearby.
“Our concern is that gas development follows pipeline development,” he said. “That’s going to turn what is right now a very rural and wild area with great wildlife and recreation values into an industrial zone like you see at the base of the Roan Plateau.”
Others say gas development can be done responsibly with minimal environmental impact and it provides much-needed job growth, tax revenues and fees.
Wilderness Workshop contends a number of the leases in the Thompson Creek and nearby areas were issued illegally under the 2001 roadless rule. It’s been pursuing strategies to permanently protect the Thompson Creek and Divide Creek headwaters from energy development, including a possible private buyout of the leases and either administrative or Congressional withdrawal of the lands from availability for future leasing, Wilderness Workshop says on its website.
In December 2007, the Interior Board of Land Appeals sided with Pitkin County, Carbondale, and environmental groups by setting aside a BLM decision to reject their protests to two leases in the area of Thompson Creek and one further west. The leases were around 800 acres each or less. As of Friday they were suspended and no action could be taken on them.
Shoemaker said oil and gas leases in places like the one on Sunlight Mountain Resort are “an example of the previous administration’s rush to lease without consideration of surface holders and surface values.”
“The BLM was just rubber-stamping these leases without really cross-referencing what the surface values were that would be jeopardized by that,” he said.
But BLM spokesman David Boyd said there was actually more leasing in the area covered by the BLM’s Glenwood Springs Field Office 25 years ago. In 1983, oil and gas leases covered 460,000 acres in the office’s area, while now there are around 200,000 acres leased, he said.
“There’s a lot more development than there was, but has all this suddenly just opened up for oil and gas leasing? No. It’s been open since the 1920s with the exception of the Roan Plateau. … It was the economy and the technology that really drove it.”
Shoemaker said he didn’t get word of any intentions to develop leases in the area of Thompson Creek even when gas prices were high last summer. He said leases there and nearby are more difficult to access and more expensive to develop.
“With the gas prices the way they are and the cost of developing these leases as high as it is, apparently there’s not a whole lot of economic incentive to get in there and develop them,” he said.
Energy companies nominate areas for oil and gas leases before they’re included in a lease sale. To actually develop a lease, companies must apply for a permit to drill and undergo review by federal agencies meant to ensure development complies with the National Environmental Policy Act. The review includes opportunity for public comment and protest.
Contact Pete Fowler: 384-9121
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