WASHINGTON, Nov. 23, 2016 - Federal officials and Colorado
Gov. John Hickenlooper last week tried to put an end to a longstanding dispute
by announcing the cancellation of 25 oil and gas leases in Colorado’s White River National Forest. But the
company holding many of the leases promises to challenge the decision in court.
The decision, which may have allayed some concerns of environmental
groups and community organizers about potential development in the forest’s
Thompson Divide, was announced
on Nov. 17 by Hickenlooper, Interior Secretary Sally Jewell and Bureau of Land
Management (BLM) Director Neil Kornze.
“This resolution strikes the right balance by protecting one
of Colorado’s most spectacular places and important watersheds, and ensuring
that any future development is done responsibly and held to high standards,”
Jewel said.
The Thompson Divide encompasses some 221,500 acres of federal
land on the eastern fringe of the natural gas-rich Piceance Basin. The
U.S. Geological Survey estimates that the formation holds 66 trillion cubic feet
of natural gas, the second-largest assessment of potential shale and tight gas
resources that the agency has ever conducted.
“This is a resolution that protects the beautiful environment
of the Thompson Divide, that acknowledges the investments companies have made
in the area and lets people get back to business,” says Hickenlooper. He says
the decision reflects the hard work of local governments, industry, engaged
residents and federal partners to reach a “balanced solution.” Hickenlooper has
previously described
the area as Colorado’s “crown jewel.”
Sen. Michael Bennet, D-Colo., who introduced the Thompson
Divide Withdrawal and Protection Act in 2013 in response to bipartisan
requests from Colorado communities and local governments, notes that ranchers, sportsmen,
outdoor enthusiasts and elected officials who live in the area’s communities
feel that speculative leases in the Divide jeopardize their local
economies.
“Today’s announcement is a significant step towards
addressing those concerns,” says Bennet.
BLM analyzed
some 65 oil and gas leases, located primarily on lands managed by the White
River National Forest. The Department of the Interior (DOI) says the Record
of Decision (ROD) puts in place appropriate environmental protections for
the “pristine portion” of Colorado’s Western Slope.
The ROD addresses deficiencies in the original environmental
analyses and the process used to support the initial issuance of oil and gas
leases in the region, DOI says.
In addition to the cancellation of the leases in the
Thompson Divide area, BLM says it will apply new stipulations and conditions
that are consistent with recent Forest Service decisions on the remaining
leases that are not currently producing oil or gas. DOI says it will make no
adjustments, or only minor adjustments to the leases that are currently
producing oil and gas.
None of the 25 leases being canceled are producing, Interior
says, and amount to less than half of 1 percent of the active leases on public
lands in Colorado. Meanwhile, DOI notes that the vast majority of the lands in
the Thompson Divide area are used for agriculture, sporting, recreation or
are undeveloped open space.
But SG Interests, which holds 18 of the 25 leases,
comprising over 21,000 acres in the “prolific Piceance Basin,” says the
cancellation amounts to a violation of the law “by taking private property
rights and/or a breach of the lease contracts.” In a statement to Agri-Pulse, the company says it intends
to seek relief in the courts.
And, SG contends, BLM will find it difficult to defend its
actions.
“Documents obtained through FOIA (the Freedom of Information
Act) clearly show that the retroactive NEPA
(National Environmental Policy Act) the BLM used to cancel SG’s leases was a
predetermined political decision from the Obama administration taking orders
from environmental groups,” SG said in a statement.
SG contends that all 65 of the leases subject to the retroactive NEPA “suffer from the same administrative error” – consisting of BLM not formally adopting the original Forest Service leasing level under NEPA. SG believes that all 65 of these leases are valid – and that none should have been canceled.
However, the company says that if a court finds that all of
the leases were improperly issued, then all of the leases should have been
canceled.
“By canceling some of the leases and allowing others to
stand, the BLM is acting in and arbitrary and capricious manner,” SG says.
SG still owns lease rights in the Wolf Creek Storage Unit,
which covers 9,200 acres of federal leases next to the leases that were canceled.
Since the Wolf Creek leases were not subject to the retroactive NEPA, SG says
it will proceed to develop these leases.
“SG has faith that the new Trump administration will
re-establish confidence in government lease contracts,” the company says.
“It is our hope that the new administration will realize
that without the sanctity of a federal contract and the rule of law, federal
minerals will not be developed by the private sector.”
BLM also announced
that it had formally adopted the Forest Service’s 2014
White River National Forest Oil and Gas Final EIS analysis for use in its
leasing decision on the White River National Forest going forward. The Forest
Service has identified the majority of the Divide area as closed to leasing.
Bennet says he will continue to work with community members
and industry to determine whether a legislative compromise can permanently
protect the Divide and provide market-based compensation for those who have just
had their leases canceled.
BLM has also issued
a ROD fully adopting the terms of the 2014
Settlement Agreement that resolved litigation surrounding the Roan
Plateau Resource Management Plan.
The Interior Department says the action represents the final
step in the “landmark settlement” announced almost two years ago that brought
together local, state, industry, sportsmen and conservation leaders.
BLM’s Record of Decision closes the area on top of the
plateau to future leasing where some 17 oil and gas leases were previously
canceled. In areas that remain open to leasing, BLM says that development
will be subject to the terms and conditions to ensure safe and responsible
development.
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