EcoFlight flew the reporter over the Thompson Divide for this and other related stories:
The Bureau of Land Management (BLM) announced Tuesday that it has approved requests from two oil and gas companies to suspend the expiration dates of their Thompson Divide mineral-rights leases.
Approving the requests prevents any extraction activity during the suspension period and pauses the 10-year deadline leaseholders have to develop their mineral rights. The BLM suspended the companies’ mineral rights starting retroactively on Feb. 1, the date the companies submitted their suspension request to the BLM.
The decision comes amid protests from environmental groups, who saw the requests as a delay tactic on the part of the oil and gas companies. In February, Carbondale-based Wilderness Workshop, an environmental nonprofit, launched a campaign that asked the community to voice its opposition to suspending the leases called “Let the leases expire,” and the Thompson Divide Coalition, a nonprofit made up of drilling opponents, delivered more than 1,150 letters to the BLM urging the agency to deny the request.
The Thompson Divide encompasses 221,500 acres of federal land west of Carbondale running from the Sunlight Ski Area to McClure Pass crossing Pitkin, Gunnison, Garfield, Mesa and Delta counties. There are 61 undeveloped mineral rights leases in the area of which 18 are held by Houston-based SG Interests and seven are owned by Ursa Resources, LLC. In February, the two companies filed separate requests with the BLM for more time to develop their natural gas wells in the Thompson Divide.
SG Interests last fall began submitting applications to drill on its individual leases. In May 2011, it submitted a “unitization request” which would bundle all the leases together in a manner that would allow the company to drill throughout its lease holdings if one productive gas well could be developed. That request is still pending. Ursa Resources has also began seeking permission to drill.
The suspension request was granted, in part, to give the BLM additional time to conduct a broad environmental analysis on the companies’ development proposals under the National Environmental Policy Act (NEPA). Drilling opponents argue that the Thompson Divide leases should not have originally been issued by the BLM, because the agency never performed its own analysis of the area. Ultimately, the leases could be voided, reaffirmed or modified as an outcome of the additional environmental analysis, according to BLM Colorado River Valley Field Manager Steve Bennett.
The BLM plans to complete the new assessment and end the suspension on April 1, 2014. If the leases are upheld, the drilling companies will have the same amount of time to develop their mineral rights that they had on Feb. 1 before the leases expire.
The suspension will also allow for additional discussions between stakeholders in a good faith attempt to address their concerns, the BLM said in a press release.
The Thompson Divide Coalition is leading the effort to preserve the area and has tried to negotiate with leaseholders. Last year, oil and gas companies declined an offer from the coalition to buy back existing leases for $2.5 million.
Zane Kessler, executive director of the coalition, said he is hopeful that with the suspension granted, there will be more time for the nonprofit to negotiate with drilling companies.
“We’re disappointed that the BLM didn’t consider the thousands of comments already submitted,” Kessler said in a press release. “But we believe the added conditions clear the way for future public involvement and a formal opportunity for our communities to be heard.”
The coalition will also spend the next few months preparing the community for the public comment period that will occur during the NEPA process, he said.
“We’re going to work like hell to try to keep everybody engaged,” Kessler said.
Drilling opponents also argue that the suspension requests should be denied, because SG Interests and Ursa Resources didn’t develop their leases until the last minute. The companies have owned their leases for 10 years but did not develop them because the commodity prices were low and the venture wouldn’t be profitable, conservation groups argue.
David Boyd, BLM spokesperson, said that the argument was considered when the BLM was making its decision to grant the requests, but because SG Interests proposed to unitize their leases in 2011 and Antero Resources Piceance Co., which formerly owned Ursa Resources leases, requested that their leases be unitized in 2009, the agency decided that the companies had made valid attempts to develop them.
“They made a good faith effort to develop the leases,” Boyd said.
In the meantime, the BLM is still considering the companies’ unitization requests and a decision will likely come out of the NEPA process, he said.
Robert H. Guinn, vice president of SG Interests, said in a press release that the company is pleased with the decision and glad the BLM acknowledged the company’s rights to develop. Guinn also acknowledged that the suspension will give SG Interests more time to negotiate with the Thompson Divide Coalition.
“SG [Interests’] strong preference is to develop these leases and to do so in a way that meets and exceeds environmental standards,” Guinn said. “Although we question BLM’s legal authority to reexamine a lease issuance decision made close to a decade ago, we welcome the initiation of the NEPA process for the proposed Lake Ridge Unit.”
Colorado U.S. Sen. Michael Bennet also issued a statement on Tuesday saying that he was pleased to see that the BLM has recognized the importance of the ongoing community dialog over future development. Bennet introduced a bill in the U.S. Senate in March that would withdraw a portion of public lands in the Thompson Divide from consideration for future sales, and offers current lease holders the ability to donate, exchange, or retire their mineral rights.
“The suspension decision underscores the need to continue the discussions on the ground and pass the bill we introduced last month,” Bennet said. “Passage of that bill, coupled with a negotiated agreement on the existing leases, will give much-needed certainty to these communities and the local businesses that depend on the Thompson Divide for their livelihood. We’ll continue to engage with all stakeholders and work to move the bill forward as quickly as possible in the Senate.”