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The Bureau of Land Management smashed records last week with a controversial sale of oil and gas leases in Colorado's Roan Plateau, taking in $113.9 million, but critics said the amount fell short of earlier predictions.
BLM officials said the auction ranks as its highest grossing onshore oil and natural gas lease sale ever in the lower 48 states. But the agency will not issue the leases until protests by the state of Colorado, local governments and environmental groups are decided -- and that could take months.
"Today's lease sale does not authorize drilling," BLM Colorado State Director Sally Wisely said Aug. 14. "Additional environmental analysis and public planning will occur prior to any drilling on the Roan Plateau. Future environmental analysis and planning will ensure that the public's tremendous natural gas reserves in the Roan Plateau are recovered in an economically and environmentally responsible manner."
BLM sold a total of 54,631 acres in 31 parcels. The plateau holds an estimated 9 trillion cubic feet of natural gas.
'A sad day'
Conservation groups and Colorado Democrats slammed the sale. Environmentalists said drilling in the area would severely damage wildlife habitat for numerous species. Gov. Bill Ritter (D) called it a "sad day for Colorado" and accused the Bush administration of trying to push through the sale in its waning days.
The industry-sponsored group Americans for American Energy had predicted the sale could bring as much as $2 billion. "Today, when the bids came in at only $114 million, we learned just how wrong and over-exaggerated those claims were," Ritter said.
Ritter was pushing a phased leasing strategy, allowing the price of natural gas and the value of the acres to increase, and said the "all at once" lease sale resulted in "vastly undervalued bids."
"The federal government has done a tremendous disservice to our state and to every Western Slope community impacted by drilling," Ritter said.
But industry groups said the protests and a lawsuit by environmental groups were the reasons for the low sale prices.
The Independent Petroleum Association of Mountain States lauded the sale of "a tiny portion" of Roan Plateau public lands. The group noted that Congress authorized BLM a decade ago to lease those areas.
"In 1997, Congress directed the BLM to lease these lands for energy development 'as soon as practical,'" said IPAMS executive director Marc Smith. "We believe that a 'practical' time frame has long passed and that now is the time to allow responsible energy development on these lands."
Smith said the BLM plan for the area is the "most environmentally restrictive plan for managing oil and natural gas development on public lands" and said all interested groups had a seat at the table.
BLM said development on top of the plateau will be confined to existing road corridors, with surface disturbance limited to about 1 percent of federal land, or 350 acres, at a time.
Colorado will receive 49 percent of the sale proceeds and 49 percent of future production royalties, with 51 percent going to the federal government. The money will not be dispersed until protests to the sale are settled.
Some of the state's Democratic lawmakers had tried to get Congress to block the sale.
"Today's auction represents bureaucratic arrogance on a scale that is truly stunning," said Rep. Mark Udall. "The Bush administration has basically told the Western Slope to sit down and shut up."
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