BLM hits pause button on controversial Thompson Divide leases

Posted: Apr 10, 2013

Written by

Phil Taylor, Greenwire
Thompson Divide

The Bureau of Land Management today announced it is extending the life of about two dozen oil and gas leases set to expire in Colorado's Thompson Divide area, a move designed to buy time for additional environmental reviews and to allow more talks with local groups and governments that oppose drilling there.

The lease "suspensions" give BLM an additional year to complete environmental reviews for SG Interests and Ursa Resources Group to develop leases originally purchased in 2003 that were set to expire in the coming months, BLM said. Both companies in February had requested the extensions, arguing that BLM's environmental reviews would take too long for them to begin development.

Federal oil and gas leases expire after a decade if no minerals are produced.

The agency said it will also undertake additional reviews to "remedy a defect" when the leases were originally sold, namely a lack of National Environmental Policy Act analysis, to determine whether the leases should be voided, reaffirmed or subject to new environmental protections.

The decision gives a coalition of ranchers, sportsmen and environmentalists more time to raise money needed to buy back leases covering roughly 100,000 acres in the Thompson Divide, an area valued for its clean headwaters, intact habitats and diverse wildlife.

An opening bid last year by the Thompson Divide Coalition to buy back the leases for the same amount industry paid for them a decade ago was rejected.

"The lease suspensions allow the BLM additional time to complete environmental analyses on the companies' leases and their development proposals," said Steve Bennett, field manager for BLM's Colorado River Valley. "These suspensions will also provide the community and the leaseholders an opportunity to continue their dialogue on the future of the leases in the Thompson Divide area."

Local opposition to drilling in the Thompson Divide intensified after SG Interests in 2011 sought to develop its leases, and particularly last fall after it filed six applications to drill in areas near and underneath Colorado's roadless areas. Gov. John Hickenlooper (D) recently said he backed local ranchers, sportsmen and county officials who oppose drilling in the area, calling it too scenic to be developed.

BLM's suspension follows a weeks-long push by the Carbondale, Colo.-based environmental group Wilderness Workshop to persuade BLM to allow the leases to expire.

"Suspension might sound like a good thing, but it's not," the group said on its website. "It doesn't mean putting the threat of drilling on hold. Rather, it means stopping the clock so that the leases don't expire, which only gives the operator more time to drill and prolongs the problem."

Sen. Michael Bennet (D-Colo.) has taken a keen interest in the future of the Thompson Divide, introducing a bill in late March that would withdraw all unleased public land in the area from future development, while respecting the rights of valid industry leaseholders in the region (E&ENews PM, March 22).

Bennet said an overwhelming majority of the 700 comments he received in response to his proposal favored withdrawing land in the area from development.

The lease suspension follows industry's rejection late last year of an opening bid by the Thompson Divide Coalition to buy back the leases for $2 an acre, or $2.5 million for the lot, which is equal to the amount the companies paid for the leases nearly 10 years ago (Greenwire, Nov. 15, 2012). The group said its effort is backed by officials in Garfield, Pitkin and Gunnison counties.

Zane Kessler, the coalition's executive director, said he would review the BLM suspensions closely.

"We still need to review the details of the decision, but our coalition remains committed to finding a market-based solution that protects the Thompson Divide," he said. "We're hoping this decision helped to facilitate the ongoing conversation."

SG Interests has said the opening offer was too low.

"Once we acquire a lease like that, no matter what we paid at the auction, we look at it from a resource perspective," SG Interests Vice President Robbie Guinn told the Denver Post at the time. "This is worth a whole lot more than what they offered."

According to BLM, SG Interests holds 18 leases in the Thompson Divide area, and Ursa Resources Group holds seven. They underlie the White River National Forest.

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