BLM review could sink 65 oil, gas leases

The Bureau of Land Management expects early next year to kick off a new environmental review that could lead to potential modifications or cancellations of up to 65 existing oil and gas leases covering 80,772 acres in the White River National Forest.

The review, to rectify an oversight dating back decades, could even affect 10 leases with producing wells, and some in the oil and gas industry are questioning the BLM’s ability to take such an action.

“I think that is precedent-setting. They can’t cancel a lease if it’s being produced,” said Wayne Bankert, senior regulatory and environmental coordinator for Piceance Energy, which holds at least two leases under review.

BLM spokesman David Boyd said he’s not aware of other cases of producing leases being canceled. But precedence does exist for withdrawing existing leases right within the White River National Forest. In 2009 the BLM withdrew three Encana USA leases west of Redstone and refunded the company for lease bid and rental costs. That was after the Interior Board of Land Appeals ruled, in a case brought by Pitkin County and the Wilderness Workshop conservation group, that the BLM improperly failed to adopt a Forest Service pre-leasing environmental analysis or do its own before issuing the leases.

That Forest Service analysis occurred during preparation of the White River National Forest’s 1993 oil and gas plan.

Since then, oil and gas development proposals in the Thompson Divide area, which stretches roughly from Glenwood Springs to McClure Pass and some entities are trying to protect from drilling, brought to the forefront the BLM’s failure to adopt the Forest Service analysis.

In considering development proposals, the BLM determined the deficiency applies to 25 Thompson Divide leases owned by SG Interests and Ursa Resources and covering a total of more than 33,000 acres.

Eventually, the BLM determined the defect applies to a total of 65 leases that cover forest land mostly between De Beque and Redstone, with a small amount northeast of Meeker.

Boyd said adopting the environmental review in the 1993 plan isn’t an option at this point because the BLM is required to consider new information under the National Environmental Policy Act. One possible outcome of its review is that there would be no resulting changes to some or all of the leases.

Boyd said both environmental and economic impacts of its action alternatives will be considered.  The bureau isn’t expected to make a decision on the matter until late 2015.

Boyd said that for the most part, the BLM wouldn’t be looking at new drilling proposals on the leases until the review is complete.

Bankert questioned the need for the review, noting that site-specific environmental review occurs before drilling on any lease. “It’s not like they don’t have any … environmental analysis done on them,” he said.


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