‘Historic day’ as Thompson Divide leases canceled

Thursday was a day that Jason Sewell likely will always remember.

It’s one that Robbie Guinn probably would just as soon forget.

The Interior Department and Bureau of Land Management on Thursday announced the cancellation of 25 undeveloped oil and gas leases covering 33,000 acres in the Thompson Divide area southwest of Glenwood Springs. Sewell, a Carbondale rancher and the great-great-grandson of local settler Myron Thompson, after whom Thompson Creek in the Thompson Divide was named, traveled to Denver to hear Interior Secretary Sally Jewell, national BLM director Neil Kornze and Colorado Gov. John Hickenlooper announce the decision.

“This really solidifies what the community wants. It’s a historic day for us,” said Sewell, who has dedicated more than a decade trying to protect Thompson Divide from oil and gas development and is board chair of the Thompson Divide Coalition.

Guinn, on the other hand, is vice president of SG Interests, which owns 18 of the leases that were immediately canceled with Thursday’s action.

“We just lost a good bit of money,” said Guinn.

The BLM will pay SG and Ursa Resources, which held the seven other leases, about $1 million in total for them, primarily for the amount paid for acquiring the leases at auction. But Guinn said SG has invested much more money working toward eventual development of the leases. And the company believes the area where the leases were canceled holds tremendous resource development potential, especially given the positive results of its drilling into the Mancos shale seven miles away and a recent U.S. Geological Survey estimate that the Mancos in the Piceance Basin holds 66 trillion cubic feet of recoverable natural gas.

SG considers the cancellation of the leases a breach of contract and/or a private property takings, and plans to take the issue to court.

“In our minds our constitutional rights were violated today and it appears to me there was a celebration in Denver over that,” he said.

The BLM canceled the leases following a retroactive environmental review of 65 White River National Forest leases stretching from roughly Carbondale to De Beque. It undertook the review due to a failure to do such a review before issuing the leases, or to adopt an environmental review the Forest Service had done.

“This is a very Colorado-based solution, (in) a state that appreciates the value of your beautiful, pristine natural areas,” Jewell said in Denver.

The BLM also added new lease stipulations in the case of 12 undeveloped leases, and provisionally did the same in the case of a 13th undeveloped lease, pending the outcome of an appeal by the leaseholder over whether the lease has expired. But it didn’t add new stipulations in the case of 20 leases considered to be producing, and provisionally left four more unchanged if appeals over their expirations are successful. It made no decisions in the case of three leases that have expired.

Some conservation groups, such as Wilderness Workshop and Earthjustice, had called for the BLM to include the new resource-protective stipulations on all the leases, including producing ones, but the BLM has said that would be technically and legally unfeasible. Encana, which holds 11 producing leases, has said it opposes adding new stipulations to them. Mike Freeman, an attorney with Earthjustice, said earlier this week that conservationists would be looking at all its options if the BLM decision wasn’t satisfactory.

Zane Kessler, executive director of the Thompson Divide Coalition, has called canceling the Thompson Divide leases while leaving in place other leases closer to existing oil and gas development a balanced resolution.

Don Simpson, a vice president with Ursa, said his company plans to review the BLM’s decision “and then make a decision whether or not to accept it.

“We do believe that an additional reimbursement for environmental surveys, etc. is warranted and do not believe that the proposed reimbursement is indicative of the value of the leases,” he said.

The BLM says its cancellation of the leases is consistent with the White River National Forest’s new oil and gas plan, which generally bars future leasing in the WRNF portion of Thompson Divide.

However, that prohibition will only last for the life of that plan — typically a few decades.

U.S. Sen. Michael Bennet, D-Colo., introduced legislation in 2013 seeking permanent withdrawal federal lands in the more than 200,000 acres of the Thompson Divide from future oil and gas leasing.

Bennet said in a news release Thursday, “The ranchers, sportsmen, outdoor enthusiasts, and elected officials who live in those communities feel that speculative leases in the Divide jeopardize their local economies. Today’s announcement is a significant step towards addressing those concerns.

“In the upcoming weeks and months, we will continue to work with community members and industry to determine whether a legislative compromise can permanently protect the Thompson Divide and provide market-based compensation for those who have just had their leases canceled.”

But U.S. Rep. Scott Tipton, R-Cortez, said in a release, “I firmly believe that we can harness our land’s energy potential without compromising Colorado’s natural beauty. The cancellation of leases in the White River National Forest is a continuation of this (Obama) Administration’s false assertions that energy development has to come at the expense of preservation, and it is another action in a pattern that we have seen to permanently withdraw federal land from future natural resource development.”

The lease cancellations came as a disappointment to Mesa County commissioners, the county said in a news release. Commissioner Rose Pugliese attended Thursday’s press conference and said in an interview that she found it insulting to have officials celebrating the taking of private property rights.

She said the lease cancellations will affect Mesa County and its job base because of its role as a regional energy hub. The county was a stakeholder in the lease review process but wasn’t advised of the BLM’s final decision, and no one told the county of the press conference, which she attended because she happened to be in Denver, she said. She questioned holding the event there.

“The leases aren’t in Denver. The constituents who are being impacted aren’t in Denver.”

“None of this is acceptable,” said Pugliese, who said she’s looking forward to more transparency from the Trump administration.

The energy industry is hoping that the election of Donald Trump, who has called for reducing obstacles to fossil fuel development, could broaden its options for challenging the BLM decision. An administrative appeal is one option.

Hickenlooper said Thursday of the lease decision, “I think this is exactly what the president-elect has championed as he’s gone through his campaign, is letting local communities try to hear all sides and have a balanced decision.”

Sewell said the possibility of the decision being challenged is an issue for another day, and for now, the Thompson Divide Coalition is celebrating its victory. He praised the BLM’s handling of the matter.
“I think they’ve done a good job of listening to the constituents … and listening to what the local community wants as far as how the public land is utilized,” he said.

He ranches and recreates in Thompson Divide, and said it’s just not suited for oil and gas development.

“I’m not against oil and gas development. I don’t think it should happen everywhere. There’s special places in the world and Thompson Divide is one of those places,” he said.


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