Officials worry that halt to drilling will cost counties money
Talk of a settlement of the Roan Plateau lawsuit that’s halted drilling there has sparked worry among local government officials that the cost of any agreement could come out of their hides — and overpasses and other works.
“We adamantly say there shouldn’t be any clawbacks for us,” Garfield County Commissioner Mike Samson said.
The fear is that a settlement will result in the cancellation of oil and gas leases on 54,000 acres of the Roan Plateau, leases for which energy companies paid more than $114 million in 2008.
That money was split between the federal government and the state, and a portion of the state share — at least $11 million — was transferred into the state general fund.
Larger amounts, however, went to fund local projects such as the 29 Road overpass in Grand Junction, which provided a north-south corridor between Patterson Road and U.S. Highway 50 over the railroad yard, and the west Parachute overpass giving the town a second access off Interstate 70.
It’s those payments that local officials fear will be the subject of clawbacks from the Department of the Interior. which could be required to return the bonus payments for the Roan leases.
The bonus payments at the time represented the largest amount of money taken in by the Bureau of Land Management for any lease sale in the contiguous United States.
Local governments took the money and put it to uses that were appropriate for dealing with the effects of energy development, Mesa County Commissioner Steve Acquafresca said.
The Interior Department “should be held liable for the pay back,” state Sen. Steve King, R-Grand Junction, said in a conference organized by the Associated Governments of Northwest Colorado on Wednesday at the old Mesa County Courthouse.
Local governments should be held harmless because the Interior Department failed to construct a lease sale that could stand judicial scrutiny, Acquafresca said.
An environmental analysis being done to address a June 2012 Denver District Court ruling that the Bureau of Land Management failed to address three issues in its resource management plan “will help inform what, if any, changes regarding oil and gas leasing and development” will be required, BLM spokesman Steven Hall said.
Until the study is complete, it would be premature to speculate, Hall said.
Any settlement could reopen a battle between western Colorado governments and the Interior Department over federal mineral lease payments and another federal program, payment in lieu of taxes, the local officials said.
This year’s payment in lieu of taxes came in without being offset by the amount of federal mineral lease money, representing a win for local governments.
Now, the fear is that mineral lease revenues will be reduced to offset any money that Interior has to return to the high bidders because they’ve been prevented from drilling.
Such a reduction could hamper local governments’ ability to deal with drilling and energy production for years to come, state Rep. Ray Scott, R-Grand Junction, said.
“We’re in a very fragile economy as it is today,” and a reduction in mineral lease money could hamstring local government further, Scott said.
Such a reduction also would take away any incentive local governments might have to work with energy development in their jurisdictions, Routt County Commissioner Doug Monger, vice chairman of the organization, said.