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May 9, 2013
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Coal Basin lease to expire May 31

A Texas-based oil-and-gas company in the thick of the fight over drilling in western Pitkin County announced a decision Wednesday that it says signifies its willingness to compromise.

SG Interests I Ltd. said it will allow a lease on 2,547 acres in Coal Basin, west of Redstone, to expire May 31.

A conservation group fighting the gas company’s efforts to drill in Thompson Divide dismissed Wednesday’s announcement as “a publicity stunt.”

SG Interests is one of the companies that hold several leases in the Thompson Divide area, southwest of Glenwood Springs and west of Carbondale. The lease that will expire later this month isn’t among the company’s 20,000-acre Lake Ridge Unit, which has been the focus of the battle over gas development.

Coal Basin is elsewhere in Thompson Divide. The basin is where Mid-Continent Resources once mined coal. The access to the Coal Basin lease likely would have been proposed on Forest Road 307, west of Redstone, according to a statement from SG Interests. That is different access from what will be proposed to develop gas wells in the Lake Ridge Unit, the company said. The drilling in the Lake Ridge Unit is wrapped in an administrative and legal dispute.

Though the decision not to pursue development in Coal Basin doesn’t directly affect the broader Thompson Divide debate, SG Interests said it signals cooperation.

“As part of our discussions and continuing negotiations with area groups, including the Thompson Divide Coalition and Trout Unlimited, SG has recognized that compromises must be made with the community in the proposed development of our natural-gas field in Pitkin and Garfield counties,” SG Interests’ statement said.

Wilderness Workshop, a conservation group battling the gas company over the Lake Ridge Unit in Thompson Divide, didn’t credit SG Interests for compromise or negotiations for its decision on the Coal Basin lease.

“SG made a decision not to develop this one lease in Coal Basin long ago,” Carbondale-based Wilderness Workshop said in a statement issued by its conservation analyst and staff attorney, Peter Hart. Hart said that it is expiring after the standard 10-year term of a lease because SG didn’t develop it diligently.

“By announcing this lease expiration publicly and labeling it as a compromise, the company is trying to curry favor with politicians and the public,” Wilderness Workshop’s statement said. “This is just a publicity stunt.”

The Thompson Divide Coalition, another conservation group fighting to prevent drilling in the Lake Ridge Unit, gave SG Interests slightly more credit for its decision to let the Coal Basin lease expire.

“This is an important step in the right direction, but it’s only one step,” said the statement from Thompson Divide Coalition Executive Director Zane Kessler. “There are still several SG leases in that area that, if developed, will devastate existing uses and countless livelihoods in the Crystal River Valley. Our hunters, ranchers and recreational users aren’t out of the woods yet.

“This is a business decision made in a Houston board room, not the result of ongoing negotiations with our coalition.”

The Thompson Divide Coalition is pursuing a buy-out of SG Interests’ leases in the Lake Ridge Unit. Kessler said the company hasn’t come to the table in a good-faith effort thus far.

Eric Sanford, operations and land manager for SG Interests I Ltd., said the lease that is expiring is the only one in the Coal Basin area that potentially would be accessed via Forest Road 307 west of Redstone. He said SG wouldn’t let any other leases in Thompson Divide expire this month.

scondon@aspentimes.com


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The Aspen Times Updated May 9, 2013 06:23AM Published May 9, 2013 02:35PM Copyright 2013 The Aspen Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.