Conservation groups say drilling threat in Thompson Divide gets real
June 9, 2011
CARBONDALE – A natural-gas production company has filed an application that conservation groups interpret as a “major threat” of drilling activity in the heart of the Thompson Divide area west and southwest of Carbondale.
SG Interests filed an application with the Bureau of Land Management to group together federal lands that it already leases into a specially designated unit, according to Wilderness Workshop and two other conservation groups monitoring activity in that area.
Establishing a unit and drilling a test well would likely allow SG Interests to hold onto the leases “for the foreseeable future” and develop a long-range development plan, said Peter Hart, an attorney with Wilderness Workshop. The group fears it will eventually lead to extensive gas-well drilling.
“This is the threat we were concerned about for some time,” Hart said.
Officials from Houston-based SG Interests couldn’t be reached for comment late Wednesday afternoon.
BLM spokesman David Boyd confirmed that SG Interests submitted an application, but he said much of the material was proprietary and couldn’t be discussed. “We’re evaluating it,” Boyd said, noting that a decision isn’t imminent.
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Units are created for a number of reasons, and sometimes are required by the BLM to coordinate drilling and production efforts by one or more companies. “It makes development orderly,” Boyd said. Lease holders also use a unit to pool resources and expenditures.
Hart said he learned of the application last week. The “unitize” process isn’t very transparent, and he learned of it almost by chance on a monthly telephone call he makes to the BLM’s Lakewood office.
His research shows SG Interests holds about 32,000 acres in 16 leases in an area that stretches from Sunlight Peak southward to the edge of Coal Basin, west of Redstone. The leased land is in the high country west of Spring Gulch cross-
country ski area. A large chunk of that land is in extreme western Pitkin County. It is roughly 4 to 6 miles west of Highway 133.
Wilderness Workshop has teamed with Western Resources Advocates and High Country Citizens’ Alliance to oppose gas-well drilling in the rugged lands. They contend the area isn’t conducive to drilling because establishing pads and roads will ruin its natural characteristics. A portion of the lands that SG Interests leases is in the Thompson Creek Roadless Area.
The Carbondale-based Thompson Divide Coalition, a diverse group representing cowboys to hippies, is also battling to keep the broader area free of development. If SG Interest’s application is granted, it would divide the lands the coalition wants to protect.
SG Interests’ intentions seemed apparent. In addition to leasing the lands, the company successfully battled environmentalists to build a pipeline paralleling the lease in 2008.
Most of the 16 leases that Wilderness Workshop is concerned about are scheduled to expire in 2013. Foes of development in that area hoped to see the leases expire without activity. Thompson Divide Coalition is pressing to extinguish the leases through federal legislation, but it’s a slow process.
By establishing what’s called the Lake Ridge Unit, SG Interests could dash the hopes of the drilling foes. If the BLM approves the application, it will essentially extend the life of those leases, Hart said. The company will get a longer period to develop wells or sell the leases to another producer.
Hart said SG Interests’ actions are somewhat puzzling because Thompson Divide is on the edge of the gas-rich Piceance Basin. There are more lucrative areas in the basin, which covers much of western Colorado and part of eastern Utah. Also, natural-gas prices are extremely low right now, so producers have little incentive to explore new, potentially marginal areas.
Hart suspects that SG Interests wants to extend the life of the leases rather than drill any time soon.
“They want to keep them on the books and prolong the problem,” he said.
He said the conservation groups are scrambling to oppose creation of the unit with a letter to the BLM, which will be sent to Colorado’s Congressional delegation as well. If the application is approved, Wilderness Workshop would consider an administrative appeal, Hart said. Other possible steps include litigation.