Feds: Colorado can start getting gas royalties
August 9, 2008
DENVER ” One controversy over the Roan Plateau is resolved: Revenue from any new oil and gas leases on the western Colorado landmark will flow to the federal and state governments rather than a cleanup fund for a waste site.
The Interior Department and the U.S. Bureau of Land Management announced Friday that enough money has been collected to clean up waste from old oil shale research on the plateau. That means new revenue from mineral royalties and lease payments will now go to state and federal officials.
The certification of the cleanup fund was made less than a week before an Aug. 14 auction of oil and gas leases on 55,186 acres of public land on the Roan Plateau.
“Certification from BLM means that Colorado will now get our share of revenue from this development, and that is excellent news,” said Sen. Wayne Allard, R-Colo.
Federal officials said oil and gas production from leases on the Roan Plateau is generating about $2.7 million in royalties each month. The state will now get 49 percent of that revenue and the federal government will get the rest.
Still unresolved is what happens to millions of dollars left in the cleanup fund when the work is finished. And thousands of protests of the leases offered for sale have been filed with the BLM.
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Colorado Democrats Sen. Ken Salazar and Rep. Mark Udall said they’re disappointed that the BLM is moving ahead with next week’s auction of leases on the Roan Plateau despite opposition from Gov. Bill Ritter and communities in the area.
The plateau, about 180 miles west of Denver, is prized for its rich oil and natural gas deposits as well as its abundant wildlife and pristine backcountry.
Salazar and Udall said the federal government is also shortchanging Colorado by keeping leftover money in the cleanup fund.
BLM spokesman Steven Hall said the cleanup fund contains about $112 million. The Interior Department estimates the cleanup, monitoring and reimbursement of federal agencies will cost about $66 million.
Federal legislation created the cleanup fund in 1997. Another bill is needed to distribute any leftover money. Salazar and Allard introduced a bill in the spring to do that after settling disagreements on how the state’s share should be doled out.
Allard sponsored a bill 18 months ago that would have resolved the issue, but Salazar wouldn’t support it, said Steve Wymer, Allard’s spokesman. The likelihood is slim that Congress will pass a bill in the three months left before the session ends, he added.
“It’s so late in the game that now we’re buried under a long list of priorities,” Wymer said.
Salazar didn’t support Allard’s original bill because it was tied to development of oil shale and the Roan Plateau, said Matt Lee-Ashley, the senator’s spokesman.
Lee-Ashley said Salazar shares Allard’s fear that federal officials will try to keep money that should go to the state. In February, Interior Secretary Dirk Kempthorne said he was looking at funneling $24 million from the fund to his budget.
A compromise the Colorado senators reached would distribute the state’s 50 percent of the leftover money among four northwestern Colorado counties in the bulls-eye of energy development. Garfield and Rio Blanco counties each would get 40 percent of the funds, and Mesa and Moffat each would get 10 percent.
Ritter has said his administration’s proposal for the Roan Plateau would produce more revenue. His plan, rejected by the BLM, suggested leasing the public land in phases rather than all at once.
State officials have said leasing the land in phases would increase what companies would pay. The BLM plan calls for the development to occur in stages, and Ritter has said companies are unlikely to pay a lot of money for leases they can’t develop for a while.
BLM officials have said their plan, about seven years in the making, provides strong safeguards because it requires that one operator oversee the development of several companies’ leases in one group. The hope is that impacts will be reduced because fewer roads, pipelines and facilities will be required if only one company is taking care of on-the-ground operations.
The BLM’s plan projects 1,570 wells drilled from 193 sites, or well pads, on the public land on the plateau over 20 years. That includes 210 wells from 13 pads on top, where the BLM calls for oil and gas drilling to be done in stages and clusters to limit disturbance to 1 percent of the federal land at any time.