Gas industry touts productivity of well near Thompson Divide
January 7, 2016
An oil and gas industry group on Tuesday said a well on private land less than a mile from the Thompson Divide boundary had shown "prolific initial natural gas production" that illustrates why federal agencies are wrong to restrict future drilling within the Divide.
"The Thompson Divide area well is another Mancos-shale mammoth," said David Ludlam, executive director of the West Slope Colorado Oil & Gas Association. "This Thompson Divide region well indicates the energy resources owned by the American public continue to be even more valuable and prolific than we ever imagined a decade ago."
Zane Kessler, executive director of the Thompson Divide Coalition, which seeks to bar drilling in the 220,000-acre area south and west of Glenwood Springs, countered that "WSCOGA is mixing apples with oranges in an attempt to mislead the BLM and the general public.
"This Mancos well is also in an area with existing roads and infrastructure, unlike the remote roadless areas of the Thompson Divide," Kessler said.
He said that analyses intended to be generous in their projections for natural gas potential in the Thompson Divide nonetheless reached the "overwhelming conclusion that it is not financially feasible to develop leases in the Thompson Divide."
"Those reports were predicated on $4 natural gas prices," Kessler said. "If the Thompson Divide leases weren't economical under those conditions, they sure as heck aren't economical today."
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The Denver Business Journal reported Tuesday that "2015 spot prices at the Henry Hub in Louisiana, a national benchmark, averaged $2.61 per million British thermal unit in 2015, down 41 percent from the previous year and the lowest full-year average since 1999."
The U.S. Forest Service, in its 20-year management plan for the White River National Forest, excluded the Thompson Divide from leasing during the term of the plan. It acknowledged strong potential for gas resources in the area, but cited strong public sentiment against development in reaching the decision.
The Bureau of Land Management, largely in line with the Forest Service decision, is wrapping up its comment period on a draft Environmental Impact Statement whose proposed action would cancel 18 leases in the Thompson Divide area altogether and partially cancel seven others.
It would also modify the remaining 40 leases stretching across a large swath of the White River National Forest, adding new lease stipulations contained in the updated oil and gas leasing plan put forth by Forest Supervisor Scott Fitzwilliams last year.
Among those stipulations is a provision for no surface occupancy and limits on new roads to access well sites.
Groups including the Thompson Divide Coalition contend the leases were issued illegally and should have been allowed to expire a few years ago.
WSCOGA, in its public comments on the BLM draft EIS, supported an alternative that allows all 65 White River Forest leases to be developed without any new stipulations. The industry group has hinted it may sue to fight Forest Service and BLM restrictions.
The association recently protested the White River National Forest Service's decision, claiming the agency largely ignored the Mancos potential.
"The new well further complicates the BLM's ongoing decision about whether to retroactively cancel or modify up to 65 leases in the same area," Ludlam said in a news release. "This tremendous Thompson Divide area natural gas well isn't just important for the company who drilled it — the discovery will also assist eight other companies potentially affected by retroactive harm if leases with the federal government are breached moving forward."
Ludlam added, "The hypothetical debate about the value of these leases is coming to a close as real-world natural gas wells are providing the agency and companies with real world information about the true underlying value this energy resource represents to the American public and to the companies who hold the lease rights."
But Will Roush, conservation director for the Carbondale-based Wilderness Workshop, said in a statement that Ludlam was missing the point.
"The overwhelming public support for protecting the Thompson Divide and roadless lands further west has nothing to do with whether or not there is or isn't gas underneath those areas," Roush said. "Local citizens want to see those areas protected to ensure clean air and water and to maintain the tourism, ranching and recreation-based economy of the region, which has no active oil and gas development currently."
Peter Hart, staff attorney for the Wilderness Workshop, joined Kessler in pointing out that the well in question, near the southern edge of the Thompson Divide, is in an area with numerous wells and existing infrastructure.
"There are many miles of pristine Colorado roadless areas between the well WSCOGA is pimping and the undeveloped leases on the White River National Forest," Hart said in a statement.