Second energy company seeks ‘suspension’ of Thompson Divide leases
February 21, 2013
ASPEN – A second energy company whose oil and gas leases in Thompson Divide are set to expire this year has asked the Bureau of Land Management to “suspend” the leases in order to keep them valid.
Ursa Piceance LLC filed the request Tuesday with the BLM field office in Silt. Ursa acquired the seven leases, including five that involve land in Pitkin County, from Antero Resources Piceance Corp. last year, but reassignment of them hasn’t been formally approved by the BLM. Both entities jointly requested the suspension, though it came to the BLM on an Ursa letterhead.
The move follows a similar request last week by SG Interests to suspend 16 leases it holds in the Thompson Divide area, west of Carbondale, that also are poised to expire.
The Ursa/Antero leases, covering nearly 12,000 acres, are primarily in Pitkin and Mesa counties but include a small portion of Garfield County, according to the BLM. The Ursa leases are west of SG’s leases. Both companies are based in Houston.
The suspension requests by SG Interests and Ursa are but one facet in an increasingly complex battle over Thompson Divide, where ranchers, conservationists and local governments are fighting to prevent drilling and trying to keep abreast of the multi-layered oil and gas regulatory process that governs oil and gas development.
“There are many different balls in play right now that will affect the fate of Thompson Divide,” said Chris Seldin, assistant Pitkin County attorney.
Pitkin County is now putting the final touches on its comments to the Colorado Oil and Gas Conservation Commission regarding what is expected to be the first of several new drilling applications within its borders from SG Interests. Meanwhile, county commissioners have scheduled a road trip to Carbondale next week to discuss activities in Thompson Divide.
The meeting is intended both to let the public know what’s going on and seek citizen input, Seldin said. It’s scheduled for 6 p.m. Wednesday at Carbondale Town Hall. Scott Fitzwilliams, supervisor of the White River National Forest, and Steve Bennett, BLM field manager, have been invited.
The BLM and Forest Service also are involved in the review of drilling proposals in Thompson Divide. SG Interests has submitted six permit applications to the BLM – one for a well in Garfield County and five in Pitkin County. The BLM reviews subsurface activities, while the U.S. Forest Service will assess surface impacts, but none of the applications has been deemed complete yet – a necessary step to launch the federal reviews.
In the meantime, local governments have asked the BLM to take the unusual step of allowing a 30-day public comment period on all requests for suspension in Thompson Divide. Normally, there is no such comment period. The BLM has yet to respond to the request, according to spokesman David Boyd.
“There’s so much public concern about this, it would be ludicrous if the (BLM) doesn’t take public comment,” said Peter Hart, staff attorney for Carbondale-based Wilderness Workshop, which, along with the Thompson Divide Coalition, has led a heated battle to prevent drilling in the area.
The suspension requests from SG and Ursa come after previous “unitization” requests by both companies to combine their leases into the Lake Ridge and Wolf Spring units, respectively. That step that also would prevent the expiration of leases under certain circumstances, but the BLM has not acted on the unitization requests.
If granted by the BLM, suspension essentially would put a hold on pending expiration dates for the SG and Ursa leases, originally acquired in 2003 with a 10-year term. Both companies, in their suspension requests, expressed a willingness to engage in settlement discussions with the Thompson Divide Coalition, a group that has expressed an interest in acquiring the leases. Seldin and Hart both criticized the strategy.
“Looks to me like an oil company asking the federal government for a leg up in negotiations with a community group,” Seldin wrote in an email. “Leases that are about to expire don’t have much value, but if Ursa talks BLM into extending them, it can demand a higher price from the Thompson Divide Coalition.”
“If BLM allows these companies to hold leases that are set to expire in a matter of months and are undevelopable without extensions, the companies can name their price,” Hart said in an email. “The companies can extort value from valueless leases with the threat of development and time on their side.”
The coalition a year ago proposed a $2.5 million settlement to various companies that hold leases in Thompson Divide, should federal legislation be enacted to protect the area and the leases be retired.
“It seems odd that the industry is asking for more time to negotiate with us. Our offer has been on the table for a year now, and we’ve not yet seen a single counter-offer from lessees in the area. Now they want a free extension,” Zane Kessler, executive director of the Thompson Divide Coalition, said in an email Wednesday. “To be clear, our doors are still open, but we’re not going to sit alone at the table and bid against ourselves. Time is running out.
“All things considered, we have no choice but to oppose suspensions in the Thompson Divide,” he said.
An attempt to seek comment from Ursa was unsuccessful.
The Thompson Divide area covers 221,500 acres of federal land in Pitkin, Garfield, Gunnison, Mesa and Delta counties. There are 61 current leases in the area covering approximately 105,000 acres.