Coalition challenges EnCana leases | AspenTimes.com

Coalition challenges EnCana leases

Conservationists claim the battle to preserve or drill gas wells on about 2,000 acres of public lands southwest of Carbondale has swung in their favor.A coalition of environmental groups claims it found new information that could nullify a gas company’s acquisition of the three parcels in the White River National Forest.The battle is significant because it’s being waged on lands on the western edge of Pitkin County. Two of the three parcels are located in the Thompson Creek area, close to the Spring Gulch cross-country ski area. The area is popular with hunters and various backcountry explorers.If the environmental groups are successful, it could prevent the gas boom that has swept through Garfield County from spilling into Pitkin County, at least temporarily. A different company could acquire the leases.The coalition alleges that the 2,000 acres were acquired unlawfully by EnCana Oil and Gas USA in a federal land auction last May. In documents filed with the U.S. Department of the Interior Board of Land Appeals, the coalition alleges that EnCana already held more than the 246,000 acres allowed by the federal Mineral Leasing Act. Therefore, its acquisition of additional lands in May 2004 should have been prohibited by the U.S. Bureau of Land Management, the group claimed.The coalition is led by Wilderness Workshop, the oldest environmental advocacy group in the Roaring Fork Valley.”This could be the wooden stake through the heart of these leases,” said Wilderness Workshop Executive Director Sloan Shoemaker.But an EnCana spokeswoman said the coalition’s assertions are inaccurate.”At all relevant times we’ve been in compliance” with the acreage limits, said Florence Murphy.The acre limit is in place to prevent a few companies from dominating too much of the market.First disclosure of ownershipThe disputed leases were acquired in the May auction by a Denver company called Contex Energy Corp., a brokerage firm that acquires leases on behalf of gas development companies. The identity of actual buyers in auctions is often kept secret for competitive reasons.Pitkin County and the environmental coalition tried to prevent the BLM from offering those lands for lease because they claimed their wilderness qualities should be preserved.Once the lands were included and sold in the auction, the county and coalition filed an administrative appeal with the BLM, which handles the sale of gas leases for the Forest Service. The appeal was denied by the BLM’s Colorado director.The coalition objected again to the Interior Department’s Board of Land Appeals, which serves as a quasi-judicial body. During the exchange of legal briefs, Contex disclosed that the leases were acquired for EnCana, one of the biggest gas development companies in Garfield County and one that has expressed interest in exploring in western Pitkin County.Murphy said she could not immediately research how many acres of leases EnCana holds in Pitkin County. The company is acknowledging for the first time that it acquired leases in Pitkin County last year.Over the limit?The environmental coalition alleged that EnCana exceeded the 246,000-acre limit in Colorado due to its acquisition and merger with an oil and gas company called Tom Brown Corp.By the coalition’s estimate, through research of BLM records and other reports, the company held 285,841 acres after the merger.The effective date of the merger was May 2004, according to the environmental coalition. The disputed leases were issued on Sept. 1, 2004, so the acreage limit applied, according to the green groups.Murphy countered that the merger didn’t take effect until Jan. 1, 2005. Federal law gives gas companies 180 days to address excess acreage, she said. EnCana is doing that through development and divestiture, according to Murphy.”We do work to comply with all regulations,” Murphy said.Coalition attorney Mike Chiropolos wrote that the BLM should demand documentation that EnCana’s acreage has been reduced and not simply take the company’s word for it.Chiropolos also wrote that the dispute over validity of the leases was more than bickering over a technicality and that it has “real-world impacts.””EnCana’s violation of the acreage limitation requirement must be immediately remedied, because EnCana has compiled the worst compliance record of all federal lessees operating in Colorado,” he wrote.Failure of the land board to nullify EnCana’s acquisition of the disputed leases creates the risk that those lands could suffer environmental damage, the coalition alleged.There is no timetable for a decision by the lands board.Scott Condon’s e-mail address is scondon@aspentimes.com


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