Pitkin County raises new objection to Thompson Divide leases

Janet Urquhart
The Aspen Times
Aspen, CO, Colorado

ASPEN – Allegations of bid-rigging are at the heart of Pitkin County’s latest objection to activity that would keep alive oil and gas leases in the Lake Ridge area of Thompson Divide, outside of Carbondale.

County commissioners last week OK’d a draft of a letter to two national forest supervisors and Jerry Strahan, fluid minerals branch chief for the Bureau of Land Management. Local congressional representatives and others are to receive copies of the letter.

The BLM is considering a proposal to “unitize” 16 leases held by Houston-based SG Interests in the Thompson Divide area, plus two others – a move opponents believe would allow the company to drill one test well and hold on to all of the leases for the foreseeable future.

The county already has gone on record twice opposing the extension of what it termed “old, inactive and soon-to-sunset” leases held by SG Interests. This spring, the Thompson Divide Coalition offered to pay more than $2.5 million for leases to six different oil and gas companies, including SG, in order to prevent drilling in the region.

In their latest letter, commissioners say a civil action brought against SG Interests by the federal government in February is yet another reason to deny the unitization request. The civil suit alleges SG participated in a bid-rigging scheme with another energy company when bidding on federal leases in the nearby Ragged Mountain area. It is one of three lawsuits naming SG as a defendant in connection with its procurement of federal leases in the area, according to the county’s letter.

The BLM should consider the allegations, as “there is evidence that SG was willing to undermine BLM’s leasing process for federal lands in this same area,” the letter says.

The county also questions the price SG paid for the Lake Ridge units, which the letter says are the same as those paid in the allegedly collusive bidding in the Ragged Mountain area.

“Companies involved in oil and gas exploration in areas such as Lake Ridge have a responsibility to play by the rules in order to preserve the integrity of both the leasing process and the environment,” the county’s letter states. The complaints filed against the company suggest it is not fulfilling that obligation, according to the letter.

The county is urging the BLM to investigate whether illegal conduct occurred when SG acquired the Lake Ridge unit leases and to make no decision on the unitization proposal until after an investigation is conducted.