Roan Plateau leases may go up for sale
June 1, 2008
RIFLE, Colo. ” In about two weeks, Clare Bastable will learn whether the Bureau of Land Management will put up for sale natural gas leases on the Roan Plateau.
That is something the conservation director for the Colorado Mountain Club has been fighting against for so long and will continue to try to stop even as full-scale leasing for the Western Colorado landmark appears to be on the horizon in little less than three months.
“Every time the public or Congress or the governor has intervened on this and asked for protection, the Bush administration has plowed forward,” Bastable said of actions to open the area up to natural gas drilling. “So the fact that the (BLM is) pursuing leases of the Roan is not a surprise. It is certainly disappointing, but again, I don’t believe that this battle is over.”
Steven Hall, a spokesman for the BLM, said the agency is expected to announce in about another two weeks all the leases that will be up for sale in its quarterly lease sale, which is scheduled for Aug. 14. Hall could not definitively say whether Roan leases will be included in that sale.
However, Bastable and industry groups believe they will be. When the BLM issued its second record of decision for the controversial area in March, most people expected the August lease sale to include Roan Plateau parcels.
It is the intention of the BLM to lease all of the federal mineral rights on the Roan Plateau at one time.
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About 52,000 acres are expected to be available for leasing in all of the Roan Plateau Planning area. About 34,750 of those acres are on top of the plateau.
A large percentage of Roan acreage carries a no-surface-occupancy stipulation, which means gas companies would have to directionally drill from other areas to extract the natural gas to minimize surface disturbances. However, the BLM can make an exception to the that stipulation.
The prospect of all the leases on the Roan Plateau going up for sale has Bastable and several other environmental groups saying that they are pursuing “every tool” in their “toolbox” to prevent that leasing of acreage in the area in the August lease sale, she said.
“I think we have a lot of activities right now, and there is significant potential to avert leasing of the Roan Plateau,” Bastable said.
Those tools, said Bastable, include working with Colorado’s congressional delegation to craft legislation to protect the Roan Plateau, and the possibility of litigation.
Bastable said her group and other environmental organizations also plan to protest the lease sale if it includes federal mineral rights for the Roan Plateau.
“What this lease sale represents is the BLM completely turning its back on what our congressional representatives, what our governor and what our local communities and citizens have been asking for the last seven years on the Roan Plateau,” Bastable said. “I believe there is going to be a strong response to the announcement of the lease sale for the Roan.”
Marc Smith, executive director of Independent Petroleum Association of Mountain States (IPAMS), said that after a 10-year planning process in which many groups, including industry and environmental organizations, he was “pleased” that the BLM will “begin to allow limited energy development on a tiny portion of the Roan Plateau, known as the Naval Oil Shale Reserves.”
“Congress gave clear instructions to the BLM in 1997 when it passed bipartisan legislation to transfer management responsibility of the lands for the purpose of developing natural gas resources,” Smith said.
He said the BLM’s plan for the Roan Plateau carefully balances energy development with conservation and allows for only 350 acres of land disturbance at any given time.
“The plan also permanently protects 38,427 acres from development, including nearly 23,000 acres of wildlife security areas identified by the Colorado Division of Wildlife,” Smith said. “In addition, drilling and related activities are limited from December through April in nearly 35,000 acres of critical big game winter range below the rim.”
The future of the Roan Plateau has set off a wave of criticism between energy and environmental groups over how much money Colorado can receive from gas leases and royalties there, and how much natural gas is actually beneath the area.
In November of last year, a 200-acre parcel about 6.5 miles west of federal mineral rights in the BLM’s Roan Plateau Planning Area went for $26,000 per acre ” which was a state record ” in a BLM lease sale. Colorado received half of the sale, which totaled $5.2 million.
The sale was about three times more than the previous record of $8,400, for a parcel in the same general area on the west side of Parachute Creek north of Parachute.
Some industry groups have been using the figure of $46,000 per acre to say that Colorado could reap $1 billion from lease sales on the Roan Plateau. Critics have scoffed at that figure, pointing to figures from the Minerals Management Service, which is part of the U.S. Department of Interior, that showed the amount the service collected for all onshore and offshore leasing in the United States in 2007 was $893 million.
According to the BLM, there is an estimated 9 trillion cubic feet of recoverable natural gas under federal lands in the Roan area, and it is estimated that federal revenue from oil and gas royalties and lease sales could generate $857 million to $1.13 billion over the next 20 years. Colorado would receive an estimated $428 million to $565 million in money generated from oil and gas extraction on the Roan.
“Part of what gets a little lost in this discussion is that the question of what do the leases garner is only the beginning of the federal revenue picture,” Hall said. “Because we also have the federal royalty, which applies to all the gas that is produced. So that can outweigh what the lease purchases could be.”
About a month after the BLM issued its second record of decision for drilling on the Roan Plateau, U.S. Sen. Ken Salazar, D-Colo., Rep. Mark Udall, D-Eldorado Springs, and Rep. John Salazar, D-Manassa, introduced a bill to Congress that called for “phased leasing” of federal mineral leases in the area. The bill also sought to increase the acreage of areas of critical environmental concern (ACECs), which are special areas given a higher level of protection.
Phased leasing means auctioning a set of leases one after another over time. State officials have said that approach would increase what companies are willing to pay because the BLM plan calls for the development to occur in stages, and companies are unlikely to pay money for leases they can’t develop for a while.
The BLM did not include that request in its second record of decision for the area. The agency’s plan for the area calls for “phased development,” where all the parcels would be leased at once, and then the development would be phased over time with one operator working on the ground.
Stephanie Valencia, a spokeswoman for Salazar, said the legislative schedule for the Senate in the next few months is not exactly set, so his staff is “not exactly” sure of all the bills to which he could attach the Roan legislation.
“But we are looking for every opportunity that this bill could potentially be attached to,” Valencia said. “We want to get this done as quickly as we can.”
” A series of executive orders sets aside government-owned petroleum and oil shale reserves, including Naval Oil Shale Reserves (NOSR) No. 1 and 3 on and below the Roan Plateau.
” Naval Oil Shale Reserves are transferred to the Department of Energy (DOE). In the following years the DOE develops 24 natural gas wells below the Roan Plateau in NOSR 3. All proceeds go to the national treasury.
” The Bureau of Land Management Glenwood Springs Field Office completes its Resource Management Plan. Under this plan, 17,364 acres of Bureau of Land Management (BLM) lands that will later be included in the Roan Plateau Planning Area are available for oil and gas leasing.
” The 56,238 acres of NOSRs 1 and 3 are transferred to the U.S. Department of the Interior through the National Defense Authorization Act. The “transfer act” states that the Secretary of the Interior shall enter into leases with one or more private entities for the purpose of petroleum exploration, development and production as soon as “practicable.” It also requires that the 12,029-acre area primarily below the rim already containing wells be leased within one year.
March 1999 ” The BLM signs a Record of Decision making the 12,029-acre production area available for oil and gas leasing.
” The BLM begins public scoping on the Roan Plateau Resource Management Plan Amendment. The planning area covered in the amendment includes the 56,238 acres of NOSRs 1 and 3 transferred in 1997, as well as 17,364 acres of lands previously managed by BLM. A public scoping meeting is held in Rifle.
” A 30-day public comment period on six “preliminary alternatives” is held to fully address public issues and concerns through the range of alternatives. Public meetings are held in Rifle, Parachute and Glenwood Springs. This was an additional public comment period exceeding the minimum required under the National Environmental Policy Act and BLM planning regulations.
” The BLM releases the Draft Roan Plateau RMP/EIS for a 90-day public comment period. The draft outlines five alternatives.
” BLM extends the public comment period an additional 30 days to ensure the public has ample opportunity to comment on the plan.
” The BLM issues a record of decision for the Roan Plateau, giving the green light for drilling on about 70 percent of the 73,602-acre planning area that is rich in natural gas and prized for its scenery and wildlife.
” Colorado Gov. Bill Ritter responds to the BLM’s record of decision, which allowed for drilling on top of the plateau.
He sought increased protection of sensitive areas, more use of technology to minimize environmental disturbances, and incremental leasing of federal lands ” a policy he said would better protect the environment, increase state revenues and pace future development.
The current federal plan for the Roan calls for all leasing to come all at once.
March 13 ” Natural gas lease sales for federal minerals underneath the Roan Plateau could come as soon as late this summer following a second BLM Record of Decision for the Roan Plateau. Colorado Gov. Bill Ritter, Democrats from Colorado’s Congressional delegation and area environmentalists were disappointed in the decision, with some saying the agency flatly rejected the governor’s proposals for drilling in the area.
” U.S. Sen. Ken Salazar, D-Colo., Rep. Mark Udall, D-Eldorado Springs and Rep. John Salazar, D-Manassa, introduce federal legislation that called for “phased leasing” of federal mineral leases on the Roan Plateau and increasing the acreage for areas of critical environmental concern (ACEC), a special area given a higher level of protection, to 39,338 acres. Currently there are 21,034 acres designated as ACECs.
The legislation largely follows what the governor proposed for the Roan Plateau.
” Local environmentalists and natural gas companies will find out in an expected BLM announcement whether leases for the Roan Plateau will be up for sale in an Aug. 14 lease sale.
” A quarterly BLM lease will occur. Natural gas leases on the Roan Plateau could be up for sale.