Reported by Staff

Latest BLM State Lease Sale in the Books

DENVER - In a lease sale that generated the third smallest amount since 1970, the BLM’s Colorado State Office last week sold 11 parcels of 58 offered at its quarterly oil and gas lease sale, totaling 6,043 acres.

The highest per-acre price was for a 81-acre parcel in Rio Blanco County that sold to Exxon Mobil Corp. for $215 per acre, according to a statement from the BLM.

Yates Petroleum Corporation made the high bonus bid of $39,424, according to BLM officials, for a parcel of 2,464 acres in Garfield County. The New Mexico-based energy company has offices in Colorado and Wyoming.
 

The “bonus bid,” according to Jim Sample of the Colorado BLM office said the “bonus Bid” from Yates enables the company enables to go through the process of applying for drilling rights through the Colorado Oil and Gas Conservation Commission.

Overall, the lease sale earned $112,969 in total proceeds, with 49 percent to go to the State of Colorado.

The State of Colorado received $261.5 million in 2008 from royalties, rentals and bonus bid payments for all federal minerals (including coal), according to the BLM.

Battlement Mesa Residents Want Health Study
Prior to Drilling Agreement

A group of citizen activists in the Western Slope retirement community of Battlement Mesa is hoping a type of health-impact study used successfully in the oil fields of Alaska’s North Slope can help them curtail pollution, traffic and noise from a looming natural gas drilling plan in their Garfield County town of 5,000.

“We have a community of 5,000 people here, many of them retired and many of them with health issues, and the reason they come to western Colorado is for the clean air and the clean water and the healthier lifestyle, and we feel that we’re being attacked by the gas drilling industry here and our health and welfare is at risk,” said Dave Devanney of Battlement Concerned Citizens.

Although Denver-based Antero Resources has yet to submit its comprehensive drilling plan, or CDP, to the Colorado Oil and Gas Conservation Commission (COGCC) – the state agency with oversight of oil and gas production — the company has previously discussed plans to drill up to 200 wells from 10 well pads in the community.

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Sportsmen Praise BLM Decision to Defer Oil and Gas Lease

CRAIG - By deferring an oil and gas lease in northwest Colorado that could have jeopardized native trout, the Bureau of Land Management has signaled a new day for energy development in sensitive fish and wildlife habitats, a sportsmen’s coalition announced today.

Sportsmen for Responsible Energy Development was troubled by oil and gas development proposed for the 900-acre parcel due to its potential impacts on two populations of Colorado River cutthroat trout, a species of special concern in Colorado. The public land in the proposal, located 25 miles northeast of Craig, encompasses Cataract Creek and the Roaring Fork of Slater Creek. It was originally reviewed for leasing in 1991.

Sportsmen for Responsible Energy Development is a coalition of more than 500 businesses, organizations and individuals dedicated to conserving irreplaceable habitats so future generations can hunt and fish on public lands. The coalition is led by the National Wildlife Federation, the Theodore Roosevelt Conservation Partnership and Trout Unlimited.

In the 18 years since the lease was proposed, much has been learned about balancing fish and wildlife habitat with energy development, but the decision to lease this parcel has not been updated. However, the BLM is revising its resource management plan for the area, and the sportsmen’s coalition expects the agency to establish measures to protect the fish.

“Deferring this lease was the right decision,” said Steve Belinda, energy policy manager for the Theodore Roosevelt Conservation Partnership. “Considering that the BLM is revising its Little Snake Resource Management Plan, which governs administration of the area’s natural resources, waiting to proceed with leasing these lands makes a lot of sense.”

Use of “Disposal” Wells Likely to Increase

A state environmental engineer recently told Garfield County officials that they can expect an increase in the number of “injection wells” as the regional gas industry looks for ways to get rid of water left over from its drilling operations.

The official, Denise Onyskiw, of the Colorado Oil and Gas Conservation Commission, is in charge of the COGCC’s “Underground Injection Control” program.

The UIC program, as it is known, is part of COCCC’s overall regulatory framework for the oil and gas industries in Colorado, which was handed over to the state by the U.S. Environmental Protection Agency in 1984 and oversees “disposal” wells along with “enhanced recovery” wells.

“We’ve talked in the past about regulating oil and gas activity,” confirmed Garfield County Commissioner Trési Houpt told reporters, although the talk has focused on regulations for surface land-use considerations only.

“We haven’t talked about subsurface regulating,” Houpt said, adding that she is unsure if it is feasible, given overriding state and federal laws, or advisable.

Experts Highlight Third-Quarter Growth in Natural Gas Industry

Natural gas companies operating in Colorado and elsewhere performed well in the previous quarter, with nearly half of exploration-and-production businesses increasing their full-year outlooks for output, experts said. Cost-reduction measures and strong production from shale basins allowed the sector to grow during the period, even though spot gas averaged lower than $4 per million British thermal units, the analysts added. Given the current However, with producers still collectively pursuing growth, the chances of a rebound in gas prices next year looks more remote than ever.