OIL AND GAS:

'Win-win' deal reportedly struck on leases in hotly contested Colo. plateau

A decadelong battle over whether to drill for gas atop a wildlife-rich plateau in western Colorado could be nearing a resolution, with environmentalists, industry, Colorado's governor and the congressional delegation reportedly backing a proposed settlement.

While far from final, the proposal is aimed at resolving one of the longest-running public-lands feuds in the Centennial State. At issue is the Roan Plateau, an area blessed by an abundance of natural gas as well as major herds of mule deer and elk and genetically pure Colorado River cutthroat trout.

Controversy over the Roan has simmered since 2007, when the Bureau of Land Management opened most of the lands to drilling and a year later sold roughly 55,000 acres of leases, netting a record $114 million in bonus bids. Denver-based Bill Barrett Corp., a major leaseholder, has proposed drilling as many as 3,200 natural gas wells atop the plateau.

That project was placed in doubt, however, in June 2012 when a federal district court in Denver found flaws in the BLM resource management plan (RMP) that had authorized the leases (EnergyWire, June 25, 2012).

Judge Marcia Krieger ruled BLM failed to consider a more protective land-use plan endorsed by communities in Garfield County, Colo., that would have left most of the surface of the plateau undisturbed by using "multi-lateral directional drilling" from wells around the perimeter of the plateau. She said BLM had also failed to address how drilling would cumulatively impact air quality and took a flawed look at ozone impacts.

Now, attorneys representing environmental groups and industry have reportedly reached a proposed settlement that would have the Interior Department buy back some of the Roan leases and alter its preparation of a revised RMP.

It would also accelerate the production of gas elsewhere, create jobs, maintain most of the "best leases" and provide regulatory certainty for all involved.

That's all according to an April 1 letter from Rep. Scott Tipton (R-Colo.) obtained by Greenwire through a Freedom of Information Act request.

Tipton said he strongly supports the proposal along with the rest of the Colorado delegation, Gov. John Hickenlooper (D), environmental groups, industry and Western Slope stakeholders.

"Every party has made a good faith effort to find reasonable solutions to every concern, and all that remains is for the DOI to address and finalize the process," Tipton wrote in the letter to Interior Secretary Sally Jewell's then-Chief of Staff Laura Daniel Davis.

While Tipton said he believes the estimated 9 trillion cubic feet of natural gas in the Roan planning area can be developed responsibly, he said the proposed settlement would strike a fair balance between development of the most prospective leases and protection of the most valued habitat.

"Royalty, severance and tax revenue associated with production from the remaining leasehold would more than offset the refunded bonus payments," Tipton wrote. "This proposed agreement is truly a 'win-win' for industry stakeholders, the conservation community, Colorado and the Department of Interior."

A Tipton spokesman did not reply to emails for comment, and attorneys representing Bill Barrett and environmental groups declined to discuss details of the talks, citing their sensitive nature.

"We are of course trying to find a way forward," said Mike Freeman, an attorney for Earthjustice in Denver, who represented a coalition of 10 environmental groups challenging the federal leasing plan, including Trout Unlimited, the Colorado Environmental Coalition, the Wilderness Society and the National Wildlife Federation. "This is one of the longest-running disputes on public lands in Colorado, and we think there must be a better way to get this resolved."

BLM declined to comment, and the Department of Justice did not respond by press time.

BLM is currently working to remedy the flaws Krieger found in its RMP, though it hasn't indicated whether it plans any changes that would require modification or cancellation of any of the leases. A draft supplemental environmental impact statement is due for release this December.

Past settlement bids

The Roan Plateau planning area, located just west of Rifle and north of the Colorado River, consists of about 39,000 acres of semi-desert lowlands and a 35,000-acre elevated plateau with a moister montane and subalpine habitat.

Conservation and sportsmen's groups have long argued the gas underlying the top of the plateau should be accessed using horizontal drilling from its sides in order to protect its biological diversity, scenic vistas, and premier hunting and fishing opportunities.

"If Colorado hunters, fishermen and outdoor enthusiasts should somehow prevail, the Roan could remain an untrammeled mountain wilderness of pure waters, great alpine vistas and abundant wildlife," said a February op-ed from former Clinton administration Interior Secretary Bruce Babbitt, who called on President Obama to designate the plateau as a national monument while leaving the gas accessible from the sides.

Industry officials argue such a drilling technique is more expensive and technically unfeasible, since the area's geology exhibits pockets of gas rather than consistent seams that lend themselves to horizontal drilling.

BLM also notes that its existing RMP already restricts development on top of the plateau to existing road corridors, with surface exploration limited to about 1 percent of federal land, or 350 acres, at a time.

An undated BLM fact sheet estimates 1.8 trillion cubic feet of gas could be developed in the planning area over the next two decades, offering $1 billion in revenue to be split evenly between the federal government and Colorado.

Moreover, BLM maintains, and Judge Krieger has agreed, that a 1997 measure Congress passed transferring most of the lands in the Roan planning area to BLM required the agency to lease part of the top of the plateau to industry.

Past attempts by industry and conservation groups to settle the Roan controversy have proved fruitless. Court-ordered settlement talks between Bill Barrett and environmentalists broke down in fall 2010 after thousands of hours of negotiations over the previous year (Land Letter, Oct. 28, 2010).

Attorneys for the respective sides would not say whether the current settlement proposal represents a breakthrough. But Tipton's praise and the reported support of other bipartisan elected officials suggest the plan has political legs.

Bill Barrett also has a track record for striking deals with conservation and preservation groups over oil and gas drilling on public lands.

The company in 2010 reached an agreement with a coalition led by the Southern Utah Wilderness Alliance to scale back a drilling proposal in Utah's West Tavaputs Plateau area to spare primitive lands from development (Land Letter, Aug. 5, 2010).

Bill Barrett was also party to a pact signed in late 2009 with BLM, Utah agencies, counties and preservationists to protect Nine Mile Canyon and its estimated 10,000 rock art carvings and paintings from natural gas development.

Twitter: @philipataylor | Email: ptaylor@eenews.net

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