The Crested Butte News Serving the Gunnison Valley since 1999
“We all recognize that it is most likely going to be lucrative"
For a handful of families living off the land in the North Fork Valley, business has come down to a simple choice: adapt or fade away slowly. A few are the last in line of ranching families who carry on traditions started a century ago by relatives. Others are relative newcomers to the valley, still decades deep in the dream.
Along with her brother and sister, Dixie Luke runs a ranch outside of Hotchkiss where her great-grandfather settled in 1894. Her father, who got his first herd of sheep when he was 11 years old, built up the 2,000-acre spread; the ranch has raised sheep and cattle ever since. It’s a life reliant on the available resources around them, and now they’re looking to the natural gas below to keep things going.
“The ranching business has been touch and go and hold on if you can for generations. There are only three families left that had great-grandparents or grandparents settle here,” Luke says. “I think first of all, we all recognize that [gas development] is most likely going to be lucrative. We perceive it as a revenue source that will maybe let our kids make a living here and raise livestock and not live at the poverty level.”
Until the last few years, the ranch made its money in the traditional ways and has supplemented its income hosting elk hunters. But the Luke ranch sits on the southern tip of the Piceance Basin, a vast reserve of natural gas that goes north nearly to Wyoming and underlies the North Fork Valley and much of northwestern Colorado.
Now the ranch leases two well sites to SG Interests.
It’s been a mutually beneficial relationship, Dixie Luke says, and although the ranch and the developer haven’t always seen eye to eye, they have always found compromise that allows work to continue. The operations have been tucked away from the ranch’s prime meadows and out of sight for people traveling the nearby scenic byway.
But Dixie doesn’t pretend that natural gas development is an operation without risk. “There are certainly risks,” she says. “If you’re in the ranching business, land and water are our most important resources and we intend to take care of those.”
She also knows “natural gas is a resource our country needs” and wants to make sure first-hand that the resource is developed responsibly. She says she and her siblings have been “working with the company to locate the wells in places that will have the least impact.”
While gas development has been going on in the North Fork for decades, it wasn’t until 2005 that the private and federal mineral deposits in the area started to see major development.
Luke was one of a half-dozen North Fork landowners who attended a roundtable discussion on natural gas development at Western State College on Friday, February 2.
In hosting the event, the Gunnison County Planning Commission brought all of the players with a stake in the county’s gas development to the table. The idea was to “get down to the nuts and bolts in determining what is going to work for the county and everyone else involved in rewriting this language [in the county’s Temporary Regulations for Oil and Gas Operations],” commission chairman Ramon Reed said.
Members of the Planning Commission, staff and legal counsel sat at the “roundtable” alongside representatives from Gunnison County’s two major gas producers, Gunnison Energy and SG Interests, members of the “federal family” (BLM), and David Ludlam from the industry group West Slope Colorado Oil and Gas Association, as well as environmental advocates.
Topics on the roundtable agenda were mostly technical in nature, ranging from the various types and advantages/drawbacks of pits used in gas drilling operations; redundancy in the regulatory scheme; different technology being used in the gas fields; and the highly contentious practice of hydraulic fracturing.
Noticeably absent from the roundtable were the people—other than the federal land managers—playing host to the development on private land. But they didn’t go unnoticed.
During the two public comment periods, and occasionally outside of them, the landowners who had come to lobby in favor of relaxing the county’s regulations to make way for a ready source of revenue told their stories in turn.
Gary Volk is the patriarch of one of the long-established families in the North Fork. “We’ve been in that valley for 100 years, basically. My granddad walked over Kebler on the snow to homestead over there and he rubbed out a ranch from the sagebrush, rocks and oaks,” he told the rule-makers.
“There are four major 100-year families in that valley and we feel we’ve been good caretakers of the area and it is still a pristine area that hasn’t been overrun by subdividers and 35-acre tracts. But these major families are the key to that not happening…
“I concur that we’ve had good relations with the gas companies,” Volk continued. “They’ve worked with us on a daily basis when necessary to take care of problems.”
Volk went on to say he thought the oversight the industry gets from the state is enough. He thinks the system ensures that “if it isn’t done right, someone will be taking them to task.
“We want to have a future as a family and keep these ranches in open space where wildlife is plentiful… and we’ve done it on our own,” Volk said. “Now we have a income source that can help us maintain that into the next generation and I encourage you to be careful about over-regulating this industry… They can help us all.”
Nick Hughes has dealt with both SG Interests and Gunnison Energy over nearly a decade of gas development on his property. He’s happy with the way the state regulatory process works and wonders why, after so many years, the county is now trying to have a say in what happens on his land.
“It seems to me that you’re adding a third leg to a two-legged creature and I’m not sure what that does to protect me, to protect my interests or to protect the public good,” Hughes said, waving a finger over the Planning Commission and staff. “I see you guys as being completely cut off from any relevance to anything that’s happening on the other side of the hill.”
For all of the argument at the roundtable about the potential for repetition between the current state rules and those proposed by the county, the Planning Commission and legal counsel have been careful to say that county permit reviews can run alongside reviews required by state or federal agencies. They’re still ironing out other areas of redundancy or inconsistency.
But the county has been reluctant to rely too heavily on the state’s rules and has been eager to draft its own.
Gunnison County special counsel Barbara Green explained that the “county not only has its own authority granted to [it] by the state legislature, it has its own responsibilities… in protecting the socio-economics and the environment” that have nothing to do with the relationship between landowner and gas developer. “It’s a larger responsibility,” she said.
The county’s effort at protecting the environment seemed to be appreciated, to some degree, by all of the landowners in attendance, even if most said they felt the county was going too far in fulfilling its obligation.
David Clinger is an environmental planner and landscape architect who has owned a ranch along Muddy Creek for 30 years. It’s a labor of love that has cost him dearly, to the tune of $50,000 a year. “You can do the math… that’s a lot of money,” he says. And now he sees a chance to make some of it back.
Clinger spoke with conviction in front of the roundtable about his concerns for the process being laid out by the county. His entire property could be off-limits to drilling if the county followed through on its proposed amendments aimed at keeping drilling operations away from water bodies.
In the proposed amendment, the county has laid out rules that keep all oil and gas operations 300 feet from the high water mark of “the closest water body.” Gas operations within 1,000 feet of a water body will be required to maintain a closed system to minimize the chance of a leak.
Clinger felt the rules were so restrictive they would preclude gas operators from drilling on his property, even thought it’s already been leased to SG Interests. Many of the creeks in the drainage that surround his property, which would be classified as water bodies under the county’s proposed rules, “are nothing more than debris flows,” Clinger said.
“We’ve been up there for years, working with that land, trying to work with all of the environmental policy we deal with, and now we want some revenue from oil and gas. As I read these regulations, you would preempt me from leasing my minerals to SG [Interests],” Clinger continued. “I’m pretty upset about it.”
By the time the meeting had drawn to a close, Clinger said he “came here really worried, but I feel better right now.” Volk agreed, saying he was “encouraged by the ground they’ve covered today,” and reminded the Planning Commission that the families of the North Fork “value our land tremendously.”
After the meeting, Clinger paused in the hallway to explain his situation and the significance of having a gas operation on his property, punctuating his anecdote with a joke: “One fella tells another fella that he just won a million dollars. The second guys asks the first what he’s going to do with all the money. ‘Ranch until it’s all gone,’ he said.”
The Planning Commission will continue talking about the draft changes at a work session on Friday, February 11, with the proposed amendments to the Temporary Regulations for Oil and Gas Operations that reflect the broad, ongoing discussions about water quality to the Board of County Commissioners to follow this spring.
