The Crested Butte News Serving the Gunnison Valley since 1999
Permitting delay could cause big problems for gas company
Even after Gunnison County Planning Commission chairman Ramon Reed walked out of a meeting on Friday, May 20, energy company SG Interests I Ltd. got approval to drill two more gas wells on existing pads in the North Fork Valley, before losing access to a drill rig and perhaps its claim to natural gas deep under the Bull Mountain Unit.
The meeting was part of a Planning Commission review of applications for three natural gas wells known as Cow Skull, Horse Lady and Pasco Spatafora. Of the three drilling permits being applied for by SG Interests, one will require a new 1.4-acre well pad and two would be located on well pads that are already in place on private property.
But as the county gets ready to move toward a revised, more stringent regulatory review of the gas industry, the Planning Commission took on the review of the permit applications.
During the process, the commissioners requested a site visit and held several meetings on the applications. At the meeting on Friday it began to look as if the review would be continued further.
An issue with the location of the Pasco well was slowing the process down, although SG Interests had planned to position the well on the property where the landowner wanted. But the proposed location would require an infeasibility waiver, which would allow drilling to take place in a less desirable location because the preferred locations are technically not feasible for drilling.
“I don’t think landowner wishes are sufficient grounds to grant an infeasibility waiver,” Reed told SG Interests’ operations and land manager Eric Sanford. “You’ve applied for a technical infeasibility waiver.
“Anything major I think needs to be here in writing and we don’t have it,” he said. “If you’re asking me to vote on Spatafora today, I will vote no, because I don’t have anything that shows me convincing evidence to approve an infeasibility waiver.”
Since the review was for all three permit applications, stopping one could stop them all.
That wasn’t going to work for Sanford, the applicant’s representative at the meeting. He explained that at the other end of the application review was an operation waiting on the permits.
Sanford told the commissioners that delaying the permits any longer could have grave implications for the company’s operation and investment in the Bull Mountain Unit, spanning 20,000 acres of the North Fork Valley.
“I received an email from the drilling manager saying if we don’t give them an answer [about the permits] they’re going to move the rig to Utah and there’s not another rig available that we can put under contract,” he said. “If we don’t drill two wells we lose the unit. The BLM says you must drill and complete two wells per year or you lose the Bull Mountain unit.”
The majority of Planning Commissioners were willing to work with SG Interests on the two co-located wells and began to offer to parse out the third application, which could be approved once the matter of the infeasibility waiver was resolved.
However Reed was uncomfortable with the sudden changes being made to the application and its review. “I want the technical infeasibility thing dialed in and not make conditions on the fly without a chance to review them,” he said. “We don’t have the conditions we’ve talked about before us today.”
“We’ve been through this before… and I’m not willing to do that again.”
He got up and said, “I’m leaving.”
“The Planning Commission has a policy of not considering a final approval at the same meeting as a public hearing on any application. The department staff was getting a lot of pressure from the applicant to have a vote at that meeting, and in turn staff was pressuring the Commission to take action,” Reed wrote in an email to the Crested Butte News Monday. “I did not agree with the urgency to complete action last week, especially since we had not previously given staff direction for preparation of a draft decision document and there were several issues that needed to be addressed in the final approval. I had previously told [assistant planning director] Neal [Starkebaum] that I would not participate in such action on Friday, so when it became apparent that the rest of the members present were willing to proceed, I left the meeting.”
The remaining commissioners voted 3-1 to approve permits to the two co-located wells, while reserving judgment on the Pasco Spatafora well until their meeting on June 3.
