Oil and Gas Development — Part II —

By Alissa Johnson

Editor’s Note: In this summer series, reporter Alissa Johnson looks at the big picture of oil and gas development in Gunnison County. Last week, we looked at its current scope and potential future. This week, we examine trends in the oil and gas discussion when development proposals come under review.

Despite the downturn in the oil and gas industry, there are three high-profile development proposals getting a lot of local attention: the Bull Mountain Development Unit covered last week; a nearby 25-well project that includes six wells near Little Henderson Creek; and a proposed lease exchange in an area near Carbondale and Marble known as the Thompson Divide.

A look at the discussions surrounding those proposals reveals some of the trends in the oil and gas discussion, including a high potential for public confusion and disengagement as well as a broader debate that occurs when oil and gas development intersects with uses such as recreation and agriculture—namely, are there places where it should not be allowed, and if so, how do stakeholders make that happen while still allowing for development elsewhere?

Public confusion and fatigue with the issues

Barbara Sharrow is field manager for the Uncompahgre Field Office of the Bureau of Land Management (BLM), which is overseeing the development of the Environmental Impact Statement for the Bull Mountain Development Unit and leading the Environmental Assessment process for the five-pad, 25-well proposal. She has observed continued confusion among the public, in part because proposed actions don’t always match the final outcome.

“The public is very confused about a lot of very different things when it comes to oil and gas,” Sharrow said. She started working with the field office in 2004, but four years prior to her arrival, Gunnison Energy submitted a proposal to drill 600 wells.

“It caused a complete uproar and to date we have a total of 36 wells. It’s 2015 and that was 2000. The companies are learning more about what is actually under the ground, but frankly with the number of wells, they still don’t really know,” said Sharrow.

Sharrow pointed out that within the last few years, one exploratory well near the Bowie Mine outside of Paonia came up dry, and the entire development unit was subsequently abandoned. That unpredictability lends itself to uncertainty about the true scope of development, just as the number of proposals under consideration can lead to confusion.

Alli Melton, public lands director with Crested Butte-based High Country Conservation Advocates (HCCA), has spent much of her spring and summer weighing in on the draft Environmental Impact Statement (EIS) for the Bull Mountain Development Unit and the Environmental Assessment for the 25-well project. During the same timeframe, the Forest Service released a draft EIS for a plan to manage forests impacted by Sudden Aspen Decline and the spruce beetle epidemic—a different agency, yet still one more thing vying for public input.

“It’s tough to say whether it’s truly a trend, but there’s a legitimate concern of public fatigue,” Melton said. She doesn’t believe it’s intentional on the part of the agencies, but did say that the draft EIS for the Bull Mountain Development Unit was several hundred pages alone—expecting the public to keep track of what’s in each document and the various public comment periods is a tall order.

“When you look at public comment and public involvement, my concern is that people are getting inundated and fatigued, and not taking advantage of the opportunity to comment,” Melton continued.

Jim Ramey, executive director for Hotchkiss-based advocacy group Citizens for a Healthy Community (CHC), sees similar confusion among his constituents, many of whom are concerned about the proximity of oil and gas development to farms and ranches in the North Fork Valley. “It’s tough for them to know what’s what and keep things separate,” he said.

From the BLM’s perspective, Sharrow said that kind of concern has led the agency to group some proposals together. “That’s why the 25-well, five-pad project is one project,” she said, indicating that it could have been four separate projects between the BLM and the Forest Service. The agencies combined the review process, with the BLM taking the lead and consulting the Forest Service. But even with such efforts, some wonder if the big picture view is complete.

Missing the big picture?

“Right now it looks like there would be a whole lot of unknowns and unintended consequences, particularly negative consequences,” Melton said of proposed oil and gas development. In her analysis, the cost of carbon pollution and the cumulative impacts of development are insufficiently examined. She also believes that in draft assessments, there has been no appreciable difference between proposed alternatives.

“That is a problem when you look at the size and scale of oil and gas development proposed in the area, especially when you look at cumulative actions such as coal and timber sales. That can all have really large implications,” Melton said.

The BLM’s Resource Management Plan, which outlines the region’s resources and their management, is also out of date. The agency began the process of updating the document in 2010 to replace a 1989 Uncompahgre Basin Resource Management Plan, but that project has continually been held up—most recently, according to Sharrow,  there are several county, state, and federal cooperators that need to review the project and are taking longer than anticipated. She expects a final plan in December.

For Ramey and Melton, the lack of a plan has been an issue, with both expressing concern that the age of the existing document leaves a significant gap when it comes to agency analysis.

“The BLM has to consider the broader impacts of its actions, and one of the best ways it does that is through land use plans,” Ramey said.

But Sharrow sees things differently. She says the agency goes through some sort of analysis for every project, whether a full EIS or an Environmental Analysis, and considers cumulative impacts carefully. The draft EIS for the Bull Mountain Development Unit, for example, references the 25-well project.

What the public won’t see, Sharrow explained, are potential projects that have been discussed elsewhere (like the county level) but have not yet made it to the BLM. “In our minds, that is completely hearsay because the companies have not come in with a proposal,” she said.

Sharrow also said the agency takes into account deficiencies in the Resource Management Plan and has ways to consider the most up-to-date information.

“We look at the old RMP and then look at what each specialist determines is not state of the art or not current, and we are able to add conditions of approval and other mitigations,” she explained.

The different interpretations seem to suggest philosophical differences—the agency pointing toward its thorough consideration of every project’s impacts, and advocacy groups expressing frustration that deficiencies in those analyses are not thoroughly addressed when brought up.

The release of the final EIS for the Bull Mountain Development Unit may be telling, then, as the agency addresses public comment from the draft EIS. Sharrow confirmed that the BLM has settled on a preferred action for the Bull Mountain Development Unit, but the final EIS may not be available this fall as originally expected.

“We have to go to the Fish and Wildlife Service and get concurrence on wildlife findings, and due to staffing issues at the Fish and Wildlife Service and the listing of the sage grouse, they are completely backed up,” Sharrow said. She hopes to have a draft to the public this fall.

Leaving some areas undeveloped 

The third front-and-center issue—Thompson Divide—illustrates yet another aspect of the oil and gas discussion: Are there areas that should be left undeveloped, and if so, how should the companies that hold the leases there be compensated? It has not been an easy question to answer, and a recent flurry of activity shows that things are still in flux.

The Thompson Divide area encompasses 221,500 acres of federal land, including 51,700 acres in Gunnison County, and much of the Divide remains roadless. In 2003, the Bush Administration issued 81 mineral leases in the area at $2 an acre (by contrast, leases elsewhere in Colorado have gone for $10,000 or more). That garnered a lot of concern from nearby communities. According to information provided by the Thompson Divide Coalition, Thompson Divide hunting, fishing, recreation and ranching support nearly 300 jobs and $30 million in annual economic output for local communities. With 61 of the oil and gas leases still active, the Coalition is seeking protection for the area.

“Ultimately, those [recreational and agricultural] activities form the lifeblood of our rural economy on the Western Slope,” said Zane Kessler, the Coalition’s executive director. “For us it’s not that oil and gas shouldn’t occur anywhere, it’s that it shouldn’t occur everywhere.”

The Coalition has been working in support of legislation introduced in 2013 by Senator Michael Bennet that would withdraw unleased public minerals in the area and provide the opportunity for existing leases to be retired: the Thompson Divide Withdrawal and Protection Act. The coalition has come together with the Senator and what Kessler calls strange bedfellows to find a balance between development and conservation. Oil and gas company Gunnison Energy and Gunnison County have been among those at the table.

“We’ve seen success stories in Montana, Wyoming, and New Mexico… We know it works, and we know the stranger the bedfellows, the greater the chance of succeeding,” Kessler said.

Not everyone has been at the table in equal measure, however. SG Interests has been less predictable with its involvement. Last spring, the company met with various boards of county commissioners to promote a lease exchange that would give the company new leases in Delta, Mesa and Gunnison counties. It would also place a temporary hold on the Thompson Divide leases instead of a permanent hold.

The idea doesn’t sit well with some. Citizens for a Healthy Community, for example, worried about the proximity of new leases to its constituents’ communities in the North Fork Valley. “We already have some 80,000 acres leased plus an additional 30,000 if this goes through. Without something in it for the community, it becomes tough to have a conversation about the lease exchange,” Ramey said.

Ramey has been working with the Delta County commissioners and North Fork Valley leaders to identify the areas they would like to withdraw from development in and around the North Fork Valley and ensure that any solution to the Thompson Divide issue doesn’t come at the expense of the North Fork Valley. He and a group of key stakeholders also made a trip to Washington, D.C. to meet with Bennet, Congressman Scott Tipton, and staff in Senator Cory Gardner’s office about the importance of a comprehensive solution.

Delta and Gunnison counties have also called for comprehensive solutions. While both boards are supportive of a lease exchange, commissioners in both counties recently sent letters to Senators Bennet and Gardner as well as Congressman Tipton emphasizing the need for an overall Thompson Divide solution and not a lease exchange focused solely on SG Interests (commissioner Phil Chamberland voted against the letter, see page 9 for more detail).

Yet SG Interests made headlines at the tail end of July when it signaled its intent to drill an exploratory well in the Thompson Divide by filing a “notice of staking” with the Bureau of Land Management.

Shortly afterward, Senator Bennet’s office issued a press release applauding Gunnison Energy, Gunnison County and environmental groups for their continued negotiations and recent agreement to move a border on the proposed lease withdrawal. The release indicated that the new boundary would be reflected in an updated Thompson Divide Withdrawal and Protection Act, leading some to believe that Bennet will announce new legislation in coming weeks.

Overall, the level of activity seems to be a reminder that while oil and gas development has a place on the Western Slope, the details of what that means are still in development and subject to many different viewpoints. Even as entities like Gunnison County see the benefit of oil and gas development, there is recognition that being at the table is key to ensuring that it takes place in the right areas and with proper oversight.

Next week we’ll take a look at what types of oversight exist and how Gunnison County has been at the forefront of oil and gas regulations.