Where does oil and gas belong?

Gunnison County comments on Department of Interior plans; “Multiple use doesn’t mean every use, everywhere, at the same time.”

[  By Katherine Nettles  ]

Gunnison County has weighed in on the new Bureau of Land Management (BLM) oil and gas leasing proposed rule and submitted comments last month asking the agency to give greater care to protecting the Thompson Divide area, deciding how lands are eligible to be leased for oil and gas development and making climate change impacts more of a priority. County commissioners have also decided to have more in-depth discussion about their overall goals and hopes for the oil and gas rulemaking in the near future.

The BLM completed a review of its onshore oil and gas permitting and leasing practices in 2021, and then responded to additional recommendations and laws (the Infrastructure, Investment and Jobs Act and the Inflation Reduction Act of 2022) requiring reform to its oil and gas program with a new proposed rule—the first comprehensive update to the program since 1988. 

The U.S. Department of Interior asked for comments on the Proposed Fluid Mineral Leases and Leasing Process Rule by September 22, and Gunnison County commissioners reviewed their letter extensively before submitting it for the deadline last month. They also determined they have more questions to explore around local impacts and will hold a work session to discuss it further in the coming months. 

Commissioner chair Jonathan Houck worked with county attorney Matthew Hoyt to draft Gunnison County’s letter of comment, which the commissioners discussed and approved on September 19. 

“What we’ve been trying to do is make sure that the rules the BLM uses for extraction meet the expectations of the citizens of Gunnison County,” said Houck. He recalled that prior to Senate Bill 181, which passed in 2019 and created state-wide oil and gas development regulations, Gunnison County had some of the stricter rules and regulations that applied to the industry. SB181 made such standards more widespread.

The proposed rule would implement increases to royalty rates, rentals, expressions of interest and minimum bids for oil and gas leases and update the bonding requirements for oil and gas leasing, development and production. It would steer development away from wildlife habitat and cultural resources and toward lands with existing infrastructure or high production potential; increases royalty rates to the federal government and starting bids for oil and gas lease auctions.

 According to a fact sheet from Citizens for a Healthy Community, a nonprofit dedicated to protecting the North Fork Valley water, air and “foodsheds” from oil and gas impacts, the BLM’s proposed rule also requires operators to cap shut-in wells that are no longer producing; eliminate non-competitive leasing practices that allow energy firms to “speculate” or “gobble up development rights for a pittance;” and ends last-day applications by energy firms seeking to suspend a lease expiration. The nonprofit also states that the reforms and higher bonding requirements are better but still too low. 

Gunnison County’s letter commended the BLM for addressing “long overdue fiscal reforms and important conservation goals with this proposed rule, including increased bonding, royalty rates and minimum competitive lease bid prices, the elimination of non-competitive lease sales and the end of 11th hour lease suspension applications.”

The county expressed its approval for the BLM rule’s goal of avoiding leases in important areas to fish and wildlife habitats or connectivity areas, historic properties, sacred sites and other lands with “important uses or resources,” including recreation, but asked that it go further in order to protect places like the Thompson Divide area, which includes the agricultural hot spot of the North Fork Valley and parts of Gunnison County. 

“We are troubled and concerned by the preference for lands with high development potential for oil and gas and proximate to existing oil and gas infrastructure, without any guardrails for ensuring development doesn’t take place in these areas where…inappropriate,” stated the county letter. 

A Thompson Divide Administrative Withdrawal would remove that area from lands considered to have high development potential for oil and gas leasing and protect much of it from oil and gas leasing, but until the withdrawal is completed these lands remain at risk, and the county asserted they will be “even more so under the proposed rule.”  

The county’s letter acknowledged the value of clustered development and preventing industrial development sprawl, “however, good land use planning and codes have constraints upon them that provide clear guidance for when development is inappropriate. That is missing from this proposed rule.”

The county proposed eligibility requirements preventing lands from being leased under various circumstances, some of which included recreation, agricultural, environmental, ecological or water resources values of greater value than oil and gas extraction. 

The county’s letter proposed eligibility requirements around climate change as well, such as where development would threaten a local government’s water resources directly and indirectly; lands in a location that have warmed 1.5 degrees Celsius or more; where lands have experienced severe or extreme drought for the last five years; or locations in a geologic hazard area where oil and gas development could have seismic impacts or activate landslides; where infrastructure leading to the lands, including roads and bridges, are vulnerable to collapse due to extreme weather; and where freshwater taken from the watershed for oil and gas development cannot be returned to the hydrological cycle.

Houck commented that Gunnison County has long understood the balance needed for extraction, whether it’s fluid minerals like oil and gas, or hard rock/coal mining. “They are part of our economy and part of the needs of this country and a global economy. But we understand that at the same time there should be some sensible guard rails and reasonable policy… there’s nothing in here that we have not taken a policy position on before,” he said.

Considering future topics

Commissioners Liz Smith and Laura Puckett Daniels had some other input which they discussed, but did not ultimately include in the letter based on the deadline timing. That included Smith’s inquiry about being more specific about protecting wildlife activity or migration corridors.

“We are suggesting that lands wouldn’t be eligible for leasing if there’s recreation, agricultural, environmental or ecological value. I think wildlife corridors fall into those categories for sure,” responded Houck. “And those values are greater than the oil and gas possibilities…we believe in multiple use of public lands. But multiple use doesn’t mean every use, everywhere, at the same time.”

Smith’s other concern was for wells no longer in production but not mitigated, and how to limit new wells until previous ones are addressed. 

“Doesn’t it make sense to quantify what that impact is before you continue to allow more leasing? Is there potentially a recommendation around that?” she said.

Hoyt said he wasn’t sure if federal law allows the BLM to say leases would be limited based on how many orphaned wells are already in an area.

“But part of our comment is we support the idea of increased bonding to basically create a financial obligation to reclamation,” said Houck. 

“When we’re talking about these environmental impacts that are already existing in a location, doesn’t it make sense to say we are already experiencing exacerbated effects related to climate change and other values,” said Smith. “It seems like it could be a consideration.”

Houck said the issue is that there are different operators, “so if one operator has issues with abandoning wells and then another operator is applying for a lease, you can’t toggle one operator to another.”

“I understand that,” said Smith. “But what I’m talking about is there is a holistic and collective environmental impact regardless.” 

Hoyt said he is not clear on how the various federal environmental laws might allow for that or not, and while they could include it in the letter comments “just be mindful of the fact that the BLM might come back and say we are not authorized to do this under federal law.” 

He said the BLM is required to consider climate change in any federal consideration, so promoting the suggestion as relating to climate change might be more successful.

“The question is, does federal law allow us, and for the BLM to regulate new leasing based on failures to address old leases,” he concluded, “I could see the arguments on both sides.” He said he could research it and get back to everyone.  

Houck suggested they revisit this topic in a work session, and perhaps reach out to oil and gas commission member and former Gunnison County commissioner John Messner. 

“There’s a mix of authorities and boundaries. And I feel like at least what we have in front of us today addresses that at a higher level. What I’m hearing is maybe we need a deeper dive on the abandoned well issue, and to understand how much of an issue it is in Gunnison County. Which I believe is fairly minimal, but we can take a look at that,” he said.

Commissioner Laura Puckett Daniels asked for more information and details about several aspects of the county’s letter, such as the climate-related eligibility proposals and the eligibility of lands based on various points that are hard to quantify, such as economic, recreation or ecological values, compared to oil and gas. 

“The spirit of it I totally support… there are these jumps in logic that aren’t totally fleshed out,” she said. 

After extensive discussions with Hoyt, Houck and Smith, Puckett Daniels agreed to submit it with a few grammatical edits, and the other commissioners approved. The county’s interest is to remain involved in the rulemaking process, and in the meantime the BLM is considering the comments it received from the county and other stakeholders during the comment process for potential inclusion in its final proposal. There is no estimated timeline for the final process as of yet.

The BLM’s proposed rule and rulemaking portal can be found at https://www.regulations.gov/document/BLM-2023-0005-0001.