Thompson Divide oil and gas leases could expire May 31

New legislation, local coalition seek ways to stop future development

With two months to go before the expiration of several federally granted oil and gas development leases in the Thompson Divide area, debate over the future of almost a quarter million acres of public lands is heating up.

Last week the Thompson Divide Coalition held a meeting in Crested Butte to discuss the future of energy development in Thompson Divide—an area of 221,500 acres located west of the Crystal River and north of McClure Pass. About 51,700 acres, or 23 percent of the total area in the divide, is within Gunnison County.
“The area is home to the largest contiguous aspen stand in the United States,” said Thompson Divide Coalition executive director Zane Kessler. “It’s home to 15 different watersheds that feed flows directly into the North Fork of the Gunnison River, the Clear Fork, the Crystal River, the Colorado River and of course the gold medal trout waters on the Roaring Fork River.”
In the early 2000s, the U.S. Bureau of Land Management let 81 leases in the Thompson Divide area to private industry groups, including SG Interests of Houston, Texas; Antero Resources of Denver (which recently sold its leases to Ursa Piceance LLC); and Gunnison Energy Corporation. The leases were purchased at the federal minimum price of $2.00 per acre for a total sale of about $2.5 million.
Under the conditions of the sale, if development has not occurred at the end of ten years, the leases expire, at which point the land can be re-nominated for public auction and a new lease may be granted. Expiration for the first round of leases occurs on May 31 of this year.
According to Kessler, a majority of the leases in Thompson Divide fall into this category and should be allowed to expire.
“Since the sale little has been done to develop the land, and currently there are no producing wells within the Thompson Divide area,” said Kessler. “This is a classic case of speculation in our opinion.”
The truth of that remains to be seen. Within the last year several of the leaseholders have filed permits to place well sites on their holdings. The permit process requires a federal Environmental Assessment including a public comment period, and it is unclear whether the process will be finished prior to the May 31 expiration date. Should the permits be approved by the BLM prior to May 31, the terms of the lease would be extended and development would remain on the table.
“Industry has held on to these leases for ten years and now they’re coming back to BLM saying [they’d] like a few more years to see if the price of natural gas goes up,” said Kessler. “We’re working to eliminate leases right now through either purchase or expiration—the coalition offered $2.5 million to buy out 81 leases in the Thompson Divide area over a year ago, and that offer remains on the table. We’ve also been working to secure federal legislation that would prevent additional oil and gas development and leasing in the area.”
The Thompson Divide Coalition is a Carbondale-based organization working to secure permanent protection from oil and gas development. Its board is made up primarily of large landowners, ranchers, and local community leaders. The $2.5 million the group has secured for use in purchasing oil and gas leases within the Thompson Divide area is being supplied by private individuals who, Kessler said, he “is not at liberty to name.”
“Regarding the development of Thompson Divide we have two main points,” said Kessler. “First, Colorado, especially the Western Slope, is already doing its part. If the argument is that we need to produce domestic clean burning natural gas then we’re doing it. We’re doing it more than pretty much any other region in the state. Second, these are two of the most significant wildlife habitat corridors in the state. It contains three of the most sought-after big game management units in the state. Game management units 42, 43, and 521 collectively generate more than 20,000 big game licenses every year.”
Thompson Divide contains large expanses of inventoried roadless areas that are also under lease. These areas carry important value for wildlife and habitat, and are also large draws for individuals seeking a true backcountry experience, said Kessler.
Yet Thompson Divide is not a pristine ecosystem. The first well was drilled in the area in 1947, according to the BLM, and some oil and gas development has occurred in every decade since. In the last 66 years 34 oil and gas wells have been drilled in the area, 31 of which were known to have found natural gas.
“A lot of times what we find in western Colorado is social and demographic issues couched as being about the environment,” said David Ludlam, executive director for the West Slope Colorado Oil and Gas Association. “What we’re seeing with Thompson Divide is a very privileged, very politically connected demographic asking for special treatment of the area they consider their backyard.”
To underline his point, Ludlam points to federal legislation introduced by Colorado Senator Michael Bennet. The bill, titled the Thompson Divide Withdrawal and Protection Act, was introduced March 22, 2013. If signed into law it would withdraw unleased minerals in the Thompson Divide area from future oil and gas development, and would also create an opportunity for existing leases to be retired should they be donated or sold by willing owners. According to the senator’s office, the bill was drafted at the request of local governments acting on feedback from leaseholders, elected officials, and community leaders.
“The Thompson Divide Coalition is asking for a legislative carve out, and they’re getting a response because of their affluence and their connections,” said Ludlam. “They want the energy, but they don’t want to see the infrastructure for it in their towns. It’s a symptom of the contrasting demographics we see across western Colorado. Think of Crested Butte and west Gunnison, or Telluride and Montrose.”
Rather than removing development opportunities from Thompson Divide through special favors and selective legislation, Ludlam suggests the public work to protect lands they care about through existing and appropriate channels.
“Processes do exist to remove lands from leasing,” said Ludlam. “U.S. Forest Service forest management plans or the BLM’s resource management plans are both subject to regular updates and both function largely as big zoning documents. They identify and stipulate what is allowed to happen, where it is allowed to happen and any areas of concern. The drafting and commenting on these plans is part of the process that comes from the National Environmental Policy Act [NEPA]. These are the best vehicles for long-term sustainable management, but now the rules are being made up as they go, and the process is being modified to meet the desires of a wealthy sliver of society.”
Bennet’s bill has not yet been scheduled for mark-up or review in D.C., and it is unlikely that movement will be made on the legislation prior to May 31.