Colorado’s Mancos Shale: ‘Game changer’ for jobs, American energy security

Mancos shale’s tremendous energy and economic potential may be jeopardized by regulatory hurdles

By Randy Hildreth, EnergyInDepth

This week, the Subcommittee on Energy and Mineral Resources of the House Committee on Natural Resources held a hearing to discuss the opportunities and challenges of developing the Mancos shale in the Piceance Basin in Western Colorado.

The hearing follows a recent resource assessment report by the U.S. Geological Survey (USGS), which found that the Mancos shale, now the second largest shale gas reserve in the country, contained 66 trillion cubic feet (Tcf) of natural gas – more than 40 times the agency’s previous estimate of 1.6 Tcf.

At the hearing, the witnesses spoke to the energy and economic opportunity represented by the Mancos shale – and why policies that discourage development would be detrimental to local communities and America’s energy future.

Prefacing his overview of the Mancos resource potential, USGS Program Coordinator Walter Guidroz reminded the Subcommittee that these vast energy supplies “underpin economic prosperity, environmental quality, human health and political stability”:

“Energy resources are an essential component of modern society. Adequate, reliable and affordable energy supplies obtained using environmentally sustainable practices underpin economic prosperity, environmental quality, human health and political stability.”

The economic prosperity accompanying energy development is particularly evident at the local level, which was explained Mesa County Commissioner Rose Pugliese.

In her testimony, Ms. Pugliese described how the Mancos shale – which she called a “game changer – represented an opportunity to create a “clearer and more stable economic future for western Colorado.”

Discussing the need to “ease the federal regulatory burden on western Colorado natural gas development to improve our collective local economies,” she said that federal policies that encourage, or discourage, the development of the Mancos shale will “determine if Mesa County and our neighboring counties have a strong and viable economy”:

“As you have heard from me today, there are significant energy resources in our western Colorado counties. Mesa County is 72% federal lands. What that means is that the federal government controls our economy and the economies of all our western Colorado counties. Congress and our federal agencies have the power to determine if Mesa County and our neighboring counties have a strong and viable economy. You get to decide if we succeed or fail.”

As industry representatives explained, safe and responsible oil and gas development has long coexisted with local industries, such as farming and tourism.

Robert Guinn of Gordy Oil Company told the Subcommittee that a single well completed in December 2015 just seven miles from the Thompson Divide had already safely produced nearly one billion cubic feet of natural gas, and “that same resource exists in the Thompson Divide area. … If the Thompson Divide is pristine now; it will be pristine after development.”

Similarly, Robert Downey of Gunnison Energy, which has drilled seven Mancos shale gas wells to date, explained that many of Gunnison’s 30-year wells took only two to four weeks to drill and currently operate in national forest and alongside cattle grazing land.

When Subcommittee member Rep. Jared Polis (D-CO) raised concerns about developing the Mancos shale, citing other shale plays that could potentially provide the energy that the country will need in the future, Mr. Guinn explained that restricting energy development today would be short-sighted:

“I would not support permanent withdrawal from the Thompson Divide. You’ve heard testimony today of the significant resource [there]. We don’t know what this country’s energy needs are going to be going forward, so removing an asset like that from the inventory I believe would be bad policy.”

The Mancos shale’s tremendous energy and economic potential, however, may be jeopardized by regulatory hurdles, such as Bureau of Land Management policies and decisions that have increased the costs and unpredictability of operating on public lands.

As Subcommittee on Energy and Mineral Resources Chairman Doug Lamborn wrote in a memo about the hearing, the current regulatory climate that discourages oil and gas production on federal lands is “pushing investment away from federal lands and onto state and private lands, or to foreign countries.”

Wrapping up the hearing, Rep. Jeff Duncan (R-SC) said, “I look at this as a strategic national reserve. I hope we don’t take the potential to develop off the table.”

All-in-all the key takeaway from the hearing is that Colorado’s Mancos Shale is truly a “game changer” not only for Mesa County but for the entire nation.

Originally posted July 14, 2016 at EnergyInDepth