Industry accuses BLM of retroactively canceling Western natural gas leases

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Mancos Shale Photo: US Geological Survey.

“BLM is sowing further doubt in the federal onshore program and accelerating the drive off federal lands…” – Sgamma

Colorado producers are up in arms after the Bureau of Land Management canceled 25 natural gas leases in the White River National Forest in late July.

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David Ludlam, executive director, West Slope Colorado Oil & Gas Association.

The U.S Geological Survey says the Piceance Basin is among the largest natural gas reserves in the county, according to industry group the Western Energy Alliance. The Mancos Shale alone now contains an estimated mean of 66 trillion cubic feet of undiscovered, technically recoverable shale natural gas (previous assessment was 1.6 Tcf), 74 million barrels of shale oil and 45 million barrels of natural gas liquids.

 The BLM released the Final Environmental Impact Statement (EIS) analyzing 65 oil and gas leases that had been issued on the White River National Forest from 1995 to 2012.  The BLM’s “preferred alternative” would cancel the 25 undeveloped leases within the Thompson Divide; apply new stipulations to the remaining leases that are not currently producing oil or gas; and make no or only minor adjustments for leases that are producing, according to an agency press release.
“The BLM’s proposed action strikes the right balance in land management,” said BLM Colorado State Director Ruth Welch.
“It respects last year’s decision by the U.S. Forest Service to maintain the character of the White River National Forest while also facilitating oil and gas development.”

In addition to the cancelations, the agency rendered dozens more leases undevelopable through retroactive regulations imposed a decade after the leases were issued, counters the Western Energy Alliance.

Owned by the American public, and operated by energy companies doing business in western Colorado, these retroactively canceled natural gas lease agreements have been under contract for more than 10 years.

“Property right protections afforded by the U.S. Constitution are what makes American different from most nations in the world whose rule of law is merely a reflection of whims and mob mentalities,” said David Ludlam, executive director, West Slope Colorado Oil & Gas Association.

“The decision to cancel natural gas leases retroactively is beneath the U.S. government. It’s in our collective best interest to continue challenging the decision to demonstrate our belief in the value of fairness and protection under the law.

“While additional administrative appeals are important and necessary, we continue viewing the legal and justice system as the best hope for ultimately restoring confidence in the integrity of BLM and their willingness to honor their commitments. WSCOGA will continue working with fellow trade associations and members to do all we can to right this precedent setting wrong perpetrated by an elite few against the mineral interests and energy resources owned by an entire nation.”

“Withdrawing leases over ten years after they were sold and paid for represents a gross violation of contracts between the federal government and the companies,” said Kathleen Sgamma, vice president of government and public affairs at Western Energy Alliance.

“By rewriting history and ignoring basic legal tenets, BLM is sowing further doubt in the federal onshore program and accelerating the drive off federal lands not just in Colorado but across the West.  Companies are getting the message loudly and clearly that the federal government cannot be trusted to honor contracts and property rights.”

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