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October 26, 2012
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SG Interests applies to drill near Sunlight

GLENWOOD SPRINGS, Colorado - SG Interests of Houston last week filed its first, formal application for a permit to drill (APD) a single gas well in the Thompson Divide area.

The lease and proposed well site is located above Four Mile Park on Beaver Creek, due south of Williams Peak and about a mile and a half southwest of Sunlight Mountain Resort. The site is just north of the Garfield-Pitkin county line.

If the well is approved by state and federal agencies, the company expects to begin drilling as soon as possible, said Robbie Guinn, vice president for land at SG Interests.

"And this is going to be the controversial part," said Guinn. "Access will be through Glenwood Springs and up Four Mile Road to Four Mile Park, and then off USFS Road 300."

SG Interests, according to Guinn, ultimately plans to install seven surface well pads for nine wells on its 18 leases in the Thompson Divide area, which stretches from Sunlight south to Coal Basin west of Redstone.

Four Mile Park is used by ranchers to graze livestock and by recreationalists for the hiking, biking and skiing, according to the Carbondale-based Thompson Divide Coalition (TDC), which is leading the fight to prevent gas drilling in the area.

"As a local business owner, I am extremely disappointed that SG is moving forward with drilling applications," said Chuck Ogilby, owner of the Avalanche Ranch Hot Springs resort and a board member of the TDC.

"Our customers come from all over the country to enjoy the untouched landscapes and recreational opportunities that exist in the Thompson Divide," Ogilby continued. "I am hopeful that SG will return to the table to negotiate a path forward that protects this area for equally important, existing uses on the land."

The new APD is for one well on one well pad, Guinn confirmed. More applications to drill will be filed, he said, "as soon as we can get them prepared."

This first APD, for a lease covering more than 2,000 acres, was filed on Oct. 17, said David Boyd, spokesman for the U.S. Bureau of Land Management (BLM).

Boyd said the application currently is being reviewed for completeness by BLM and White River National Forest officials.

Both the BLM and forest service have jurisdiction over the area in oil and gas matters, although the proposed well site is located inside the forest boundary.

Once it is deemed to be a complete application, Boyd said, the two federal agencies will begin an environmental assessment, a process that he said could take a year or more.

Guinn said the lease involved in this first APD is scheduled to expire on May 31, 2013, and that the company's other leases in the same area are all set to expire in late May or early June of next year.

The company can request a lease suspension to "stop the clock" for the duration of the environmental assessment (EA) process.

With a suspension, the lease would remain valid even if the EA process stretches past the expiration date, and Guinn predicted that a request for a suspension is likely.

Thompson Divide is a 221,500 swath of land that stretches from Sunlight Mountain Resort to McClure Pass, and from just west of the Crystal River over to Divide Creek.

It has been the subject of intensive controversy for the past several years, as local organizations lead by The Thompson Divide Coalition have resisted energy industry efforts to drill in the region.

"As a coalition, we will continue to engage the industry in an effort to make leaseholders whole on their investment in the area," said Zane Kessler, director of the TDC. The organization is hoping to convince drillers to give up their lease in return for a cash settlement.

"I'm confident we can reach a deal that recognizes the economic and environmental importance of existing uses on this relatively small area of backcountry," Kessler added.

Peter Hart, attorney for the Wilderness Workshop, wondered why the lease has gone undeveloped for years until now.

"SG Interests has held this lease for nine and a half years of a 10-year term," Hart said. "They chose not to develop it when gas prices were high, they chose not to develop when gas prices were low. Now they've submitted an 11th-hour proposal to extend the term of lease."

jcolson@postindependent.com


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The Post Independent Updated Oct 26, 2012 01:02AM Published Oct 26, 2012 12:58AM Copyright 2012 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.