Company steps up fight to reinstate leases on Thompson Divide
March 20, 2014
Denver-based oil and gas exploration company WillSource Enterprise is taking its appeal of a U.S. Bureau of Land Management decision that cut its lease area in the disputed Thompson Divide region in half two years ago to the federal Interior Board of Land Reviews.
And it has enlisted the legal support of the nonprofit property rights defense group the Mountain States Legal Foundation to help win the fight.
According to an overview of the case on the organization's website, a key question is whether federal agencies are being unduly influenced by environmental groups "to stop development of federal oil and gas leases where development has been diligently pursued."
In late January, following a review by the state BLM director's office, a 2012 decision was upheld denying a request by WillSource to reinstate its Willow Creek Unit back to its original seven leases, which cover a little more than 8,640 acres in the upper reaches of Divide Creek.
"BLM [in the original June 2012 decision] determined that WillSource did not meet all its drilling requirements under unit regulations, and reduced it from seven leases to three leases in 2009," area BLM spokesman David Boyd said.
WillSource maintains in its appeal that it had worked diligently to develop the leases, despite changing rules during the original 10-year lease term, and expensive requirements imposed by the agency, including a $500,000 bond for road work.
The size of the Willow Creek Unit was also reduced to 4,200 acres, and three of the four leases that had been in the unit then expired in 2011, after automatic two-year extensions, Boyd said.
WillSource requested more time to take action on the leases, and sought clarification of the rules to keep the leases active.
After the 2012 decision, the company took its appeal to the state director's office, which again denied the request on Jan. 23 of this year.
WillSource filed its appeal, along with a petition for stay of the expiration on the leases pending appeal, with the Board of Land Reviews in Washington, D.C., on Feb. 20.
The Mountain States Legal Foundation, in its summary of the case, noted that some 80 federal oil and gas leases have been issued throughout the Thompson Divide area.
"But environmental groups have used various political and legal tactics to prevent their development," the group said.
Meanwhile, the Carbondale-based Wilderness Workshop is continuing its efforts to keep the WillSource leases from being reinstated. On Wednesday, that group, along with the Natural Resources Defense Council, filed a formal opposition to the Land Board appeal and a motion to intervene in the case.
"After being told six ways to Sunday that its leases in the upper Divide Creek watershed are expired … WillSource is again appealing," said Peter Hart, staff attorney for the Wilderness Workshop.
"This issue was resolved long ago," he said in an email alert sent out on Thursday. "The operator had failed to drill as required by the terms of its unit agreement and leases. The BLM handed out extension after extension on drilling obligations.
"Finally, we stepped in and pointed out to the agency that extensions were unjustified by the operator's conduct, and the BLM agreed that additional extensions would be inappropriate," Hart said.
Wilderness Workshop and other groups, including the Thompson Divide Coalition of Carbondale, have actively opposed drilling proposals in the area, based on a belief that the area's value for recreation, wildlife habitat, livestock grazing and water resources outweighs its value as a source of natural gas.
The gas leases involved in the Willow Creek Unit are not associated with separate drilling proposals by SG Interests of Texas in its Lake Ridge Unit, which is also located within the sprawling 220,000-acre Thompson Divide region.
SG also has a pending request before the BLM to maintain several of its leases that are due to expire on April 1 following a one-year suspension. A decision on the suspension request is expected any day.