Auction of Roan parcels draws strong reactions
Glenwood Springs, CO Colorado
GOLDEN, Colorado ” Reaction from state leaders, the oil and gas industry and environmentalists over the Roan Plateau lease sale Thursday was swift and strong.
Right after the sale was finished, they began issuing statements about it, with many of them full of withering criticism for the Bureau of Land Management, Colo. Gov. Bill Ritter, the oil and gas industry and state environmental organizations. Just about everyone involved in the debate over oil and gas development in the area got whacked.
Thursday’s sale of 31 federal mineral parcels, which encompass about 54,631 acres in the Roan Plateau Planning Area, brought in about $114 million. About half of that money will be returned to Colorado.
The BLM sold all parcels in the area at once, an action that Ritter, a Democrat, U.S. Ken Salazar, D-Colo., Rep. John Salazar, D-Manassas, and Rep. Mark Udall, D-Eldorado Springs, have all criticized.
The three congressional Democrats introduced legislation earlier this year that would have called for phased leasing of the area, a process they believed would have brought the state more money. Phased leasing means auctioning a set of leases one after another over time.
Ritter said the BLM’s decision to lease the entire top of the Roan Plateau all at once “has severely shortchanged Colorado citizens.”
“The federal government has done a tremendous disservice to our state and to every Western Slope community impacted by drilling,” he said.
But Meg Collins, president of the Colorado Oil and Gas Association, said “thanks to the actions” taken by Ritter, the Salazars, Udall and out-of-state environmental organizations in the months before Thursday’s lease sale, “the great state of Colorado was robbed today.”
“Today’s $114 million sale illustrates key losses for Colorado and its citizens,” she said.
Collins said residents should compare the average acreage price in Thursday’s sale, which she said was $2,087, to Marathon Oil Co.’s May 2007 purchase of 8,700 acres for nearly $354 million or about $40,690 per acre. It wasn’t exactly clear from Collins’ statement late Thursday where that acreage is located.
“If industry believed it could produce the full volume of natural gas present beneath the Roan anytime soon, values much closer to the market comparables would have been obtained,” Collins said. “Today’s lease sale garnered national attention, and its outcome sends a clear message that Governor Ritter’s attempts to slow down the production of domestically produced, clean-burning natural gas are working.
Pete Morton, senior resource economist for the Wilderness Society, said Collins’ statements are just “more exaggerations trying to cover up (industry’s) past exaggerations.” He said that when lobbyists for the oil and natural gas industry estimated that $2 billion dollars could be generated from the sale, “they knew full well of the stipulations included in the Roan plan for protecting wildlife, water and the environment.”
“And yet they still insisted the sale would bring in $2 billion,” Morton said. “So it is very disingenuous of industry lobbyists to now say that the stipulations were the reason the bids were so low.”
Morton said one reason for the low bids could be the supply glut of domestic natural gas that “may be on the horizon.”
“With our domestic proven natural gas reserves at a 30-year high and with increasing competition from gas plays around the nation, it is not surprising that bid prices were lower than expected,” he said.
Colorado’s two United States senators also weighed in on the lease sale.
U.S. Sen. Wayne Allard, R-Colo., in a statement, said, “Development of the oil and gas resources on the Roan Plateau will do more to lower fuel prices than this drill-nothing-Democrat-Congress has done all year.”
Allard’s statement was a sharp rebuke to Salazar, who has disagreed with Allard on several energy-related matters this year, including development of the Roan Plateau and about whether to finalize commercial oil shale leasing regulations this year.
“While I am pleased that the lease sale took place, I am disappointed that it didn’t generate more money for Colorado,” Allard said. “The efforts of anti-energy politicians took their toll in the form of lower bids than we expected and cost Coloradans millions of dollars by pandering to the extreme environmentalists.”
Salazar, in his statement, said the Roan lease sale showed that the Bush administration and the “BLM turned their backs yet again on Western Slope communities.”
“The BLM’s decision to cover its eyes and ears and rush ahead with today’s auction not only puts our land and water and wildlife at risk, it has shortchanged the American taxpayer,” Salazar said. “Someone got a bargain in today’s sell-off, and it wasn’t the American people.”
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