Lease lacks guard against surface disturbance
Glenwood Springs, CO Colorado
NEW CASTLE, Colorado ” A federal lease underneath the Garfield Creek State Wildlife Area that a company is planning to develop does not contain a mandated requirement that guards against surface disturbances, Colorado Division of Wildlife officials said Friday.
The discovery has the state wildlife agency concerned that other Bureau of Land Management-controlled leases within the wildlife habitat and across the area may not have the surface protection, said Randy Hampton, a spokesman for the DOW.
“Beyond the individual lease error that has been discovered, we are now concerned as an agency about the spread of this lease accuracy problem,” he said. “We have communicated with the BLM regarding this issue. At the present time, they have been unable to come up with a remedy.”
David Boyd, a spokesman for the BLM, said the agency thinks the inconsistency in the lease language is isolated to “this specific parcel.”
“We are reviewing all the leases in the Garfield Creek State Wildlife Area to ensure that is the case,” Boyd said.
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The missing protection from the wildlife area lease is called a no-surface occupancy (NSO) stipulation, which requires companies to extract natural gas from other areas to minimize surface disturbances.
That stipulation is critical for the state wildlife area, DOW officials say, because it is the last contiguous piece of winter range for deer and elk in a hunting unit that stretches south of Interstate 70 from Grand Mesa east of Grand Junction to Glenwood Springs. The hunting unit is also the scene of large-scale natural gas development, which is occurring south of Rifle and Silt.
The discovery of the lease problem came to light when DOW officials recently met with representatives of Dejour Energy USA, a unit of Dejour Enterprises Ltd., a Canadian company, which is planning to develop the federal lease in the wildlife area.
“Dejour came in and rolled out a map,” Hampton said. “And they said, ‘Here is where we want to put our well pads.’ And we looked at their map, and the map the BLM had provided to us, and we said, ‘You can’t put a well pad there because there is a no-surface occupancy stipulation.'”
At that point, Dejour officials pulled out its lease and “were able to show there wasn’t a no-surface occupancy stipulation attached to it,” he said.
Dejour’s lease in the Garfield Creek State Wildlife Area is located in the heart of mule deer winter range, Hampton said.
Amendments to the BLM’s Glenwood Springs resource management plan in addressing oil and gas development in the area, which were completed in 1991 and 1999, require a NSO stipulation for any new federal mineral lease within the 13,234-acre habitat, Boyd said. Dejour Energy’s 1,520-acre lease was issued in 2001, he said.
There are 10,544 acres of federal minerals below the state-controlled habitat. The BLM has already leased 7,150 of those acres. Of the leased acreage, 5,980 acres carry a no-surface occupancy stipulation, according to the BLM. The 1,170 acres that don’t carry the NSO requirement were leased before 1991.
Boyd said that it appears there was a “technical error” in not including the NSO stipulation to Dejour’s 1,520-acre lease.
“We are looking into what happened and what we can do to fix it,” Boyd said.
Harrison Blacker, president of Dejour Energy USA, said the language in the company’s lease provided “base assumptions” for how it planned to develop the parcel.
“We are going to do our homework, and we are going to sit down with all of the parties and see what the next steps have to be,” he said Friday.
Denver-based Orion Energy Partners, which recently completed drilling in the wildlife area, is proposing another three well pads in the wildlife area. Those drilling locations would access private mineral rights, however.
The DOW cannot prevent natural gas development in the habitat because it does not own the mineral rights in the area. State law allows mineral owners to have a reasonable use of the surface to drill for natural gas even if the owner of the land objects.
Steve Torbit, regional executive director for the National Wildlife Federation, said his group encountered a similar situation where a drilling restriction was left out of a BLM lease.
“We actually had to sue the BLM in Wyoming several years ago because of the same trick,” he said. “One of the things the BLM will tell you is that they cannot, after (the lease is issued), put restrictions on the drilling. That is simply not true.”
If there is an error in the lease, the agency can reinstate stipulations and conditions, Torbit said.
Hampton said his agency will work with the BLM to “aggressively” look into the problem of the missing NSO stipulation and whether it might affect other leases in the area. He added the agency had no indications that the problem was “anything more than an oversight.” There was some “urgency” in finding answers over the missing NSO stipulation because of Dejour and Orion’s plans to drill in the area, Hampton said.
“Dejour’s intent is to put a drilling rig (in the wildlife area) next spring,” he said.
But Hampton said it might take some time to determine if the lease problem has spread to other mineral parcels.
“It is a very convoluted process,” he said. “It took three days to sort out this one, single lease parcel.”
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