Legal battle takes shape over Thompson Divide
The fight over drilling for natural gas in Thompson Divide might transfer from town meeting rooms to courtrooms later this year.
Conservation groups and Pitkin County government claimed at a town meeting in Carbondale Wednesday night that federal law is on their side to prevent drilling on natural gas leases in the heart of Thompson Divide.
Oil and gas company SG Interests, which holds 16 of those leases, begs to differ.
The core issue is whether SG Interests has legal grounds to hold onto 13 leases on public lands that are set to expire in May and another three that will expire in July. The company has asked the Bureau of Land Management to “suspend” those leases, or essentially stop the clock and let them pursue applications to drill.
“We would not be pursuing this if we didn’t think we had a right to do it,” SG Interests Eric Sanford told an audience in excess of 300 people at the town meeting. Rules are well-established for companies to be able to continue working their leases if their work begins before the leases expire, he said.
Peter Hart, an attorney for Wilderness Workshop, a conservation group helping lead the opposition to drilling, said SG Interests’ actions are a thinly veiled, last-ditch maneuver to try to hold onto the leases. The company did essentially nothing on the leases for 10 years, then scrambled in the last months in a desperate attempt to retain them.
Thompson Divide stretches from Ski Sunlight to McClure Pass, west of Highway 133. There are 221,500 acres of public land in the area, with 88,100 acres in Pitkin County.
Chris Seldin, Pitkin County assistant attorney, said the BLM manual clearly says leases can only be suspended – leaving them in the hands of a gas company – if they were diligently pursuing development and filed “a timely application for suspension.” SG Interests didn’t meet those criteria, he said.
The federal government cannot start a review of the oil company’s request under the National Environmental Policy Act until the gas company’s application has been deemed complete. The applications cannot be deemed complete without an on-site inspection, which cannot be performed while there is snow on the ground, Seldin said. So an environmental review cannot even start until after the leases expire, he noted. That’s evidence that SG Interests didn’t file a timely application to prevent the leases from expiring, according to Seldin.
He showed the audience a graph that showed natural gas prices throughout the 10 years SG Interests has held its leases in Thompson Divide. The company showed no interest in developing those leases when gas prices were high from 2003-08, he said. A glut of natural gas has hit the market due to big strikes in other states so prices have plummeted. Yet SG Interests wants people to believe it is interested in developing its leases despite the low prices, Seldin and Hart said.
They suggested the company is really interested in holding on and gambling that prices will rise before the leases finally expire.
But an SG Interests official previously noted the company tried to pursue planning well before the lease expiration deadline loomed. It applied in May 2011 to consolidate its leases into one unit and undertake master planning for the entire holding. The BLM hasn’t acted on that request, so SG Interests applied in October 2012 to drill six individual wells.
Hart said the “unitization” request was part of the last-ditch scramble to hold the leases. SG Interests should have asked the BLM to start the master planning process on its holdings five years ago if that is what it really wanted to do, he said.
Wilderness Workshop and Thompson Divide Coalition have launched a lobby campaign directed at the BLM called “Let the Leases Expire.” About 500 emails have been sent to the BLM urging the agency to determine the leases have lapsed. The conservation groups aim for a total of 1,000 emails.
“This decision is going to define the future of Thompson Divide,” Hart told Wednesday’s crowd.
The BLM has given no timetable for making a decision on the leases though May is coming quick.
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