U.S. Forest Service set to allow oil, gas drilling in — not on — Pawnee National Grassland in Weld County
For the Greeley Tribune
The U.S. Forest Service’s recent “no surface occupancy” stipulation for developing oil and gas leases on more than 100,000 acres within Pawnee National Grassland in northeastern Colorado is receiving a lukewarm reception from energy industry officials and environmental groups, especially as a policy precedent for drilling other federal lands.
This requirement “will work for the majority of leases in the grasslands” because most of the Pawnee Grassland is accessible by horizontal drilling from adjacent private lands, said Kathleen Sgamma, vice president of government and public affairs for Western Energy Alliance, which supports the oil and gas industry.
But the stipulation should not be considered a precedent for proposed oil and gas leases on other federal lands, she said. “Pawnee is a unique patchwork of federal, state and private lands,” Sgamma said. The approach “is not suitable for wholesale application elsewhere.”
In October, the Forest Service announced it would impose the stipulation on proposed oil and gas leases following an 18-month study. It reaffirmed that condition by including it in its final Environmental Impact Statement and Draft Record of Decision, which were both published in early December.
The “no surface occupancy” stipulation “protects the Pawnee’s unique shortgrass prairie ecosystem and recreation opportunities, while still supporting the economic recovery of oil and gas resources from Colorado’s Niobrara Shale reserves,” Glenn Casamassa, Arapaho and Roosevelt National Forests and Pawnee National Grassland supervisor, said in a Dec. 2 news release.
“This is a step in the right direction,” said Jeremy Nichols, climate and energy program director for WildEarth Guardians, which has spearheaded opposition to Pawnee Grassland oil and gas development since the Forest Service launched the environmental study in April 2013.
Nichols said while the requirement precludes fracking, building well pads, roads, structures or storing equipment on newly leased lands within the Pawnee Grassland — all important concessions — the Forest Service has adopted a “split-the-baby approach” that doesn’t address how off-site development could impact air and water quality and wildlife.
“The Forest Service took the tack that as long as (development) is not on the grassland, it’s not their concern,” he said. “They need to exercise their authority and responsibility to protect the public’s land. To do that, we think it is reasonable to hold neighboring development to a higher standard.”
WildEarth Guardians and other groups want the Forest Service to extend its regulatory oversight to horizontal drilling sites on adjacent private lands in a “buffer” around the grasslands, but Reghan Cloudman, spokesperson for the Forest Service’s office in Fort Collins, said the agency’s land-use authority is limited to the grassland.
“There is nothing we could do” outside the Pawnee Grassland or beyond assessing “the surface impacts (of leasing land) — roads, pipelines, drill sites,” Cloudman said.
NEXT: PERMITS TO DRILL
The final environmental statement released Dec. 2 opens nearly all federally owned areas of the grassland for oil and gas leasing. The agency is accepting public comment until Jan. 20 on both documents.
While the recommendations allow for oil and gas leases to be auctioned to the highest bidder, they do not authorize oil and gas development. To develop grassland leases, producers must file an application for a permit to drill with the Bureau of Land Management.
The grassland spans 146,367 acres within a 192,000-acre mix of public/private lands between Fort Collins and Sterling. About 43,000 acres already have been leased under rules adopted in 1997. The updated stipulations apply to only the 100,000 presently unleased acres. The only lands not available for lease are the Pawnee Buttes and Crow Valley Campground areas.
According to the environmental statement, if all potential leases were developed, the grassland would produce approximately 590 million barrels of oil and 1.1 billion MCF of gas — 1 MCF equals 1,000 cubic feet — from as many as 265 new wells over the next 30 years.
The statement estimates that, at an anticipated average annual production of 19.6 million barrels of oil and 39.3 million MCF of natural gas, Grassland leases will generate $241 million in federal royalties a year; support nearly 2,500 direct, indirect and induced jobs; and contribute $113.5 million annually to the region’s economy over a three-decade span.
Weld County would reap a projected $154 million increase in annual property tax revenues directly from grassland oil/gas leases. In addition, the county is forecast to receive about $23 million in annual federal rent and royalties revenue, and about $4.3 million a year from state severance taxes on Grassland production.
Nichols said the surface occupancy stipulation that allows oil/gas development from — but not on — a national grassland is significant “because of the nature of the development that is going to happen. Fracking, horizontal shale drilling, economically, it’s a viable technology and it hasn’t happened — yet — in a lot of places.”
There are similar proposals to develop oil/gas leases on Wyoming’s Thunder Basin and North Dakota’s Little Missouri national grasslands, he said. National grasslands have “high potential for oil and gas” development because, he said, “The geology is there,” and they are easier to access than forests and mountains.
“The timing definitely sets a precedent for no surface occupancy. In general, I think the Pawnee is a forerunner,” Nichols said. “We fear it will open the door to a significant ramp-up to additional drilling.”
Sgamma dismissed the viability of the NSO stipulation as a potential precedent because few other federal lands feature the mix of public/private lands that makes the grassland unique. For instance, she said, horizontal drilling would not be as broadly applicable on Thunder Basin and Little Missouri because both are vast, contiguous swaths of federal tracts far removed from private land.
Without advances in horizontal drilling — innovations cited repeatedly in the EIS — the Forest Service may not have approved offering oil/gas leases on the grassland, Sgamma conceded, but she balked at declaring the decision a significant victory for horizontal drilling on Western federal lands.
“No,” she said, “I would say horizontal drilling has been a significant victory for the entire nation for years. (Horizontal drilling) allows us to produce so much more while disturbing so much less, to extract more energy with a smaller footprint.”
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