The door has opened a bit wider for oil and gas development in Southwest Colorado under the Trump administration.
And the time frame for public comment and protest periods is expected to be shortened as a result.
A Jan. 31 directive issued by the U.S. Department of Interior means the local Tres Rios Bureau of Land Management office could have up to four oil and gas lease sales per year, up from just one. The new policy supersedes a 2010 Interior Department order that limited lease sales to one per year for each BLM district.
The directive for additional lease sales also applies to BLM-managed fluid minerals in national forests.
But whether that means there will be an increase in drilling in the area is unknown, said Connie Clementson, field manager for the Tres Rios BLM, based in Dolores.
“It’s conceivable that Tres Rios could have lease sales in every quarterly sale, instead of just one, but it depends on industry expressing interest to lease in our area,” she said.
In a federal mineral lease sale in March, the Tres Rios BLM office sold four parcels totaling 1,400 acres for $10,063. The parcels are in La Plata and San Miguel counties, and were sold to R&R Royalty.
The leases to extract fluid hydrocarbons are awarded for a term of 10 years. BLM officials point out that additional drill-site environmental reviews and possible mitigation are required before drilling can begin. The federal government receives a royalty of 12.5 percent of production value, and Colorado receives 49 percent of revenues from leases issued.
As a result of new leasing reform rules, the Tres Rios office has begun planning for a second potential sale this year, Clementson said, in addition to its usual March sale. By June 1, officials will know whether there are expressions of interest from industry to tap local oil and gas reserves, then public comment would be sought and a sale would be arranged for December.
“The rollout period for lease sales will go from nine months to six months,” Clementson said. “We’re expecting shortened comment period time frames, so people will have to be aware of those new time frames.”
Exact changes to public comment periods are being worked out by the state, said BLM public affairs specialist Shannon Borders. She said they expect figure it out by June 1.
“We’re pitching several ideas on how to inform the public to conform with the new policy,” she said. “People will have to respond quicker to leasing proposals if they have issues and concerns. We suggest putting the BLM leasing webpage on your favorites.”
Also under the new rules, protest periods for new leasing will be shortened to 10 days, and leasing can be authorized while the protest merits are considered.
Master leasing plans intended to further scrutinize possible impacts of oil and gas development have also been eliminated. One was being considered for federal fluid minerals underlying Montezuma and La Plata counties, but no longer.
Dropping MLPs opens up previous leasing interests in the Hesperus area that had been deferred pending the MLP planning process.
Hesperus-area residents have expressed concerns with increased drilling and the potential impacts of hydraulic fracturing, known as fracking, on water sources and health.
The Gothic Shale natural gas reserves in the Hesperus area may involved fracking. The tactic, long used by the industry, injects large volumes of water mixed with sand and small amounts of chemicals deep underground to release the gas from pockets in the rock.
Clementson said the companies that previously expressed interest in lease in the Hesperus area have since pulled out. She said there are no current development interests in that area, but they would be considered if there are in the future.
“The state office went back to those companies to see if they were still interested but have not heard back,” she said.
Oil and gas watchdogs are concerned about the new rules limiting public comment and environmental review. But industry supports the streamlined process.
Jimbo Buickerood, of the San Juan Citizen’s Alliance, said the new leasing process is an attempt to “minimize input from citizens as well as from local government entities such as county commissions and town councils. The new time frame for comment, should it be allowed, of only 10 days is woefully insufficient for any citizen or local government to become aware of proposed parcels, and investigate possible concerns for comment.”
He cites an example where a recent lease was proposed near McPhee Dam. Residents were worried about drilling deep within a mile of the dam structure, and took the concern to the Montezuma County commissioners.
“If the comment period is too short, there may not have been enough time to make local government aware of that situation,” Buickerood said.
The BLM subsequently deferred the lease near the dam.
Eric Sanford, of SG Interests, an oil and gas company in Durango, welcomed the new rules because they remove duplicative environmental analysis, reduce too lengthy public comment periods and improve transparency with the BLM office for industry.
“It eliminates a lot of the delays to development and still allows for adequate analysis to protect resources,” he said Wednesday.
Sanford said the new rules have helped him track the company’s expression of interests for oil and gas development.
“In the previous administration, I would call the BLM, and they would not know the status, but now the process is more transparent, and I can find out the information important to our business. Knowing where we are in the process and being able to track it allows us to properly plan and is more fair,” he said.
“It’s better government.”
In an interview with Natural Gas Intelligence’s Shale Daily, Kathleen Sgamma, president of the Western Energy Alliance, applauded the new leasing policy. She said the previous rules that rotated lease sales among BLM districts hurt areas that had booming oil and gas development such as the Permian Basin in New Mexico.
“If the company caught the cycle wrong, it could result in lease nominations taking a few years to come up for sale,” she told NGI’s Shale Daily.