A new chapter for Grand County oil and gas
August 16, 2016
The rights to what lies underneath the rolling hills of sagebrush and lodgepole surrounding Willow Creek Reservoir north and west of Granby could be up for sale next May, after the Bureau of Land Management announced the beginning of the process to put 29,000 acres of land in Grand County up for oil and gas lease sales.
The BLM conducts auctions of public lands for oil and gas leases on a quarterly basis. The process starts with the submittal of formal expressions of interest from firms within the oil and gas industry, who request that particular sections of land be put up for auction. The BLM also selects other sections whether or not they were requested in an expression of interest letter.
The agency then publishes maps of the proposed sections of land that will have the oil and gas leases available, and opens up a period for public comment. That started last week. After the public comment period closes, the BLM conducts an environmental assessment on the effects that oil and gas development could have on the particular parcel of land.
Interest around potential oil and gas resources in the area between Hot Sulfur Springs and Granby dates back to the late 1920s. A report published in 1930 by the US Geological Survey describes the Granby anticline, a formation creating a trough of rock that can serve as a trap for oil and gas. Several wells were drilled in the area in the 1950s, and another was drilled in 1974, but none proved to be economically viable.
The auctions have encountered repeated heavy protest action in the last year, causing the BLM to attempt to shift to online bidding. In May, an auction at a Holiday Inn in Lakewood, around 250 protestors overtook the hotel's parking lot and lobby to try and prevent the sale from happening. Similar protests have occurred in Salt Lake City, Utah and Reno, Nevada.
The protest efforts are coming from organizations like Greenpeace, the Rainforest Action Network, and Wildearth Gaurdians, who are mobilizing local activists to attend and disrupt BLM auctions. The effects of the action have been limited. The sale in Lakewood was delayed by about seven minutes.
But some BLM auctions are simply not happening due to a lack of interest from oil companies. The dip in oil prices that effectively busted the domestic oil and gas boom in the United States has severely reduced the interest in developing new wells.
According to a statement from BLM Director Neil Kornze in March, of the 4 million acres of land the BLM offered at auction in 2015, bids came for about 660,000 acres, or roughly 15 percent of the total.
The effects of the price crash are evident even in Grand County's limited oil and gas industry. Of the four firms that have operated in Grand County in the last couple of decades, two stopped drilling in 2014. Another, Oklahoma-based Sandridge Energy, filed for bankruptcy in May and is in the process of restructuring.
There are currently no authorized oil and gas leases in Grand County. The last one was closed in 2008.
Maps of the proposed leases in Grand County can be found at: http://www.blm.gov/co/st/en/BLM_Programs/oilandgas/oil_and_gas_lease/2017/may_2017_lease_sale/nominated_parcels.html. The public comment period on the leases runs until September 7.