Grand County acreage up for oil and gas lease sale
Grand County may experience the oil and gas exploration that has changed the economy and landscape of the rest of Northwest Colorado.
An expanse of land a mile-and-a-half north of Hot Sulphur Springs stretching to the Willow Creek Reservoir and a few parcels south of the town may be eyed for oil and gas exploration, the first such offering in East Grand County.
About 31,000 acres of local public lands are included in the Bureau of Land Management’s November 2007 quarterly oil and gas lease sale.
The Bureau is required by law to offer federal mineral estates. The 30 parcels near Hot Sulphur are considered “moderate potential,” for producing resources, according to Dave Stout, field manager of BLM’s Kremmling field office.
Stout said he couldn’t say exactly who nominated the lands for the lease sale, but said it could be up to 30 different individuals and companies.
The rising price of oil and gas may be the reason this land is being nominated, he said. As many as 177 parcels, covering 183,733 acres, are being offered statewide. About 84 of those acres are split-estate lands, where a private entity owns the surface rights and the federal government owns the subsurface mineral rights.
“There is some kind of interest on the part of somebody. We don’t know why,” Stout said about the neighborhood acres. “I speculate it’s someone who’ll make a buck off of an oil company. Or an oil company itself.”
For now, local officials are scrambling for more information on the November sale.
Land nominations were due June 29, a notice about the sale was made public Sept. 7 and a 60-day window for protest closes Oct. 24 .
Granby Mayor Ted Wang, as well as Hot Sulphur Springs mayor pro-tem Susan Whitefeather list concerns about the steepness of the BLM terrain, its proximity to Hot Sulphur Springs, and its possible affects to watersheds, wildlife, the overall environment, recreation and agriculture.
“I would request that Grand County and citizens investigate this matter further and a forum be convened to discuss it,” Wang said.
County commissioners echoed Wang’s sentiments Tuesday.
Stout, along with Kremmling Field Office Assistant Manager Dennis Gale, pointed out that some lands were removed from the sale, such as those within view of the scenic byway along Highway 40 and some along the Colorado River.
As far as the parcels put up for sale, “There is no guarantee that if a parcel sold it would be developed,” Stout said, “and no guarantee that if someone went in to develop, they would find something. If they do find something, they make the determination if its commercially viable to develop the wells.”
Parcels offered for sale are nominated by oil and gas companies or members of the public. Many times, lands are nominated, but are never purchased.
It has not been proven whether oil and gas exists in eastern Grand County.
“The only real sure way to know is to drill a well and see what happens,” Stout said. Likeliness depends on geology and how the different strata lie.
“The rock there is untested,” he said.
Nominations are packaged every quarter and sent out to field offices where Bureau staff decides whether they should be offered or deferred on a quarterly sale; the next of which takes place Nov. 8.
“Our land use plans, or resource management plans, guide the leasing process,” Stout said.
What is or isn’t offered is “constrained by decisions made by the Kremmling (BLM field office ) Resource Management Plan,” he said. Leasing decisions range from “no leasing, to leasing with conditions, to leasing with particular constraints.”
In the case of the parcels in Grand County, lands are listed as subject to wildlife habitat protection, the preservation or threat of steep slopes, or paleontological concerns.
Before any drilling can occur, land use permits must be acquired in accordance with county, state and federal rules, and must comply with the National Environmental Protection Agency processes.
The first term of a lease is 10 years, and renewals are dependent on production.
Grand County parcels offered in the past are located north of Kremmling, in the Wolford and Troublesome areas. There is only one active well on private land by Waldon, Gale said.
Waldon’s McAllum field, which has been there since 1920, holds the only land with “high” gas and oil potential in Grand County. Moderate areas are next on the radar; otherwise, Grand County land has “low” potential, according to Gale.
In total, 102,500 acres have been nominated in both Jackson and Grand counties.
Production in Jackson County has waned, Gale said, with 50 active wells. Few have started up since 2000. Nevertheless, past production there keeps prospectors interested. And in Jackson, parcels are flat and the terrain is much less of a challenge for oil and gas developers compared to eastern Grand County.
“We’re pretty low on the scale in oil and gas development, compared to western regions like Craig and Glenwood Springs,” Stout said.
The Kremmling BLM office’s current land use plan, considered outdated, was written in 1984, then updated in 1991. Kremmling, as well as the Glenwood Springs office, have started the process of developing new resource management plans because of increased recreation demand, use, rapidly expanding communities and new policies.
The Bureau manages more than 8.3 million acres of public lands in Colorado, and oversees more than 27 million subsurface acres for mineral development in the state.
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