SG Interests is moving forward with plans to develop its first gas well in the Thompson Divide area.
The oil and gas company from Houston filed an application for a permit to drill (APD) with the Bureau of Land Management (BLM) and the U.S. Forest Service on Oct. 17.
The lease entitles the company to one well on about 2,000 acres near the Sunlight Ski Area, and a mile and a half southeast of Fourmile Park, located in Garfield and Pitkin counties, said David Boyd, BLM spokesperson. He noted that the planned well would be in Garfield County, but that is subject to change.
The Thompson Divide includes 220,000 acres of federal land running from Carbondale to McClure Pass crossing Pitkin, Gunnison, Garfield, Mesa and Delta counties. Drillers have held leases on much of the land for the last decade, and local conservation groups have formed hoping to preserve the area. Colorado U.S. Sen. Michael Bennet is working on legislation that would prevent any future mineral leasing in the area, and would offer companies holding leases the ability to trade them back in or extinguish them.
The Fourmile Park area is a part of a chain of wild lands that connect the Grand Hogback to Battlement Mesa, Grand Mesa, and the Raggeds Wilderness Area. It serves as critical grazing land and wildlife habitat. The area is also a recreational destination for hunters in fall, and snowmobilers and cross-country skiers in winter.
The company purchased the lease in question from the Forest Service in 2003 and it expires in May unless SG Interests builds a well that produces an amount of oil or gas that can be sold before then, Boyd said. If successful, SG Interests will be able to drill in the lease area as long as there is gas being produced to make a profit.
BLM engineers and Forest Service staff have to make sure they have all the information the agencies require in order to allow for construction to begin, which could take some time, Boyd said.
Once the application is deemed complete by the organizations, the Forest Service will do an assessment of the area and determine if there are any environmental issues that the company needs to address before drilling, said David Francomb, a deputy district ranger for the Aspen Sopris Ranger District. An assessment includes receiving public feedback on the project and potentially coming up with alternatives for the drilling company, Francomb said.
The process could take anywhere from 10 to 24 months, Francomb said. After it’s complete drilling can begin, he said.
SG Interests can request that the BLM suspend its lease at any time, which would in effect put the lease’s expiration date on hold, Boyd said.
The company will do that if the assessment isn’t completed before May or if it looks like the process is going to take a long time, said Robbie Guinn, vice president of SG Interests.
Guinn said he doesn’t have a specific date targeted to begin construction, but regardless it won’t happen until after the winter season due to the weather, he said.
Typically it takes between 20 and 30 days to evaluate if there is oil or gas in the area once a well is built, Guinn said.
Peter Hart, attorney for the Carbondale-based environmental nonprofit Wilderness Workshop, said that the lease in question is a part of a group of leases that shouldn’t have been issued by the Forest Service originally, because the agency didn’t undertake adequate National Environmental Policy Act analysis and it conflicts with its own land management plan.
When asked whether the Wilderness Workshop will take legal action against the gas company in light the application, Hart said that he isn’t ruling anything out.
The Thompson Divide Coalition, a diverse group of local drilling opponents including ranchers, business owners and recreationists, expressed disappointment at the news that the application had been filed.
Jock Jacober, coalition board member and owner of Crystal River Meats, called out the gas company for waiting nine years to file an application for development.
“It seems somewhat odd that their renewed interest in the area coincides almost perfectly with the expiration of their leases,” he said.
Zane Kessler, executive director of the coalition, said he hopes that SG Interests will rethink its decision and come back to the table to negotiate.
In February, lease holders declined an offer from the coalition to buy back existing leases in the area for $2.5 million.
“As a coalition, we will continue to engage the industry in an effort to make leaseholders whole on their investment in the area,” Kessler said. “I’m confident we can reach a deal that recognizes the economic and environmental importance of existing uses on this relatively small area of backcountry.”