The U.S. Bureau of Land Management announced Friday that it will pay an oil and gas company $1.5 million to settle a lawsuit filed after the agency, under the Obama administration in 2016, cancelled 18 leases to drill in the Thompson Divide area near Carbondale.
The government’s settlement, which will be finalized when Houston-based SG Interests receives the funds, means the leases cancellations, affecting 21,000 acres, will remain in effect.
The BLM cancelled the leases after a years-long effort led by multiple community groups that formed the Thompson Divide Coalition. The group challenged the validity of the leases and succeeded in spurring the BLM to reevaluate them, prompting the cancellation decision. That decision left some leases west of the Thompson Divide intact.
SG Interests sued in 2017, claiming the cancellation violated its property rights.
Peter Hart, an attorney with Wilderness Workshop, which intervened in the lawsuit to defend the lease cancellations along with Pitkin County, the North Thompson Cattle Association, Earthjustice, Colorado Trout Unlimited and the town of Carbondale, said “it’s just nice to have closure” on the matter.
“This settlement means that important wildlife habitat, pristine roadless lands and public water supplies in the Thompson Divide will be protected for future generations,” Hart said in a press release. “SG’s leases posed a threat to all of those important values and today’s agreement is a victory for thousands of us who long fought to protect these public lands.”
He added later in a phone interview that he believes “the cancellation decision was appropriate and that a court would have upheld that decision.” Hart noted that SG Interests still has subleases on around 9,000 acres that could eventually be development underneath the Wolf Creek storage facility in the heart of the Thompson Divide — which are spent wells where natural gas is stored before being used to heat homes in the Roaring Fork Valley.
Robby Guinn, SG Interests vice president, told the Grand Junction Sentinel on Friday that the company is pleased with the settlement. The $1.5 million payment covers that majority of the costs his firm incurred related to permitting, surveying and other expenses in the time it held the leases, he told the paper.
Hart noted that the Thompson Divide Coalition in 2012 offered $2 million to at least four different drilling companies with leases in the area, in an attempt to buy back the leases. The offer encompassed many more leases than what the BLM ultimately cancelled. It is difficult to make an apples-to-apples comparison between that offer and what SG Interests agreed to Friday, he said.