Roan Plateau Job Creation Stymied by Environmental Lawsuit

February 15, 2012


Satellite photo of the Roan Plateau

DENVER, CO – Remember the Roan Plateau? That’s the stretch of mineral-rich terrain near Rifle that was supposed to deliver an economic bonanza to Western Colorado after its federal leases were auctioned for a record $113.9 million in 2008.

Nearly four years later, many Western Slope counties are still struggling with double-digit unemployment. Meanwhile, the Roan is no closer to producing the estimated 1,000 jobs expected to accompany oil and natural gas development than it was when the leases were first purchased.

The Roan Plateau can be seen as a case study in the politics of public-land use, where a project delayed can often turn into a project denied. The issue resurfaced in January when State Rep. Laura Bradford (R-Collbran) and state Rep. Ray Scott (R-Grand Junction) blasted Gov. John Hickenlooper in The Denver Post for the failing to intervene on behalf of the Roan’s development.

“Even more troubling is that the resources previously set aside as the Naval Oil Shale Reserve, now known as the Roan Plateau, remain untapped and mired in a federal bureaucratic black hole,” said the Republican lawmakers, who represent the Western Slope.

But the plateau remains undeveloped for the usual reason, namely, an environmental lawsuit.

Earthjustice, the Sierra Club’s former legal arm, filed a lawsuit on behalf of a coalition of environmental groups seeking to cancel the leases shortly after the August 2008 sale was final. The lawsuit went before a court mediator, but the parties failed to reach an agreement.

U.S. District Court Judge Marcia Krieger is slated to hear oral argument in the case May 22. The lawsuit argues that the Bureau of Land Management’s environmental analysis fails to adequately address the impact of drilling hundreds of wells on the plateau, while the agency insists that its science and safeguards are sound.

BLM spokesman David Boyd, who can see the plateau from his office in Glenwood Springs, said the May hearing will focus on air-quality issues, as well as the agency’s decision to measure environmental impact for 20 years and not longer.

Don’t expect a quick post-hearing resolution. “Certainly a big decision like this can get tied up in court for years,” said Mr. Boyd.

Earthjustice attorney Michael Freeman argues that the lawsuit hasn’t put a dent in the local economy. The collapse of natural-gas prices makes it doubtful that leaseholders would have chosen to invest in rig activity, he said.

“Protecting the Roan isn’t going to cost any jobs and turning the Roan into an industrial zone isn’t going to create any jobs,” said Mr. Freeman.

“The price of natural gas is low enough that companies have slowed down drilling considerably, especially in Western Colorado,” Freeman added. “If companies are looking to develop natural gas, there’s millions of acres they can use in Colorado without touching the Roan Plateau.”

But the Roan isn’t just any old oil field, say developers. The plateau, including the 54,631 acres leased by the BLM, is believed to be home to vast deposits of natural gas.

“Those reserves are known to be bountiful,” said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association.

He said price is only one of a host of factors in an operator’s decision to drill for natural gas, including the developer’s ability to hedge the price, the presence of natural-gas liquids such as propane and condensate, and its pipeline and federal-unit drilling obligations.

“It’s easy to take a very complex industry and oversimplify it and demagogue it,” said Ludlam.

Even if the lawsuit ultimately fails, however, some of the damage has been done. The BLM agreed to suspend the leases until the litigation is finished in order to give them the full 10 years, but the communities waiting for a resolution are also taking a hit.

“This dragging on and these litigation delays create tremendous angst and uncertainty among local governments who depend on economic activity for their livelihood,” said Ludlam.

If the lawsuit is successful, that could be a headache for the governor. The federal government has already cut a check to Colorado for its share of the lease sale to the tune of more than $50 million. That royalty money has been spent, but if the sale falls through, the BLM could decide it wants to be reimbursed.

“I don’t think the feds are going to absorb that if they have to refund the leases,” said Mr. Ludlam.


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