BLM approves leases in watersheds, then suspends drilling for one year

Gargi Chakrabarty, Rocky Mountain News

Published August 4, 2006 at midnight

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The federal Bureau of Land Management on Thursday allowed oil and gas drilling in the watersheds of Palisade and Grand Junction with a one-year suspension, sidestepping objections of officials and activists.

After six months of reviews, the BLM said it would issue leases covering about 13,000 acres in the watershed areas - parcels of land that it had auctioned and sold on Feb. 9.

But the lessee, Genesis Oil & Gas, will have to wait a year before it can drill in those areas. The company will work with Palisade and Grand Junction to agree on a drilling and exploration plan.

"This is unprecedented, issuing a lease and then suspending (drilling) in it," BLM spokeswoman Mel Lloyd said. "We have taken more time than usual to ensure that we were making a sound decision."

BLM's decision includes rules to protect the environment, such as a "no surface occupancy" stipulation on 960 acres of the Palisade watershed, which means Genesis Oil & Gas cannot drill on the surface to extract natural gas from underneath those acres. Rather, it would have to directionally drill from the periphery to reach those gas reserves.

Other rules include no drilling activity on steep slopes or during certain times of the year in particular areas, especially winter, when deer and elk use those areas as habitats.

Lloyd said much of the BLM's decision was in response to U.S. Sen. Ken Salazar's request for a "reasonable and responsible approach" to resolving the protests, although the lawmaker himself expressed disappointment.

"This is not what I asked of the BLM," Salazar said. "As this process goes forward, I will continue to work with Palisade and Grand Junction to protect their watersheds and monitor closely the actions of the BLM and the lessee."

At the Feb. 9 auction, the BLM sold 134,582 acres for a total of $11.8 million. Lloyd said the BLM has settled most objections and that Thursday's decision resolves the last of the 110,000 protested acres.

"None of the stipulations proposed by BLM can guarantee that oil and gas development in the watershed will not contaminate ground water, streams or springs," said Western Colorado Congress' Bill Grant, who lives in Grand Junction. "Only exempting these parcels from leasing can assure protection of drinking water sources."

The town of Palisade had appealed to Salazar, apart from lodging a protest with the BLM, to protect its watershed.

Palisade Mayor Doug Edwards said he was "disappointed the BLM issued those leases. My objection all along has been that it's very risky to drill in municipal watersheds."

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