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Drillers decry Roan rules

Plan to allow gas wells on plateau is financially unattractive, group says

Joanne Kelley, Rocky Mountain News

Published September 8, 2006 at midnight

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A long-awaited federal decision that would open the Roan Plateau to natural gas drilling includes compromises that make the land "much less economically attractive," an industry group said Thursday.

The Bureau of Land Management's plan to open up the Western Slope site includes measures that would prolong the effective drilling period for decades, according to the Colorado Oil and Gas Association. And that timing would reduce the financial incentives for investing in the gas-rich area near Rifle.

"It would make sense to shorten the time frame for drilling, not drag it out," said Greg Schnacke, executive vice president of the Colorado Oil and Gas Association.

Schnacke said the industry generally supports environmental protections in the compromise plan. But he said restrictions on how drilling should be conducted reduce "the return on investment in lease bonuses, due to the time value of money."

While drilling activity has soared in Garfield County, interest in the scenic Roan Plateau remains especially keen because of estimates the area could produce enough natural gas to heat many of the state's homes for decades.

Still, some companies want time to read the fine print in a proposal that has been in the works for years.

"For us, it just really comes down to looking at the leasing of this . . . vs. other opportunities," said Doug Hock, a spokesman for Encana Oil and Gas USA. "It comes down to a decision of looking at opportunities based on economics."

Some residents around the potential drilling site worry about the boom-and-bust cycles of the energy industry. They note that recreation-related industries such as hunting have played a role in the stability of the area.

"Tourists have no interest in wandering up roads that lead to gas wells and compressor stations, or hanging around where there's truck traffic and foul odors," said Duke Cox, president of the Grand Valley Citizens Alliance.

Cox, a home builder, said demand for housing has surged as oil and gas industry employees flock to the area. But the boom has also created other issues, including a shortage of labor and materials for small businesses not directly involved in the energy sector.

"There's a short-term boom in the housing cycle, but it's hard for us to capitalize on it because we can't find help," Cox said.

Garfield County's tax coffers also have benefited from all the oil and gas activity.

"We have an economy that's already heated and already has no-vacancy signs out," said Randy Russell, senior long-range planner for the county. "Whether the Roan Plateau top gets drilled . . . is not tremendously consequential in the overall (economic) impact here."

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