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Roan lease estimate may be high

By Todd Hartman, Rocky Mountain News

Published December 18, 2007 at 12:05 a.m.

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Forecasts that natural gas drilling on public lands atop the Roan Plateau could net Colorado $1 billion in lease "bonus payments" within a year don't appear to stack up - at least in view of new figures released by the federal government.

A report by the Minerals Management Service of the Department of Interior shows that industry "bonus payments" on federal mineral leases across the country - including offshore leases - totaled $893 million in fiscal year 2007. Bonus payments are what winning bidders pay to buy a lease on public lands.

Skeptics say that raises the question of whether leases for gas drilling on 52,000 acres of the Roan in northwest Colorado could really generate total bonus payments in excess of those paid across the entire United States.

Americans for American Energy, a Golden-based advocacy group promoting domestic energy sources, has repeatedly used the $1 billion figure as part of its campaign to open up the region to drilling.

But others, including environmentalists and some elected officials, have for months questioned the $1 billion figure, calling it inflated and suggesting the actual figure likely would be far lower.

The MMS figures put more fuel on that fire.

"If the total (bonus payments) in the entire U.S. don't come up to a billion dollars in 2007, how is the Roan going to generate that by itself?" asked Pete Morton, an economist with the Wilderness Society. "AAE . . . got caught with their pants down, as far as I'm concerned."

MMS figures also show that Colorado's highest-ever share of bonus payments was $15.5 million in 2006.

Greg Schnacke, AAE president and CEO, said he stands behind the projection. An October report by the group arrived at the $1 billion figure in part by citing high per-acre payments by three oil companies - an average of about $46,000 per acre - in nearby areas. The group said it also relied on forecasts from energy companies that required confidentiality.

Multiplying $46,000 by the roughly 52,600 acres of public land available for drilling on the Roan totals $2.4 billion. That amount would be shared by the state and federal government, giving Colorado $1.2 billion in what AAE calls its high-end estimate.

Comments

  • December 18, 2007

    11:25 a.m.

    Suggest removal

    WEST_SLOPE writes:

    In it's brief existence, AAE merits recognition for its notable success on three fronts.

    First, AAE excels at alienating respected public officials across the Rocky Mountain region. Examples abound. Earlier this year Wyoming Governor Dave Freudenthal took the extraordinary step of issuing a public letter disavowing any ties to AAE or its agenda.

    Just this week, a bi-partisan group of ten mountain mayors who represent communities near Roan Plateau issued a letter to "express our growing dismay over the misrepresentations promoted by Americans for American Energy in service of your industry’s effort to open the public lands on the Roan Plateau for
    irresponsible energy development." AAE's patronizing 8-page response suggested that the Mayors are too dumb to understand the issue and should mind their own business if they don't toe AAE's line. Think that might backfire?

    Second, as the Mayors pointed out, AAE insults our armed forces by suggesting that drilling the heck out of the Roan has something to do with supporting the troops: "We object in the strongest terms possible your repeated attempts to equate any questioning of your industry’s agenda to abetting terrorists." Patriotic Americans across the political spectrum think we should have a country worth fighting for, with places to appreciate nature and wildlife on public lands.

    Third, AAE has broadened and deepened support for protecting Roan Plateau. It might be unintended, but Coloradoans should be thankful for their lack of credibility and inability to speak the English language without packing every sentence with misleading "talking points" or "fact" borrowed from discredited "push polls" or undisclosed "industry surveys."

    Colorado will be richer if we protect the Roan. Plain and simple.

  • December 18, 2007

    11:26 a.m.

    Suggest removal

    sunshinestate writes:

    The inflated figures served their purpose in promoting the tear up.
    So glad I live in Florida-with six million acres of public hunting lands, months long seasons.Such attacks on public lands in Florida would be fought back.Much of the Western 'outdoor community' deserves what you are getting with Roan....you consistently put the wrong people in office.You have the double hit of population and energy development.The $$ will be short lived.