Comments sought on analysis of proposed energy development

Kelly Sloan
Kelly Sloan

Kelly Sloan, The Business Times

Public comments will be accepted until April 16 on a draft environmental impact statement for a proposed natural gas drilling project in the North Fork Valley of Delta County.

While the project has been proposed for mostly privately owned property, the federal government controls about 65 percent of the underground mineral resources as well as a small portion of land.

The U.S. Bureau of Land Management conducted the environmental impact statement (EIS) for the Bull Mountain Unit Master Development Plan. The 150-well drilling project has been proposed for an area about 30 miles northeast of Paonia. The plan calls for 146 natural gas wells and four water disposal wells on up to 36 well pads, along with related roads, pipelines and other construction. The unit consists of nearly 19,700 acres, 98 percent of which is privately owned surface land. The mineral rights beneath the unit are under a mix of private and federal government ownership.

SG Interests, a privately owned oil and natural gas exploration and production company located in Houston, has proposed the development. The company holds oil and gas assets in the Piceance Basin in Western Colorado as well as in the San Juan Basin in New Mexico and in Southeast Texas.

The EIS follows a public scoping period that took place in 2009, after which the BLM determined an analysis was needed to address potential concerns over air quality, water issues and habitat management.

Supporters of the development point to both the potential economic benefits and issues surrounding private property rights. Backers of the plan say the development will create jobs in a region hit hard by unemployment. For February, the most recent month for which estimates are available, the monthly seasonally unadjusted jobless rate stood at 7.1 percent in Delta County.

According to the EIS, both the median household and per capita incomes were lower in the Delta and Gunnison counties than the state average. The EIS also states the average annual wages for natural resource extraction jobs are 116 percent higher than the average annual wage in Gunnison County and 
63 percent higher than the average annual wage in Delta County.

It’s estimated that Alternative B, which constitutes the development plan as proposed, would result in a direct economic contribution to the region of more than $113 million.

The development also could bolster local and state tax revenues, It’s estimated that implementing the plan as proposed could raise $313 million in severance taxes to the state and as much as $973 million in federal mineral royalties, about half of which goes to the state.

The draft EIS includes an option to take no action as well as two alternatives prescribing action. Alternative B would implement the master development Plan as presented by SG Interests. Another alternative would impose restrictions on surface occupancy and use and additional limits on when activity could be permitted.

Supporters of the development have argued it’s inappropriate for a federal agency to impose such restrictions on private property. Under the proposal, all of the development would take place on private land subject to state and local — rather than federal — regulations. SG Interests has also entered into surface use agreements with the individual land owners, and some have expressed concern federal restrictions that exceed the provisions of the surface use agreements constitute violations of private property rights.

The U.S. Bureau of Land Management will accept until April 16 public comments on a draft environmental impact statement prepared for the Bull Mountain Unit Master Development Plan. Comments can be mailed to: Bureau of Land Management, Uncompahgre Field Office, attention Gina Jones, 2465 S. Townsend Ave., Montrose, CO, 81401. Comments also can be e-mailed to or faxed to (970) 240-5368. The EIS and related documents are available online at the Web site at