Colorado Politics

Sgamma: Why natural gas development is falling short on the Western Slope

For the last several years, the Piceance Basin on Colorado’s Western Slope has lagged other oil and natural gas producing areas of the state and country. True, the price of natural gas has been in the doldrums for quite some time. But in other plays across the country, such as the Bakken in North Dakota and the Marcellus in Pennsylvania and Ohio, production has increased dramatically under the same low commodity prices, so something else must be going on. Why has the West Slope lagged behind?

Unlike the Marcellus or Bakken, the Western Slope is predominated by federal lands. Whereas a company can satisfy state environmental and regulatory permitting requirements and begin drilling in about a year and a half from initial planning to the first turn of the drill bit, on federal lands the obstacles can be prohibitive, and there is no certainty about when or even if development can occur. On top of multiple layers of regulatory burden on federal lands, federal land management agencies like the Bureau of Land Management and the U.S. Forest Service have added many others in recent years. Couple that with political leadership in Washington that’s hostile to oil and natural gas development, and it’s easy to see why companies avoid the Piceance and invest in other areas without federal lands. Because of federal obstacles, the break-even price to operate in the Piceance is high, and therefore companies go elsewhere to create jobs and economic opportunity.

Regardless, there remain many intrepid operators trying to develop on the Western Slope. They have been attempting for years to develop natural gas from the Mancos Shale formation, which they believe has great potential. But many have been stymied. There are examples of companies whose projects have been blocked for many years, with one small nine-well project approaching the twenty-year mark. Other obstacles include BLM and USFS moving forward with canceling leases they granted over a decade ago, and denying access to Mancos Shale development. Environmental groups advocating for these delays have used bogus reports claiming the natural gas isn’t worth developing. Even Interior Department leaders have excused the roadblocks claiming that more prolific shale plays are found elsewhere in the country on non-federal lands.

But they can’t hide behind that excuse any more. The U.S. Geological Survey just released a report showing the Mancos Shale in the Piceance holds 66 trillion cubic feet of natural gas, second only to USGS’s assessment for the Marcellus Shale. That’s equivalent to roughly 44 years of Colorado’s entire gas production. Natural gas companies can responsibly produce that resource while protecting the air, water, land and wildlife. Advanced drilling techniques have reduced footprint on the land by as much as 70 percent. We can create those jobs and grow the economy of the West Slope and Colorado by tapping into this national resource, provided the federal government listens to itself and enables development to move forward.

Western Energy Alliance vice president of government and public affairs Kathleen Sgamma
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