Fight over Thompson Divide oil and gas leases heats up with Pitkin Co. lawsuit

Posted at 2:35 PM, Apr 21, 2017

PITKIN COUNTY, Colo. – A fight over oil and gas leases in the Thompson Divide area continues to heat up, as Pitkin County and an environmental nonprofit filed suit Wednesday to be sure that a November decision by the feds to cancel 25 leases in the area is upheld under the Trump administration.

The lawsuit, filed in U.S. District Court of Colorado by the Pitkin Board of County Commissioners and Carbondale nonprofit Wilderness Workshop, claims that the Bureau of Land Management and U.S. Department of the Interior broke their own rules when they extended oil and gas leases for Houston-based SG Interests in the years following 2013.

The leases had been set to expire in 2013, but were extended that year, then again in 2014 and 2016. Both Pitkin County and Wilderness Workshop appealed the extensions to the Interior Department, but the appeals were denied on the basis that “extending the lives of the leases did not itself cause plaintiffs any injury,” according to the suit.

Several environmental groups in 2015 tried to offer a deal to SG Interests and another company that held leases in the White River National Forest to exchange the leased land for other leases in the state.

But despite losing appeals on the extensions, Pitkin County and the numerous environmental organizations saw a win last November, when Interior Secretary Sally Jewell announced that the 25 leases in the Thompson Divide area leased by SG Interests and another company, Ursa Piceance, were being canceled.

BLM had recommended canceling the leases in July.

At the time, then-secretary Jewell said she believed the decision would hold up under the Trump administration, despite ongoing claims by the energy industry that the government didn’t hold up its end of what the industry says were valid leases.

But in February, SG Interests sued Jewell and others involved in the decision to cancel the leases, arguing that they had done enough speculation and work at the sites that they should be considered active – something that was necessary under the terms of the leases’ initial agreement.

In its suit, SG Interests argued that political interests in Colorado had led to the decision to cancel the leases. Ursa Piceance has yet to challenge the decision to cancel its seven leases in the area.

The suit filed by the county and Wilderness Workshop disputes many of the claims made by SG Interests in its lawsuit, saying the company waited until the last minute to fill drilling permit applications for only one-third of its 18 leases – claiming it was a last-ditch effort to get the leases extended.

The county and group say the lease extensions and denial of appeals violated the Mineral Leasing Act’s expiration guidelines, as well as the National Environment Protection Act and BLM rules.

“BLM’s decision to suspend the leases without complying with the Mineral Leasing Act was inconsistent with the law and arbitrary and capricious,” the suit says.

The county and environmental group say that the Thompson Divide area is an environmental area that needs to be protected from oil and gas development because of its wide-ranging influence on environmental quality in the area.

It covers approximately 220,000 acres of federal land west of Aspen that includes much of western Pitkin County and portions of Delta, Garfield, Gunnison and Mesa counties.

County attorney John Ely told the Aspen Times that the suit was an “insurance policy” against the Trump administration, which has signaled that it will open up oil and gas exploration.

He speculated that the suit would be joined with SG Interests’ February suit.

The Wednesday suit asks a judge to find that BLM violated law when it extended SG’s leases – the exact opposite of what SG seeks in its suit.

If the extensions aren’t found to have violated law, the Pitkin County suit asks the court to overturn the decisions denying their appeals of the extensions.

The suit also asks for costs and attorneys’ fees.

A spokeswoman with BLM said the agency does not comment on pending litigation. An Interior Department spokesperson referred questions to the U.S. Department of Justice, which has so far not respond to requests for comment.

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