WSCOGA and CHC face off over North Fork drilling plan

Even though drilling has slowed way down on the West Slope over the past two years, drilling has increased ever-so-slightly in Garfield, Rio Blanco and Mesa counties. There were nine rigs operating in the Piceance Basin as of June, compared to three last year. So while that’s triple last year’s rig count, it’s far from boom time. However local environmental groups are tracking the progress of several more planned projects and expansions waiting in the wings for future oil & gas development. One project in particular has Delta County residents concerned about the impacts on their local economy.

Gunnison Energy, LLC (GELLC) is proposing the North Fork Mancos Master Development Plan, a project that will bring 35 new gas wells from four new well pads and one existing well pad, as well as construction of access roads and pipelines. The area encompasses 34,906 acres of public and private lands in Delta and Gunnison counties and is located 12 miles north of Paonia. The NFMMDP project is still undergoing scoping comments at the BLM, and will then have to undergo either an Environmental Assessment, or Environmental Impact Statement, whichever the BLM requires.

North Fork Valley residents have worked hard over the past 20 years to transition the local economy away from coal, and oil & gas development toward sustainable agriculture, tourism, recreation, art and music, and renewable energy and they want to protect their brand of agritourism. However Delta County commissioners are in favor of the North Fork drilling plan citing the usual spin about economic benefits from job creation and tax revenues.

This week, the environmental group Citizens for a Healthy Community (CHC) presented Delta County commissioners with the report Economic Impact Of Natural Gas Development On Delta County. The 16-page report outlines the financial benefit of the North Fork Mancos Master Development Plan (NFMMDP) to Delta County, and compares it to the project’s potential impact on other, existing sources of revenue for the county.

Authored by CHC’s associate program director Andrew Forkes-Gudmundson, the report points out that only three of the 35 wells would be located in Delta County. Therefore when the costs for road repair, lost residential property tax revenue, and lost sales tax from outdoor recreation and agritourism income are subtracted from the estimated property and severance tax revenues, the NFMMDP would actually result in a net economic loss to the county

The report concludes:

The three proposed wells in Delta County from the NFMMDP project are estimated to generate between $307,000-$367,000 per year in oil and gas property and severance tax revenue to Delta County over the 30-year life of the wells. However, this same project has the potential to result in a loss of $24,275 in agritourism sales tax revenue, $187,460 in outdoor recreation sales tax revenue, and a loss of $598,275 in property tax revenues for a net annual loss of $810,000 to the County or $24.3 million over the 30-year life of the proposed project …

… The North Fork Valley is an economic engine for Delta County. Our research suggests that the County Commissioners should rethink the true, long-term value of oil and gas development, and in particular the NFMMDP, on the future of Delta County. This study is a first step in better understanding the costs and benefits associated with oil and gas development proposals. We recommend that further research be undertaken by the County and other stakeholders that extends to commercial property taxes, and other aspects of outdoor recreation such as hiking, biking, cross-country skiing, snowmobiling, and more to improve the cost/benefit analysis of oil and gas proposals in the North Fork Valley.

Forkes-Gudmundson told the Daily Sentinel that the North Fork Valley is building a reputation for organic farming, and it would be a hard sell for an organic farmer to persuade people to visit his farm “if five miles upstream there’s an industrial-scale fracking operation potentially pumping chemicals into his watershed.”

Natasha Leger, interim executive director of Citizens for a Healthy Community, said the report validates what North Fork Valley residents have known for years about the economic value in transitioning from extractive industries to agritourism, recreation and sustainable agriculture.

“Now we actually have a quantitative report to back up what people have been saying for years,” Leger said.

Not surprisingly Brad Robinson, president of Gunnison Energy responded to the report prior to the Delta BOCC meeting saying the company has drilled wells in Delta and Gunnison counties for 14 years.

“During that time, none of the exaggerated impacts or conflicts that have been predicted by those who fundamentally oppose any fossil fuel development have occurred. We do not expect any different outcome from the wells we are currently planning than from the wells which we drilled over the last 14 years.”

Robinson said the report “fails to account for many of the economic benefits of gas exploration and production,” and ignores the fact that 50 percent of the federal royalties from gas production are returned to the state and then distributed locally to schools and communities.

He added that it “also ignores the benefit of payments to local landowners and the benefits to companies and their employees who provide services to support our operations.”

Although when it came to facing off with local residents at the county commissioners meeting last Monday, Robinson sent in the industry’s point man David Ludlam, executive director of the West Slope Colorado Oil and Gas Association (WSCOGA). Prior to the meeting Ludlam described the CHC report as a “myopic, self-serving analysis.”

On Monday, Ludlam delivered an 11-page rebuttal to Delta County commissioners in response to the report’s presentation by Citizens for a Healthy Community. For a bulleted list of industry talking points read the Daily Sentinel article — Industry: Study disregards many drilling benefits.

Ludlam, who likes to refer to local citizens who seek to protect their health, welfare, property values, and the environment as “activists” wrote:

“When assessing economic and socio-economic contributions from energy production, the (a)ctivists simply cherry-picked data to serve as a straw man for ideological aims. We believe a better approach is to take a more holistic and comprehensive look at the myriad social benefits from natural gas production on federal lands.”

But he didn’t offer any specifics.

Natasha Leger, CHC interim director told the Daily Sentinel: “Ludlam’s critique in some cases talks about the contributions the industry makes in general terms, without breaking things down at a Delta County level for purposes of cost-benefit analysis.”

She said her group’s hope is to have Delta County commission its own independent study to look at some of the areas her group didn’t address, such as the impacts of oil and gas development on property values of commercial property and vacant lands.

“With these (drilling) projects, from our perspective we are being asked to accept environmental and health risks and the justification is the economic benefits that come from these proposals,” Leger said.

She said an open and transparent study is needed to determine just what those benefits are, and so the community can understand what the impacts are.

In response, Delta Commissioner Mark Roeber seemed to dismiss the need for a study.

Delta Commissioner Mark Roeber on Tuesday didn’t rule out the possibility of the county commissioning such a study. But he said the county’s assessor and oil and gas liaison do a lot of that kind of work already, and the results are available to the public. And the county also has to consider its cash-strapped budget situation, he said.

“It’s kind of hard to say we’re going to spend money on a study that may not get us any results,” he said.

He said he thinks there are some questionable numbers in the citizen group’s report about oil and gas impacts on things such as tourism.

“There’s no real good data on what kind of visitation we have now, what kind of spending is going on now, so it’s kind of hard to just take national averages and extrapolate that way,” he said.

He doesn’t think the county needs to choose between oil and gas development and other forms of economic activity in the county.

“The resource is there. I think we can figure out how to (develop) it and keep everybody happy. It shouldn’t have to be a totally either/or (decision),” Roeber said.

He said he thinks the county always has stressed that there’s room for everything when it comes to public land uses, including things such as oil and gas drilling, coal mining and livestock grazing.

“It takes true collaboration to work it all out. We’re committed to that,” he said.


Read the CHC report: Economic Impact Of Natural Gas Development On Delta County


Daily Sentinel: Industry: Study disregards many drilling benefits

Daily SentinelReport: Drilling could cost North Fork

BLM documents: North Fork Mancos Master Development Plan

High Country Conservation 35-Well Master Development Proposal for Gunnison County Public Lands

Daily SentinelLocal drilling activity triples; firms eye frack crew shortage

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