House Natural Resources Subcommittee Discusses Energy Development and the Mancos Shale

American Association of Petroleum Geologists (AAPG)

The House Natural Resources Committee recently held a hearing to discuss energy development in the Mancos shale formation of the Piceance basin, which is a geographic area that spans Colorado and Utah and much of the resource is located on federal lands. The purpose of the hearing was to highlight the release of a recent U.S. Geological Survey (USGS) assessment which found that the Mancos shale has a large volume of recoverable energy resources. This includes more than 66 trillion cubic feet of natural gas, 74 million barrels of oil, and 45 million barrels of natural gas liquids, which is the second largest shale reserve in the U.S. behind the Marcellus shale.

In his opening statement, Chairman Lamborn (R-CO) noted that although the Subcommittee requested that an official from the Department of Interior’s Bureau of Land Management (BLM) testify to discuss how it is incorporating the USGS report’s finding in its environmental impact statement for the Mancos shale, the BLM opted not to send a witness. Congressman Polis (D-CO) remarked that because DOI had sent a witness from USGS that this should be sufficient representation. Polis also expressed his opposition to developing energy in Piceance basin because there is already too much natural gas development in the U.S.

Walter Guidroz, USGS’s coordinator for energy programs, said that his agency decided to update the resource assessment for the Mancos shale because the last assessment, which was completed in 2003, was done before the hydraulic fracturing boom. Since that time two thousand wells have been drilled in the Piceance basin.

Robert Guinn, testifying on behalf of SG Interests discussed the obstacles that his company has encountered with energy development on federal lands managed by the BLM. Specifically, BLM and the U.S. Forest Service are trying to cancel the leases they currently hold in the Piceance basin in order to prevent energy development in the White River National Forest and even more specifically, the Thompson divide. This proposed cancellation comes after several years of delay. Mr. Guinn called on BLM to reconsider these cancellations, especially due to the new findings in the USGS resource assessment as well as the fact that SG interests is in the process of working with the Colorado Congressional delegation and other stakeholders to craft an agreement for responsible development.

Robert Downey, testifying on behalf of Gunnison Energy, a company that is currently producing natural gas in the Piceance basin, also expressed deep concern with the cancellation of federal leases in the Thompson divide area. Although he is very understanding of the concerns with protecting the scenic value of the area, he agreed with Mr. Guinn that energy could be developed in an environmentally responsible manner.

William Fales, a rancher on Colorado’s west slope, said that although he understands that the USGS resource assessment is welcome news for the oil and gas industry and for local communities adversely impacted by the slump in oil prices, that he strongly opposes energy development in the White River National Forest and the Thompson divide. He said that this development would adversely impact hunting, fishing, ranching, and recreation. He also noted that the BLM leases in the Thompson divide were issued without adequate environmental review or notice to local stakeholders.

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