The Board of County Commissioners on Monday approved a memorandum of understanding (MOU) with Gunnison Energy LLC for activities on a parcel in the Iron Point Federal Exploratory Unit. Commissioners also approved a letter to the Bureau of Land Management supporting Gunnison Energy's bid to have the parcel, which was formerly leased, re-nominated and re-leased.
The parcel is located just north of the Elk Creek Mine. In a letter from Gunnison Energy the lease for the parcel was inadvertently allowed to expire in 2015 as a result of a clerical error. The lease was originally acquired in 2001 and the first well was drilled in the area in 2003.
In the letter, the company goes on to pledge that if it obtains rights to explore and develop the re-leased parcel it will treat the parcel as "no surface occupancy" and access the minerals there via directional drilling from adjacent lands. If the BLM decides to open competitive bidding on the re-nominated parcel, there is no guarantee Gunnison Energy will win the lease.
Commissioners also approved a letter to the BLM supporting Gunnison Energy's bid to re-nominate the parcel for a public leasing process. The commissioners' letter notes that exploration and development activity on the parcel in question began nearly 15 years ago, that Gunnison Energy has proven to be a responsible operator, and that development of the minerals there would provide for additional mineral revenues for Delta County.
North Fork residents were at Monday's meeting to object to both the MOU and the county's letter to the BLM.
Robin Smith of Paonia noted North Fork Valley residents are overwhelmingly opposed to oil and gas development.
Elena Goldstein of Crawford said the commissioners' consideration of the MOU was "surprising and sudden" and she advised the board to consult with legal counsel before proceeding.
Elaine Brett of Paonia said she was also surprised to see the MOU appear on the commissioners' business agenda for the day.
Brent Helleckson said people in the North Fork have concerns about three issues -- water quality, air quality and induced seismicity caused by injection wells. He asked who will pay for monitoring. He opposed the MOU until more questions are answered.
Natasha Leger of Paonia advised taking no action on the MOU. She complained about the lack of advance public notice of the commissioners' consideration of the document.
North Fork residents Bill Fritche and David Inouye expressed concerns of possible negative impacts to the lifestyle and environment there.
Before voting on the MOU, commissioners expressed their views on the matter.
Commissioner Mark Roeber said, "There is a lot of misunderstanding about what the MOU does." He explained that it is essentially a pledge by Gunnison Energy to develop the parcel under no surface occupancy restrictions if the BLM agrees to again put it up for lease for minerals development, and if Gunnison Energy becomes the new lessee.
Roeber noted that in his conversations with constituents he found that the offer of no surface occupancy was important.
The company's promise of no surface occupancy is a compromise, he said.
Roeber added, "I wish people would realize that oil and gas activity is going on."
Commissioners Don Suppes and Doug Atchley echoed Roeber's point that the no surface occupancy promise was significant in their thinking. Also, the surface is mostly privately owned.
Commissioners emphasized that the county's support is nominal at best, and that all decisions on re-nomination and re-leasing will be up to the BLM. If BLM agrees to allow the process to move forward, it will take and evaluate public comment.
Atchley added that the county had been approached in the matter through a letter to the county administrator. None of the commissioners has met or discussed the re-nomination with Gunnison Energy, he explained.
The county's letter to the BLM in support of Gunnison Energy's re-nomination states, "Delta County would ask that its support for the re-nomination of this parcel is considered during review of an application."
The letter was read aloud before being approved by commissioners.