Land of Valuable Resources
The BLM’s dual mandate of multiple use and sustained yield means that BLM-administered lands are available for the exploration and development of energy resources. A Resource Management Plan establishes which areas are open or closed to coal, oil, and gas leasing. The Mineral Leasing Act guides land use planning, leasing, bonding, operations, and reclamation associated with all development of federal coal, oil, and natural gas resources, as well as many other federal, state, and local laws and regulations.
The Mining Law of 1872 provides the legal framework for citizens to acquire mineral rights to a variety of hard rock minerals, including uranium and vanadium. Mining claimants are required to get BLM authorization before conducting any significant surface-disturbing activities. Miners are also required to get various permits from state and local governments in addition to putting in place financial guarantee bonds to insure completion of reclamation to meet various agency standards.
Many of the impacts associated with these activities can be significantly reduced or eliminated through site-specific stipulations identified and developed through the National Environmental Policy Act (NEPA) process. These measures include reclamation, the use of best management practices, and avoiding critical wildlife habitat.
Coal in the UFO
The UFO manages several active federal coal leases related to three coal mines located in the valley of the North Fork of the Gunnison River near Paonia, Colorado. Bowie No. 2, West Elk, and Elk Creek are actively producing longwall coal mines, with a total annual output of just under 15 million tons.
While each mining operation controls coal reserves with a mix of federal and fee and/or state coal, about 90% of local production is federal. As mining progresses, only federal coal will be available in the reserve base. While some federal coal leases have a 5% royalty due to difficult geologic and engineering conditions, most of the coal is mined at an 8% royalty. The resulting revenue to the federal treasury from coal production within the UFO approaches $25 million each year. Half of that revenue is returned to the state of Colorado.
For more information on active federal coal leases in southern Colorado, visit: UFO-Managed Federal Coal Leases
WHAT IS SPLIT ESTATE? |
In split estate situations, the surface and subsurface rights (such as the right to develop minerals) for a piece of land are owned by different parties. Mineral rights are considered dominant, meaning that they take precedence over other property rights, including those associated with surface ownership. However, the mineral owner must show due regard for the interests of the surface estate owner, and occupy only those portions of the surface that are reasonably necessary to develop the mineral estate. |
The BLM’s split estate policy applies only to situations where the surface rights are in private ownership and the rights to development of the mineral resources are publicly held and managed by the federal government. |
Current Oil and Gas Leases
According to Colorado State historic records, 116 gas wells have been drilled in the North Fork area on federally managed oil and gas leases, including split estate lands. The North Fork area is bordered by the following: Colorado State Highway 50 on the west, Colorado State Highway 133 on the south to Paonia Reservoir, then directly north and east to the UFO boundary. Of these wells, 15 are presently producing natural gas, 29 are shut-in but capable of production, and 72 have been drilled, abandoned and plugged.
On federally managed oil and gases leases in the rest of the UFO, including split estate lands, 71 gas wells have been drilled. Of these, two are presently producing natural gas, two are shut-in but capable of production, and 65 have been drilled, abandoned and plugged. Records show that an additional two wells have been proposed and are currently awaiting approval.
Natural Gas Resources
Natural gas typically occurs in sedimentary strata associated with the Mancos Shale, and within coal seams in rock formations of the Mesa Verde Group. Within the UFO, natural gas resources are found in the same general locations as coal resources, (north of U.S. Highway 133, across from the Delta County towns of Hotchkiss, Paonia and Bowie, in the Gunnison County town of Somerset, and in the area north of Paonia Reservoir). Coal and gas resources are also present in the west end of Montrose County, although they have been developed to a lesser extent.
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