Two oil and gas companies responsible for major spills of hydraulic fracturing fluids and other drilling fluids into Garden Gulch on the Roan Plateau of Colorado’s Western Slope in 2008 have reached settlement agreements with the state for fines totaling $316,350.

Marathon Oil, which admitted to a release of more than 1.2 million gallons of fracking fluids into the Parachute Creek tributary, which ultimately empties into the Colorado River, has agreed to a fine of $143,350, according to the Colorado Oil and Gas Conservation Commission (COGCC).

Berry Petroleum, which spilled more than 100,000 gallons of drilling fluids into Garden Gulch, has agreed to a fine of $173,000. Berry failed to report initial spills in late 2007, but finally did self-report in early 2008.

The Garden Gulch spills, which formed a spectacular but tainted frozen icefall, are part of a state backlog of old enforcement cases. There will still be 12 cases more than a year old if the COGCC board approves the settlements at next week’s monthly hearing in Kiowa. Regulators have been making steady progress this year in dealing with old enforcement matters.

For more details on the settlement agreements, go to the COGCC website and click on Hearings on the menu bar; then click on the 2010/2011 Fiscal Year; then click on the April 28, 2011 date in the Applications Due column for the June 27 Hearing Date; then scroll down to the bottom of that page for the Berry and Marathon enforcement matters and click on Staff Recommendation for either case.

Filed in U.S. District Court by Earthjustice on behalf of the Natural Resources Defense Council, Sierra Club, Wilderness Workshop and the Wilderness Society, the lawsuit accuses the BLM of violating the National Environmental Policy Act.

Graham’s penstemon. By Susan Meyer

The groups charge that the BLM’s Colorado River Valley Field Office signed off on new wells in the last few years by saying the air pollution analysis was covered in a 2006 environmental impact statement (EIS) for the Roan Plateau. But many of the new wells, according to the lawsuit, are more than 10 miles from the Roan Plateau.

In a separate case impacting oil and gas drilling on Colorado’s Western Slope, a U.S. District Court judge late last week ruled that the U.S. Interior Department must reconsider its decision rejecting Endangered Species Act protection for a wildflower found only in parts of Colorado and Utah and threatened by oil and gas drilling, oil shale production, cattle grazing and off-road vehicle traffic.

The wildflower is the Graham’s penstemon, which was rejected for Endangered Species Act protection during the Bush administration. The court found that the Bush administration’s decision not to list the flower was “arbitrary and capricious.”

“The court’s decision makes it clear that FWS (U.S. Fish and Wildlife Service) cannot set aside science and avoid full consideration of the multiple threats that incrementally push a species closer to extinction,” said Meg Parish, attorney for the conservation groups.

Treasured by sportsmen, environmentalists and outdoor recreation enthusiasts, the Roan is a scenic plateau in gas-rich Garfield County that for years has been the subject of intense debate and litigation. Now the lawsuit challenging the record $114 million BLM lease sale in 2008 will be decided by a federal judge.

“After multiple rounds of settlement negotiations and diligent efforts by all parties, settlement negotiations are not at an impasse,” U.S. District Court Judge Kristen Mix wrote Wednesday. “Given that the issues in the case are fully briefed and ripe for resolution, the matter will be resolved in due course and in consideration of the District Judge’s overall docket.”

The 10 conservation groups – including the Colorado Environmental Coalition, Colorado Trout Unlimited, National Wildlife Federation, the Sierra Club, Colorado Mountain Club, Rock the Earth, Center for Native Ecosystems, the Wilderness Society, Wilderness Workshop and National Resources Defense Counsel – offered to continue negotiations but also promised to continue litigating to protect the Roan.

The groups, which contend the BLM did not fully analyze the potential impacts of drilling on the Roan, including considering a no-drilling alternative, called on the Obama administration to intervene and come up with a plan for drilling in the area that fully protects wildlife habitat.

“The drilling proposed for the Roan Plateau would devastate the elk, mule deer and native trout living there and deal a real blow to the region’s hunting and fishing economy,” Steve Torbit, Regional Executive Director of the National Wildlife Federation, said in a release. “As long as we protect wildlife habitat, western Colorado’s outdoors economy won’t have to suffer through the boom-and-bust cycles that the energy industry is infamous for.”

Four energy companies – Bill Barrett, Williams, OXY USA and Antero Resources – are named as defendant-intervenors in the case.

“The plaintiffs were holding the position the leases would be canceled,” Bill Barrett Vice President Duane Zavadil told the Denver Post. “We believed it was unlikely they would be canceled. The gap [in negotiations] remained too great.”

While humans like Denver Mayor John Hickenlooper and state Senate Minority Leader Josh Penry – current and former candidates for the Colorado governor’s office – locked horns over a recent reception for the new president of the Colorado Oil and Gas Association (COGA), a new report from the Colorado Wildlife Federation (CWF) points out the perils for the state’s distinct mega-fauna.

On the nearly 5 million acres of the gas-rich Piceance Basin, which stretchers over parts of Rio Blanco, Garfield, Moffat and Mesa counties, three huge mule deer herds range over nearly 920,000 acres and elk range on 1.3 million acres. Wildlife managers call the area “the deer factory.” Other species directly effected by the drilling include sage grouse and cutthroat trout.

More than 40 percent of the Piceance is leased for oil and gas production, including more than 54,000 acres of the Roan Plateau on the eastern edge of the Piceance in Garfield County that have yet to go into production. New state drilling regs compelling higher mitigation standards for wildlife habitat have become a political hot potato this election season.

“Fragmentation of northwest Colorado’s rich wildlife habitat, and the harms and demonstrable risks of such fragmentation, will continue as roads and infrastructure emerge on many of the leased parcels that have not been developed yet,” concluded the Wildlife Federation report entitled “Northwest Colorado’s Wildlife Habitat Today: Are We Losing Our Heritage?”

New Colorado Oil and Gas Association president Tisha Conoly Schuller pointed out that members of her lobby recognize the value of the habitat and have “donated funds with other Piceance companies to the [Colorado Division of Wildlife] for mule deer, sage grouse, and reclamation studies; conducted numerous sage grouse habitat improvement projects; and created drinking holes for wildlife to provide water sources which avoid crossing busy roads.”

But Conoly Schuller recently was left mitigating fallout from inviting the popular Democratic Hickenlooper to a COGA meeting that GOP gubernatorial frontrunner and former six-term Congressman Scott McInnis reportedly was unable to attend. She drew the ire of Penry, a former McInnis staffer who dropped out of the governor’s race and now backs his old boss.

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Trési Houpt

That board Monday, according to the Grand Junction Daily Sentinel, declined to regulate certain types of hydraulic fracturing of natural gas wells despite a county planning staff recommendation that the commissioners might want to consider it.

“The significant volume of water and chemicals may result in traffic, air and water quality impacts, as well as impacts to adjacent properties through noise, vibration and odors,” county planner Kathy Eastley wrote in a memo to the county commissioners, the Sentinel reports. Fracturing gas wells involves high-pressure injection of water, sand and chemicals to free up more gas.

Commissioner Mike Samson reportedly said the county should leave it up to the Colorado Oil and Gas Conservation Commission (COGCC) – the state board that regulates the industry. County Commissioner Trési Houpt, who also serves on the COGCC, said the industry needs to realize the county wants to weigh in on oil and gas issues as they relate to land use, but then said she was fine deferring to the state on the fracking issue.

Houpt, a Democrat and COGCC appointee of Gov. Bill Ritter, was mentioned later Monday at the annual Garfield County Democratic Party Martin Luther King Memorial Dinner as a possible candidate to run for the state House seat now in flux with former Democrat Kathleen Curry switching her party affiliation to Democrat. Curry said her decision in December was in part based on the contentious two-year debate over the new drilling regs.

Colorado Democratic Party Chair Pat Waak told the Glenwood Springs Post Independent “she is a candidate that we like” when asked about Houpt running for House District 61. Curry will have to run as a write-in candidate.

In other Garfield County energy news, the commissioners may seek an audience before the COGCC if the state agency approves drilling near Prather Springs, where a nearby landowner was sickened by chugging a glass of benzene-laced water from his well.

And drilling in the entire Roan Plateau is something the feds may want to reconsider under tougher new Bureau of Land Management standards announced by Interior Secretary Ken Salazar earlier this month, according to environmentalists suing to block some proposed drilling in the biologically diverse area of the state.

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It’s a story playing out now that asks questions about Bush Administration last-minute oil and gas giveaways, the fate of prized unique but not pristine or protected land across the country, the politics that landed the Roan gas leases in the hands of Bill Barret Corp and what they say about the policy priorities of gubernatorial candidate Josh Penry.

Video and excerpts after the jump.

Click on the photo to watch the Times piece on the battle for the Roan Plateau

New York Times:

A last-minute leasing push by the Bush administration put extensive federal lands in Utah and Colorado into the hands of oil and gas companies, including 36,000 acres of the Roan Plateau. The Obama administration has inherited the touchy question of what to do with those leases.

As one of his first decisions, Ken Salazar, the Coloradan who is President Obama’s interior secretary, scrapped a series of disputed leases in Utah. Last week, he announced that he would seek an investigation into other leases that granted favorable terms and low royalty rates for experimental projects to extract oil from shale.

But so far, Mr. Salazar has decided against canceling leases on the Roan, saying that he must uphold the buyers’ rights.

Sporting and environmental groups are suing the government in federal court, demanding that the leases be thrown out, and a preliminary ruling is expected this fall.

Opponents fear that development on top of the Roan Plateau will despoil it, leading to air and water pollution and disruption of wildlife.

In the Bush administration’s leasing program, those potential impacts were not taken fully into consideration, contends Michael Freeman, a lawyer with Earthjustice, which filed the suit calling for the cancellation of the Roan leases.

Mediation in the case is scheduled for Nov. 6. The groups suing the government are asking a judge to revoke the leases. That would not necessarily put the Roan off limits to future development, but it might require a fresh assessment of the environmental risks.

Colorado blogger Club Twitty adds to the discussion at Colorado Pols:

[T]he Bush administration was offering its final gifts to its oil and gas patrons, it leased offed every inch of public land in the Roan Plateau Planning Area for oil and gas drilling, in spite of have received over 15,000 protests on the lease sale (a record), and against overwhelming public and local community opposition.

Prior to the lease sale, parroting Greg Schnake, Sen. Penry predicted $2 billion in leasing revenue. The actual sale price was about 1/10th of that, for which Sen. Penry promptly blamed the local communities and conservationists that wanted these spectacular hunting, fishing, and recreation lands preserved for public, rather than industrial, use.

Ten sportsmen, hunting, and conservation groups filed suit claiming that the Bureau of Land Management had failed in its obligation to adequately analyze the impacts of its actions.

The BLM (under the Bush administration) considered the impacts of about 200 wells that it claimed was the reasonable amount of foreseeable development over the next twenty years.

Bill Barret Corporation, upon buying the leases from the venture capital firm Vantage Energy, immediately announced its intention to drill more than 3,000 wells in 20 years, more than 15X the numbers considered ‘reasonably foreseeable’ (upon which all its environmental analysis was based) by Bush’s BLM.

Having touted the BLM’s plan as “well-crafted” and “the strictest ever in terms of environmental protections” Sen. Penry and his oil and gas paymasters have been strangely silent since BBC’s intentions were made public.

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U.S. Rep. Diana DeGette, D-CO1

Environmental groups are pushing hard to finally get something done on the Colorado wilderness front in the current Congress. “We’ve got an enormous political opportunity having a strong conservation-minded Congress, at least more so than in quite some time,” Denver-based Environment Colorado advocate Matthew Garrington said.

DeGette remains a big backer in the House, but U.S. Rep. Jared Polis, whose 2nd Congressional District includes much of the critical White River National Forest, and U.S. Rep. John Salazar, whose 3rd Congressional District stretches west from the Continental Divide to the Utah border, are also viewed as key to the process.

“Obviously, we’ve had a lot of great conversations with Rep. Polis, and Rep. DeGette continues to be a stand-up supporter and leader on wilderness protection,” Garrington said. “And at this point I would say Rep. Salazar has really stood up on the San Juan plan, and we’re excited to see that leadership role on wilderness.”

But Garrington last week, in conjunction with a coalition of groups working as the Colorado Wilderness Network, submitted more than 13,700 signatures of support to the offices of U.S. Sens. Michael Bennet and Mark Udall of Colorado.

“I actually think it’s the Senate where our focus can do the most good in helping to protect wild lands everywhere,” Garrington said. “Obviously, Sens. Udall and Bennet represent the whole state of Colorado, and them weighing in to support wilderness protection can really be a game changer to help push wilderness forward.”

DeGette, purely for discussion purposes, recently floated her version of a new plan that would create 34 new wilderness areas and protect nearly 900,000 acres, according to the Grand Junction Daily Sentinel.

And Salazar has already introduced the San Juan Mountains Wilderness Act, which would protect 60,000 acres of public lands in San Miguel County, plus parts of Ouray and San Juan counties.

Colorado Wilderness Network supports the San Juan plan, as well as two other plans — Hidden Gems and Colorado’s Canyon Country Wilderness proposal — that would total nearly 1.9 million acres of new wilderness in Colorado.

Some, including new White River National Forest supervisor Scott Fitzwilliams, say the groups may be overreaching. The 2.3-million-acre White River, one of the most heavily utilized national forests in the nation for recreational purposes, has identified about 82,000 acres that would be appropriate to add to the approximate 750,000 acres already designated wilderness.

Environmental groups have proposed up to 400,000 new acres of wilderness in the White River, which includes the most popular ski resorts in the nation and is one of the most rafted, hiked, biked and hunted national forests in the nation. Some off-road vehicle enthusiasts, including mountain-biking groups, are rallying to fight the proposals in order to maintain access.

“Wilderness definitely is an economic driver in a lot of different areas,” Garrington said. “It does promote outdoor recreation. But that being said, we need to make sure that we sit down and have good conversations with all the different user groups and make sure that we come together on a proposal that makes sense for everybody and protects wilderness and wild lands in the state.”

Oil and gas industry representatives have also started saber-rattling over conflicts they see with existing leases in areas such as the Roan Plateau. According to The Aspen Times, the Hidden Gems proposal could impact 46 oil and gas leases totaling 36,584 acres. The White River’s Fitzwilliams said: “Existing oil and gas leases are essentially a binding contract — the lessor has the legal right to the oil and gas resources.”

But Sloan Shoemaker of Aspen’s Wilderness Workshop, told The Times many of those leases were granted after the Bush administration tossed out the Clinton roadless rule and may be deemed invalid once the Obama administration sorts through the legal tangle and establishes a new national roadless rule.

Shoemaker also told The Times that former U.S. Rep. Scott McInnis, now an oil and gas attorney running for governor in 2010, “politicized” the issue of designating public lands wilderness, and that there’s “some bias in the [Forest Service] against wilderness.”

DeGette’s plan, as currently floated, could conflict directly with Forest Service leases issued to Bill Barrett Corp., which has a 90 percent interest in about 40,000 acres of Roan leases, according to the Grand Junction Daily Sentinel.

Barrett spokesman Jim Felton said, “We would vigorously protect our property rights there.” But a DeGette spokesman said the congresswoman’s plan is a work and progress and some wilderness areas could coexist with oil and gas production on the Roan.

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Last week Salazar ruled that out in an interview with the Grand Junction Daily Sentinel, saying the leases sold in a record-setting auction last year that netted $114 million were too far along to withdraw.

But Michael Freeman, an attorney with Earthjustice, which represents a coalition of environmental groups challenging the leases, told the AP, “[Salazar] has the authority to recognize when his department has legal vulnerability.”

The environmental groups claim the BLM didn’t do enough analysis of the potential impacts of its proposed drilling plan, which calls for nearly 1,600 wells from nearly 200 pads over the next 20 years.

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Northside view of the Roan Plateau near Cow Creek . (Photo/aspidoscelis, Flickr)

A poster child for the issues surrounding the state’s latest natural-gas boom, the ecologically diverse Roan was divvied up in a record lease sale by the U.S. Bureau of Land Management (BLM) in August. A lawsuit filed against the BLM by Earthjustice on behalf of 10 conservation groups is still pending.

Last week, an official for Denver-based Vantage Energy told The Grand Junction Daily Sentinel his company is proceeding with exploration of the parcels totaling around 40,000 acres that it leased from the BLM for about $57 million.

“A short-term fluctuation in gas prices is not going to stop us from pursuing that project,” company spokesman Mark Rothenberg said. “It may cause some subtle changes in what we do in 2009 or 2010, but it’s not going to change our impression of the Roan Plateau as being a tremendous resource.”

But Earthjustice, a nonprofit public-interest law firm representing such groups at the Colorado Environmental Coalition, Trout Unlimited, the Colorado Mountain Club and the Wilderness Society, would like to see those leases -– a total of nearly 55,000 acres that brought in a record $114 million -– invalidated by a district judge before next summer.

“The Roan Plateau is another area where we’re hoping to see more attention paid to the hunters and the anglers and the local residents and all of the conservation groups,” Earthjustice staff attorney Ted Zukoski told Colorado Independent. “We hope to see the leases on the top [of the plateau] overturned.”

The lawsuit contends the BLM ignored the National Environmental Policy Act in proceeding with the lease sale, failing to give enough consideration to the air- and water-quality impacts drilling would have on an ecosystem that is prime habitat for large deer and elk populations, as well as native cutthroat trout.

The U.S. Department of the Interior in September rejected a slew of protests against the lease sale, including one by the Colorado Department of Natural Resources. Gov. Bill Ritter objected to the mass sale of all the available leases on the upper Roan Plateau, arguing that selling them piecemeal would net more for the state, which gets roughly half the revenues.

In October, U.S. District Judge Marcia Krieger declined to rule on a temporary injunction sought by environmental groups to halt drilling on the upper Roan. She said that since drilling wouldn’t begin until June at the earliest, she would have enough time to rule on the lawsuit itself.

In the meantime, the Colorado Oil and Gas Commission finalized its more environmentally stringent drilling regulations, which are still subject to approval by the state Legislature.

Some Republican lawmakers have said they will fight the new regs because they go too far at a time when the energy sector is being battered by the global economic downturn.

Meanwhile, Colorado conservationists are hoping for a helping hand from the incoming Obama administration when it comes to energy production on sensitive public lands in the state.

“Representing the state of Colorado is a blessing and a privilege is a blessing and a privilege, and I believe my work has just begun.” At the same time, Salazar said he has “already communicated” his desire to President-elect Obama that the new administration consider a Westerner to serve in the post.

Salazar also said that any new oil shale regulations issued by a lame-duck Bush administration “may be revisited,” The Pueblo Chieftain reports. It’s part of a new Obama administration’s approach to a “comprehensive energy program” that balances the “long-term sustainability” of communities where energy resources are developed, the Glenwood Springs Post-Independent reports.

“I think what you are going to see is a greater sensitivity from an Obama administration with respect to the protection of land and water, and I think a deference to what it is that state governors, state officials and local elected leaders want in respect to their lands,” Salazar said. “I have often said that Bush-Cheney ethic of development of our natural resources is ‘go everywhere and anywhere’ without any significant limitations. I don’t think that will be the case with an Obama administration.”

An Obama administration’s approach to oil shale development probably won’t change much right away, Salazar said, noting that any commercial development is eight or nine years away.

The future could be decided sooner for Colorado’s Roan Plateau, which is rich in natural gas and is a flashpoint of controversy between energy developers and environmental and local community interests, Salazar said. He dismissed talk about possible federal legislation for Roan Plateau, saying it was too early to speculate the day after the election. However, he believes drilling should continue only under guidelines proposed by Gov. Bill Ritter and the Colorado Division of Wildlife.

“They set forth a plan that balanced the development of the natural gas resource under the Roan at the same time protected the values for hunters and anglers and wildlife on the Roan,” Salazar said.

Those proposals alarm the oil and gas industry, according to a spokesman for a trade group contacted by the Glenwood Springs newspaper. Independent Petroleum Association of Mountain States Executive Director Marc Smith said the Democratic sweep will probably mean environmental interests will have the upper hand.

“Our concern is that could translate into less economic development for the West Slope, as a result of policies that would slow down economic growth by restricting access to natural gas development,” (Smith) said. “Independent oil and gas producers in the intermountain West share the same concern as all Westerners about getting our economy on a strong footing, and we think a part of that includes developing our domestic natural gas supplies so we have affordable energy.”