US BLM says controversial Colorado lease sale generates $4.8 mil

Washington (Platts)--11Aug2006

The US Bureau of Land Management generated more than $4.8 million from an
oil and natural gas lease sale in Colorado Thursday that drew protests for
because it included Forest Service lands where road construction was banned by
the Clinton administration.

BLM sold 118 parcels totaling 139,555 acres throughout the state, of the
158 parcels totaling 169,194 acres offered. The high bid offered in Thursday's
sale on a per-acre basis was $850 per acre, placed by Contex Energy of Denver,
for a parcel in Garfield County. The high overall bid of $395,000 was offered
by SG Interests VII of Houston, for a 1,975-acre parcel in Delta County.

Of the parcels sold, 17 were located in roadless areas in Grand Mesa
Uncompahgre, Gunnison and Manti LaSalle national forests. Their inclusion in
the auction was formally by protested by environmental groups, Senator Ken
Salazar, Democrat-Colorado, Representative John Salazar,
Democrat-Colorado, and officials with Gunnison County.

A BLM spokeswoman said the agency will not convey the leases until the
protests are resolved. When asked whether BLM had made a determination that
leasing in roadless areas was acceptable, she said the agency was merely
following the Forest Service's recommendations. A Forest Service official in
Colorado did not return a call for comment.

The Department of Agriculture, which oversees the forest agency, last
year proposed scrapping the Clinton rule and replacing with a process allowing
states to determine whether development of roadless areas would be permitted.

Last week a task force in Colorado recommended that USDA block
construction of roads in these areas that would be used for oil and gas
drilling. Environmentalists were disappointed, however, that the task
force did not call for drilling to be prohibited in roadless areas while USDA
considers the proposal.

--Matt Spangler, matt_spangler@platts.com

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