Energy by Design: Agencies hope to get ahead of Larimer County oil rush

Government agencies are trying to put all their ducks — and other wildlife — in a row before oil drilling reaches some 69,000 acres of northern Larimer County open space.

“What we’re hoping is, if and when development occurs on those properties, it occurs with the least amount of disruption,” said Megan Kram, a public lands program manager with the Nature Conservancy in Boulder. “We’ve brought together local experts to determine the important conservation values on these properties.”

The Nature Conservancy has a contract for as much as $100,000 for the effort, known as Energy by Design, from the Colorado State Land Board. The Land Board owns 4 million acres of subsurface mineral rights statewide and about one quarter of the mineral rights for the three properties under study: Soapstone Prairie Natural Area, Red Mountain Open Space and Meadow Springs Ranch, all north and west of Wellington.

Both Red Mountain and Soapstone contain extensive multiuse trails, about 45 miles in all, while Meadow Springs is largely used for grazing and by the city of Fort Collins for application of bio-solids from its sewage treatment.

The new study process will identify important conservation features in those areas, such as important habitat and archeological features and wildlife species, that would be most severely impacted by exploration and development.

Recent success in drilling in the Niobrara and Codell shale and limestone formations in what is known as the Wattenberg Field is fueling widespread interest in oil development in northeastern Colorado, including the Pawnee National Grasslands.

Relatively new technologies are used in exploiting the formations, including horizontal drilling and hydraulic fracturing or fracking. In fracking, large volumes of water and chemicals are pumped through the reservoir strata, creating fissures that allow oil or natural gas to flow to wells. The practice has led to claims of groundwater contamination, and the state now requires drilling companies to disclose the ingredients in their fracking fluids.

“We didn’t really see any interest in these properties until two years ago,” said Melissa Yoder, external affairs coordinator for the Land Board. “But now there is drilling in adjacent areas … and we have (nearby) leases going for $2,000 an acre.”

For the Land Board, interest in the Niobrara has been a cash cow, helping overall mineral revenues to double over the last two years, Yoder said. Bonus royalties from bidding for leases jumped from $14.8 million in 2009 to $63.2 million for the fiscal year ending on June 30, 2011.

Two of the major players in the Wattenberg, Anadarko Petroleum and Marathon Oil, have leases on the Larimer County open space properties.

“We look forward to the opportunity of working with government agencies and stakeholders wherever possible,” said Brian Cain, spokesman for Anadarko in Houston.

Cain noted that the open space parcels are significantly west of most ongoing drilling operations. But it would be difficult to rule out exploration activities dealing with a resource that his company estimates could produce between 500 million and 1.5 billion barrels of oil.

“It’s still early in the exploration of this field,” he said. “This is a core field of our operations in the Rockies, and while that area has been explored by vertical drilling for years, we believe the horizontal drilling program allows us to better access these resources.”

Minimizing surface disruption
Following its first meeting on Jan. 11, the Energy by Design technical team appeared primarily concerned about disruption of surface features.

A priority may be protecting the Lindenmeier National Historic Landmark site in Soapstone, where 11,000-year-old Native American artifacts were excavated, said Meegan Flenniken of the Larimer County Natural Resources Department. There are also many smaller archeological locations, in both Soapstone and Red Mountain, where artifacts have been found.

These adjacent open-space properties are also part of a larger effort by the Nature Conservancy, Legacy Land Trust and the Colorado Division of Wildlife to create a 200,000-acre mountains-to-plains wildlife corridor.

“There are myriad rare plants, plant communities and important wildlife areas, and this large, uninterrupted connectivity (of land) maintaining them,” said Flenniken, who is part of the technical team.

The Energy by Design study is expected to last about six months. The participating government agencies — there are no private entities involved — are also getting the word out about accepting public comment.

Flenniken said that the rare plants in the areas include ferns, narrow-leaf cottonwood and chokecherry and upland flower known as Wyoming kittentails. “There are two important riparian areas, Sand Creek and Boxelder Creek, golden eagle and prairie falcon nesting sites, mule-deer concentration area, and an important pronghorn (antelope) winter range,” she added.

Energy by Design is a fairly new endeavor for the Nature Conservancy, although the conservation group said the framework has been used in several other countries and also for oil and gas development near Craig.

So far, the Nature Conservancy has identified raptor sites and rare canyon (riparian) ferns, as well as swift fox den sites, the threatened butterfly plant, and perhaps most significantly, the chestnut-collared longspur, with the project area noted as one of few places in North America where this bird nests.