To the BLM, natural resources extractors trump protectors
Sale of Colorado drilling rights sets onshore record
We trim this 2008 article from the Associated Press of August 14.
by Judith KohlerAn auction of federal oil and gas leases on Colorado's Roan Plateau generated nearly $114 million, a record for onshore energy lease sales in the lower 48 states.
The US Bureau of Land Management's auction of leases on 31 parcels covering 54,631 acres marked a major milestone in a multiyear battle over drilling on the western Colorado landmark.
It netted more than 10 times the state’s previous highest-grossing federal auction -- $11.8 million in February 2006.
The BLM estimates the plateau about 180 miles west of Denver contains 9 trillion cubic feet of recoverable natural gas.
About 100 people, including media, attend the auction at a hotel in Golden, west of Denver. Two auctioneers, both wearing white cowboy hats, coaxed buyers to increase their bids. BLM officials said brokers usually do the buying and the agency doesn't immediately know which companies are behind the deals.
The Roan Plateau alternates between open flat spots, deep canyons and rugged peaks as high as 9,000 feet. It provides crucial winter habitat for some of the country's largest elk and mule deer herds. It's home to mountain lions, peregrine falcons, bears, rare plants and genetically pure native cutthroat trout dating to the last ice age.
The BLM says their proposal would preserve 51 percent of land on top of and below the plateau, meaning it would not preserve 49 percent of the 54,631 acres, while allowing recovery of more than 90 percent of the natural gas.
JJS: Can drilling be done in a way that in time allows recovery of more than 90 percent of the ecosystem?
Environmental groups have filed a lawsuit challenging the BLM's development plan for the Roan, and thousands of protests have been filed with the agency over the auction.
Conservationists say the plateau that looms over the Colorado River has been a mainstay of the area economy because it is a hunting, fishing and recreation focal point.
Suzanne O'Neill of the Colorado Wildlife Federation said she's not optimistic that the protests filed by her group, some city and counties, and the state Department of Natural Resources will change much.
The BLM rejected a proposal by Gov. Bill Ritter that would have made more land on the Roan Plateau off-limits to drilling and would have phased in leasing. Ritter and others said prices for the leases might have gone higher with a delayed sale because of rising demand.
While a record, the sale revenue was much lower than predictions issued by some industry groups, which reached as high as $1 billion.
The BLM won't issue the leases until the protests are decided, a process that could take several months. The state and federal governments will each get 49 percent of the revenue, with the remaining 2 percent covering administrative costs.
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JJS: Besides collect “rent” for the natural resources, government should also:
(1) collect an Ecology Security Deposit and require Restoration Insurance;
(2) charge users of natural gas the cost of their downwind pollution;
(3) not in any way subsidize energy extractors with cash from the public treasury. To balance these charges,
(4) quit taxing earnings and sales.
Shifting levies from enterprise to natural resources would shift investment the other way, from extraction and speculation to R&D and implementing sustainable alternatives to burning nonrewables. More policy still,
(5) the total tax shift would include shifting the property tax from buildings to locations. When owners needn’t pay taxes on improvements but do pay "rent" for sprawling on their parcels, then they build more compactly and erect structures of higher quality. Being contiguous and better insulated, buildings leak less heat and use less fuel.
All that is geonomic policy; it’s how to reduce demand for natural gas in particular, for fossil fuels in general, and preserve plateaus like the Roan in Colorado forever, along with the rest of the planet.
Jeffery J. Smith runs the Forum on Geonomics.
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