Federal oil and gas leasing revenues rose 22 percent for Colorado and three neighboring states to more than $1.1 billion in 2004, according to a U.S. Bureau of Land Management report.
Colorado had the largest percentage jump in royalties, 41 percent, to $89 million, mainly due to increased drilling in the Piceance Basin in the western part of the state.
Wyoming received more than $600 million in federal payments in 2004, New Mexico about $383 million and Utah about $73 million, according to the BLM report released in May.
The report, “Oil and Gas Activity on Public Lands,” details the extent to which the natural-gas boom is focused on federal lands in the Rocky Mountain region.
The bulk of all federally leased acres – 79 percent – are in Wyoming, New Mexico, Colorado, Utah and Montana, more than 28 million acres.
The BLM has issued a total of 45,800 leases nationally, with 87 percent in the five-state region, according to the report.
The region also receives 89 percent of royalties disbursed by the government from its on-shore leasing program.
Industry executives believe that there are still too many restrictions on leasing and access to federal minerals.
In the 1980s, the BLM had administered close to 80,000 leases, said Mark Smith, executive director of the Denver-based Independent Petroleum Association of Mountain States.
“Right now, we’re at one of the lowest points in the last 20 to 30 years,” Smith said.
Some BLM field managers recently have taken steps to slow development in certain areas, to the industry’s dismay, he said. Environmental groups are also challenging major agency decisions in court.
“I think special-interest groups are trying harder than ever to stop development throughout the West,” Smith said. “The federal regulatory process for development on federal lands invites second-guessing and litigation.”
The Powder River Basin, in northeast Wyoming, remained the largest gas field, although the BLM said increasing production could vault the Jonah Field in southwestern Wyoming to the top by year’s end.
The agency recently released a plan for 3,100 new wells in the Jonah gas field that could affect 16,000 acres.
The Wyoming Oil and Gas Conservation Commission estimates it issued 8,964 drilling permits in 2004.
The Colorado Oil and Gas Conservation Commission says it may issue 3,700 permits in 2005.
Colorado led the nation in coal-bed methane, with 31 percent of total U.S. production. Most of the methane gas came from the state’s portion of the San Juan Basin, which straddles the border with New Mexico.
“I think we’re certainly doing our part to supply the nation’s energy demands,” said Gwen Lachelt of the Oil and Gas Accountability Project in Durango.
New Mexico was second with 28 percent of national coal-bed methane production and Wyoming was third with 22 percent.
While gas output climbed, 2003 oil production dropped 10 percent in the five-state area to 77 million barrels.
“There has been so much emphasis on gas and coal-bed methane, oil has been ignored,” said Rob Coleman, author of the BLM report.
The region also leads the nation in the number of controversial federal leases issued for minerals located below privately owned ground.
The so-called split estates have created a new tension between rural Westerners and drilling companies.
About two-thirds of the federal split-estate leases are in Wyoming, New Mexico, Montana and Colorado.
In February, Wyoming Gov. Dave Freudenthal signed a bill to require oil and gas companies to give a 30-day minimum notice to the surface owners before drilling and to pay fair damages for loss of land value.
Similar legislation failed this year in Colorado.
Staff writer Theo Stein can be reached at 303-820-1657 or tstein@denverpost.com.
