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Grand Junction and Palisade municipal officials – concerned about threats to local water supplies – protested a U.S. Bureau of Land Management decision Tuesday to go ahead with a sale of oil and gas leases on 12,000 acres in Mesa County.

The leases up for sale on Thursday are within the municipalities’ watershed, leaving local officials worried about the water quality of four creeks that supply the municipalities.

The two communities joined forces to file formal protests with the agency in December.

“I am really disappointed that the BLM blew us off,” said Palisade Mayor Doug Edwards. “Now, we’ll have to meet as a board to explore what other options are available to us, including legal options.”

The Colorado BLM Office considered delaying the auction on the Mesa County parcels but instead decided to pull 7,291 disputed acres in San Miguel County.

A total of 159,246 acres will be sold on Thursday, including the Mesa County parcels.

BLM officials say they have placed stipulations on drilling that will ensure drilling won’t muddy Palisade’s and Grand Junction’s water supply.

“We began working with the city of Grand Junction and the town of Palisade since mid-last year on protective measures and feel like we have covered all the bases now,” said BLM spokeswoman Theresa Sauer.

But Edwards said the stipulations BLM has placed on the lease are not stringent enough.

At stake, he said, was $6 million the town had invested in a new water-treatment system as well as residents’ health.

“Right now, there is nothing in place that prohibits companies from having open pits,” Edwards said. “They can pack up and walk away, leaving the pit fluids to seep into our water.”

Grand Junction City Councilman Jim Spehar said recent spills and other problems in neighboring Garfield County linked to oil and gas were cause for concern.

The Colorado Department of Public Health and the Environment, Spehar noted, recently cited Encana Corp. for alleged stormwater violations in two Western Slope gas fields.

“I don’t think any of us are under the impression that we’re going to stop drilling,” Spehar said. “What we’re saying is, if you’re going to do it, let’s do it right.”

Democratic U.S. Sen. Ken Salazar of Colorado, who asked BLM to delay the auction, called the agency’s decision “shortsighted.”

“This energy crisis wasn’t created in a day, and this wholesale rush to sell leases to the highest bidder in sensitive watershed areas is not going to solve the problem,” Salazar said.

Staff writer Kim McGuire can be reached at 303-820-1240 or kmcguire@denverpost.com.

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