Group says deal in works to halt drilling on Colorado wildlife refuge

Group says deal pending in refuge drilling suit

DENVER — Conservation groups that sued to block drilling on a southern Colorado wildlife refuge are trying to raise money and interest in buying an energy company’s mineral rights in the area.

Christine Canaly of the San Luis Valley Ecosystem Council said Wednesday that Toronto-based Lexam Explorations Inc. has agreed to sell its natural gas rights if a $9.7 million deal can be reached by May 17. The agreement would settle a lawsuit over Lexam’s plans to drill on the Baca National Wildlife Refuge in the San Luis Valley, about 200 miles southwest of Denver.

The ecosystem council and Citizens for San Luis Valley-Water Protection Coalition sued the U.S. Fish and Wildlife Service for approving drilling on the wildlife refuge next to the Great Sand Dunes National Park. Lexam intervened on the government’s behalf.

Lexam Vice President Stefan Spears confirmed that an interim agreement was reached, but said the federal judge overseeing the case asked the parties not to discuss it.

Fish and Wildlife Service spokeswoman Sharon Rose declined to comment because the lawsuit is ongoing.

Settlement talks have been under way since a federal judge granted the conservation groups a preliminary injunction last year, blocking the drilling while the lawsuit continued.

The lawsuit claims that drilling for natural gas would irreparably harm the refuge, home to several colonies of Gunnison’s prairie dogs, a candidate species for the endangered list. It’s also used by migratory birds, burrowing owls, songbirds and elk.

“This is a historic opportunity to protect a naturally diverse and pristine area at the base of the Sangre de Cristo Mountains for future generations,” Canaly said.

The conservation groups, federal officials and Lexam reached a tentative agreement last week, Canaly said. The next step is for Lexam to justify its asking price of $9.7 million.

The company acquired rights to the natural gas in the 1990s, before the former Baca Ranch was bought by the federal government for a wildlife refuge.

Federal law gives mineral-rights holders the right to reasonable use of the surface to extract minerals.

Attorney Travis Stills of the Colorado-based Energy Minerals Law Center represents the conservation groups and said his clients are talking to foundations, private organizations, elected and federal officials about buying Lexam’s mineral rights.

The minerals extend to the adjacent Great Sand Dunes National Park and national forest land.

“We have a few people at the table right now who are willing to entertain this,” Stills said.

Canaly said land for the national park was acquired in a similar way. Legislation was approved in 2000 to make the Great Sand Dunes National Monument a national park, but the transformation wasn’t complete until 2004.

The Nature Conservancy bought a ranch to preserve the land while federal funding was put together.

The 750-foot dunes, North America’s tallest, hug the bottom of snowy Sangre de Cristo Mountains.