Colo. group seeks to halt auction of energy lease

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A citizens group is asking the Colorado State Land Board to halt an auction of land in the South Park area for oil and gas development, including two parcels next to a reservoir that supplies some of Denver’s drinking water.

The State Land Board, which manages more than 4 million acres of mineral rights that the federal government granted to Colorado to generate money for schools and other institutions, plans to auction more than 100 parcels around the state Feb. 17.

Two of the parcels in Park County are next to Antero Reservoir, which is owned by Denver Water. The county already has some wells within its boundaries.

The group Be the Change said in a letter Monday to the land board’s acting director that there should be a moratorium on leases in the area until more is known about how drinking water might be affected by hydraulic fracturing, a technique for extracting oil and natural gas.

Board commissioners have a meeting Friday when it could hear public comments, including the request from Be the Change.

In hydraulic fracturing, or “fracking,” water and chemicals are pumped underground at high pressure to help release trapped oil and natural gas.

The U.S. Environmental Protection Agency plans to study fracking to better understand its potential effects, with the goal of reporting initial findings in 2012.

A spokeswoman for Denver Water said the utility hasn’t taken a formal position on the auction.

Interest in the overall auction is expected to be high due to industry excitement over the Niobrara shale under parts of northeast Colorado, Wyoming, Nebraska and Kansas. EOG Resources Inc. said last year that its “Jake” well in northern Colorado produced 50,000 barrels of crude oil in the first 90 days.

In August, one of the State Land Board’s quarterly auctions brought in a record $26.2 million overall. That included $1.92 million that Alpine Exploration bid for 480 acres in Weld County in northeast Colorado, setting a state oil and gas lease record price of $4,000 per acre.