June 19, 2013 | Volume 100 / Number 25

Canadian Oil Firm Pulls Lease Offer

A Canadian oil exploration company has withdrawn the offer it made to lease minerals on land belonging to Valley County, citing the difficulty of conducting business under restrictions intended to protect the habitat of the threatened sage grouse.

Mona Doebler / For The Courier
The sage grouse\'s status as a threatened species gives it certain clout in these parts – enough to discourage development ventures on its habitat lands. This particular sage grouse was spotted near Hinsdale.

In an email to the Valley County Commissioners sent on Tuesday, Don Lee, an attorney for Montex Oil Co., said, “Unfortunately because of the sage grouse habitat issues involving federal lands, it will be extremely difficult to conduct exploratory operations with regard to the Valley County mineral interest.”

In a telephone interview with the Courier, Lee said the county’s mineral rights and some private rights were small holdings mixed in a large area of federal lands in the Bitter Creek area of northwest Valley County.

Lee, whose office is in Shelby, described Montex’s operations as “very exploratory – rank wildcat, even ram pasture.” In the oil business, this means territory with little or no chance of producing oil and gas.

He said Montex Oil made their proposal to Valley County several months ago, before the Bureau of Land Management released the draft HiLine Resource Management Plan in March. He declined to state the value of the lease offer.

There are five alternative plans in this draft for management of the 2.5 million acres of public land in the HiLine District, but the BLM’s preferred alternative is one that limits surface-disturbing or disruptive activities of the habitat of big game animals and certain bird species, especially greater sage grouse, mountain plovers and grassland birds.

The BLM is using the regulatory mechanisms in its Resource Management Plans to protect and enhance sage grouse habitat. This may halt the dwindling of the population and preclude its listing under the Endangered Species Act.

Valley County Commissioner Dave Pippin had a sharp reaction to the decision by Montex Oil Co.

“This is big if an oil company decides it’s not going to lease from Valley County,” Pippin said. “They’re scared of the BLM preferred alternative – no surface occupancy.”

The BLM has about 1.1 million acres of land in Valley County, closely intermixed with private land and about 1,200 acres of county-owned land.

“The federal land is so interwoven with county and private land that the company doesn’t want it. I think it kills us,” Pippin said.

He noted that the county retained some mineral rights to submarginal crop land acquired by the BLM under the Bankhead-Jones Act after the drought and Great Depression years. Valley County retained a 6.25 percent mineral interest in about 300,000 acres of the abandoned or foreclosed farm lands that the county sold to the federal government under Bankhead-Jones, Pippin said.

“The preferred alternative will severely hurt Valley County” Pippin said. “So many acres of federal land – the county retained some mineral rights. Now they’re worthless.”

Lee voiced a gloomy outlook for the combined effects of the policies of the BLM and Montana Fish, Wildlife and Parks in this area.

“They’re going to turn Valley County and large parts of Phillips County into a wilderness with bison and sage grouse,” he said.

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