HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/20/2011 - RESOLUTION 2011-113 AUTHORIZING AN INTERGOVERNMENTDATE: December 20, 2011
STAFF: John Stokes
Daylan Figgs
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 21
SUBJECT
Resolution 2011-113 Authorizing an Intergovernmental Agreement with the Colorado State Board of Land
Commissioners and Larimer County Regarding the Energy by Design Planning Process.
EXECUTIVE SUMMARY
Soapstone Prairie Natural Area (Soapstone) and Meadow Springs Ranch (MSR) are owned by the City of Fort Collins
Natural Areas Program and Fort Collins Utilities, respectively. Soapstone and MSR are considered split estate
properties as the City owns the surface estate and the mineral estate (including oil and gas) is owned by other parties.
The State of Colorado owns approximately 12,400 acres of mineral rights underlying the properties: 3,500 underlying
Soapstone and 8,900 underlying MSR.
The Colorado State Board of Land Commissioners (SLB) has contracted with The Nature Conservancy (TNC) to
conduct an Energy by Design (EbD) planning process on Soapstone and MSR. The goal of the EbD process is to
develop a plan that conserves key natural, recreational, landscape view, agricultural, and cultural resource values while
providing reasonable access to the SLB’s and others’ mineral estate. This plan also includes strategies to avoid,
minimize, and mitigate surface impacts to key resources. Subject to Council review and approval of the proposed
MOU, the City will be a partner in the planning process. The Memorandum of Understanding outlines the
responsibilities of each party for the Energy by Design planning process.
BACKGROUND / DISCUSSION
Colorado, like many western states, recognizes separate ownership of the surface estate and the mineral estate and
the private property rights associated with each. When different parties own the surface and minerals, this is referred
to as “severed” or “split” estates. Soapstone and MSR are considered split estates as the City owns the surface estate
and other parties own the mineral estate (including oil and gas). Of the several parties that own the underlying mineral
rights, the majority are owned by Anadarko Land Corp, Anadarko E&P Company LP (together referred to as
Anadarko), and the State of Colorado. State-owned minerals are managed by the SLB.
A mineral investigation conducted by a professional geologist as part of the due diligence investigations during the
purchase of Soapstone in 2004 revealed the mineral rights were severed from the surface ownership. The
investigation concluded the probability of resource extraction was so remote as to be negligible. A second
investigation conducted in 2008 that focused primarily on the potential for petroleum exploration supported this finding.
During the period from 2008 to present, technologies have greatly advanced in the areas of horizontal drilling and
hydraulic fracturing or “fracking”. Geologic formations once thought to have limited potential for economic viability are
now being developed into productive oil and gas wells. The recent discovery of economically viable wells in the
Niobrara Shale formation, the same shale formation underlying Soapstone and MSR, is a result of these new
technologies.
To date, oil and gas activities on City properties have been limited to a small portion of MSR located in Weld County.
In 2010, the City received Notices of Intent by Slawson Exploration to drill on two sites located within MSR. The
minerals were leased to Slawson by the SLB in 2005; Slawson did not drill the intended wells.
In 2011, the City was contacted by Tidelands Geophysical and Seitel Data with requests for seismic surveys on
portions on MSR. Access to MSR was granted by the City and the surveys were conducted in the summer of 2011.
In March 2010, SLB staff contacted Natural Areas staff to discuss the possibility of leasing State owned mineral rights
underlying portions of Soapstone and MSR. The dialog that occurred between the City and SLB led to the decision
to delay the leasing actions and to form a collaborative effort between the SLB, City, County, and TNC to develop a
plan for oil and gas development that preserves key natural, recreational, landscape view, agricultural, and cultural
resource values while providing reasonable access to the SLB’s and other’s mineral estate.
December 20, 2011 -2- ITEM 21
In the November 4, 2011 SLB Board of Commissioners Meeting, SLB staff were authorized to contract with TNC to
fund a planning process developed by TNC called Energy by Design and to enter into a Memorandum of
Understanding with the City and Larimer County to complete the plan. Larimer County was included, given its role
as a long term conservation partner in the Mountains-to-Plains project and due to the fact the SLB owns a portion of
the minerals underlying Red Mountain Open Space.
The City, County, and SLB will utilize the TNC Energy by Design planning process to develop a Comprehensive Drilling
Plan for the Project Area generally described as Soapstone, MSR, and Red Mountain Open Space. This partnership
will also work with other surface and mineral estate owners and mineral lessees in the Project Area to develop terms
and conditions for a form of Surface Use Agreement (SUA). The SUA would allow defined surface use activities for
oil and gas development in the Project Area while minimizing surface impacts and protecting natural, recreational,
agricultural, landscape view, and cultural resources. The approach entails a “no net loss” strategy that requires mineral
companies to protect habitat of equal value accomplished through on-site as well as off-site mitigation (including land
and water conservation). For those minerals that are not controlled by the State, the ability to achieve no net loss will
depend on the willingness of oil exploration and production companies to participate in the planning process as well
as the implementation phase. While no company has as yet committed to the process, the three major exploration
and production companies affiliated with the properties (either through ownership or lease holdings) have been
contacted and expressed interest in the project.
The MOU indicates the City and Larimer County will be responsible for:
• Managing public outreach and organizing public information sessions
• Responding to public concerns
• Managing the process for any required approvals from the City Council or the County Board of Commissioners
• Managing communications with other stakeholders in the project area
• Providing TNC and the SLB previously acquired data, maps, field studies, research, and other information
regarding the cultural, natural, recreational, agricultural, and landscape resources within the Project Area.
The SLB will be responsible for:
• Scope of Work with TNC
• Providing the staff support and financial compensation for TNC’s work products
• Implementing the Comprehensive Drilling Plan, Surface Use Agreement, and goals of the MOU by
incorporating appropriate terms and conditions in the SLB oil and gas leases
• Obtaining any required approval from the Board of Land Commissioners.
FINANCIAL / ECONOMIC IMPACTS
The City will be responsible for providing staff time necessary to complete the Energy by Design planning process.
The State Land Board is contracting with TNC and is responsible for compensating TNC for the work products
described in the MOU.
ENVIRONMENTAL IMPACTS
Energy by Design is a process designed to bring together all of the parties of interest, including surface owners,
mineral rights owners and lessees, in order to develop a common understanding of natural, cultural, scenic,
agricultural, and economic resources. One the resources have been carefully identified and understood, the
participants design an approach to exploration and production activities intended to direct surface activities associated
with extraction activities away from critical natural and cultural resources (such as wetlands, rare species, and cultural
sites). The approach entails a “no net loss” strategy that requires participating mineral companies to protect habitat
of equal value accomplished through on-site as well as off-site mitigation (including land and water conservation). Staff
believes this collaborative process represents the City’s best approach for protecting the City’s surface interest.
December 20, 2011 -3- ITEM 21
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BOARD / COMMISSION RECOMMENDATION
At its December 14, 2011 meeting, the Land Conservation and Stewardship Board discussed the proposed
Memorandum of Understanding. A memo from the Board is attached (Attachment 3) and the minutes from that
meeting will be provided in the “Read-before” packet on Tuesday, December 20, 2011.
ATTACHMENTS
1. Map of the Project Area and State Land Board Mineral Ownership
2. Land Conservation and Stewardship Board memo, December 15, 2011
!H
!H
¹
Attachment 1 - State Land Board Sections in the Laramie Foothills Area
Created by City of Fort Collins Natural Areas - 2011
Project Area
Larimer County
!H Slawson Abandoned Drill Site
Siesmic Site
State Land Board Sections
City of Fort Collins Utilities
Larimer County
City of Fort Collins NA
0 0.5 1 2 Miles
RED MOUNTAIN OPEN SPACE
SOAPSTONE PRAIRIE NATURAL AREA
MEADOW SPRINGS RANCH
RESOLUTION 2011-113
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING AN INTERGOVERNMENTAL AGREEMENT
WITH THE COLORADO STATE BOARD OF LAND COMMISSIONERS AND
LARIMER COUNTY REGARDING THE ENERGY BY DESIGN PLANNING PROCESS
WHEREAS, the City is the owner of major land holdings in northern Larimer County,
including Soapstone Prairie Natural Area (“SPNA”) and Meadow Springs Ranch (“MSR”); and
WHEREAS, both SPNA and MSR (together referred to as the “Properties”) were acquired
by the City for significant public purposes, and each are of substantial value and concern to the City;
and
WHEREAS, the Colorado State Board of Land Commissioners (“State Land Board”) owns
the minerals associated with approximately 3,500 acres that are part of SPNA and approximately
8,900 acres that are part of MSR, for a total of approximately 12,400 acres; and
WHEREAS, Larimer County (the “County”) has a similar interest in preservation of the
conserved lands in northern Larimer County, including Red Mountain Open Space, which is owned
by the County and also is the site of substantial mineral rights holdings of the State Land Board; and
WHEREAS, in response to concerns raised by the City and the County regarding the
potential for oil and gas exploration on the Properties through leasing of mineral interests by the
State Land Board, and in recognition of the substantial natural resource and other values associated
with the Properties, the State Land Board has proposed to collaborate with the City and the County
in developing a plan for oil and gas development that preserves key natural, recreational, landscape
view, agricultural and cultural resource values while providing reasonable access to the mineral
interests on the Properties; and
WHEREAS, the State Land Board has contracted with The Nature Conservancy (“TNC”)
to provide consulting assistance and support for the proposed collaboration, referred to as the Energy
by Design process; and
WHEREAS, in order to document the parties’ respective rights and responsibilities, the State
Land Board has proposed an intergovernmental agreement between the Board, the City and the
County, entitled Memorandum of Understanding, the form of which is attached hereto as Exhibit
“A” and incorporated herein by this reference; and
WHEREAS, staff has reviewed the proposed Memorandum of Understanding, and has
recommended that the City proceed as proposed in order to allow the Energy by Design process to
proceed; and
WHEREAS, the Memorandum of Understanding provides that the City and the County will
manage public outreach associated with the process, and will provide to the State Land Board and
TNC previously acquired data, maps, field studies, research and other information regarding the
natural, recreational, landscape view, agricultural and cultural resource values on their respective
properties; and
WHEREAS, in addition, the Memorandum of Understanding provides that the Energy by
Design process will result in the development of a comprehensive drilling plan on the parties’
properties to preserve existing resource values and avoid net loss of such values that may result from
oil and gas exploration; and
WHEREAS, the City Council has reviewed the Memorandum of Understanding and
considered the benefits and advantages associated with developing a plan for preserving the resource
values on the Properties in anticipation of potential oil and gas development; and
WHEREAS, Article II, Section 16 of the City Charter empowers the City Council of the
City, by ordinance or resolution, to enter into contracts with other governmental bodies to furnish
governmental services and make charges for such services or enter into cooperative or joint
activities with other governmental bodies; and
WHEREAS, C.R.S. §29-1-203 also provides that governments may cooperate or contract
with one another to provide certain services or facilities when such cooperation or contracts are
authorized by each party thereto with the approval of its legislative body or other authority having
the power to so approve.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the City Manager is hereby authorized to enter into an intergovernmental agreement
with the State Land Board and Larimer County in substantially the form attached hereto as Exhibit
“A”, entitled Memorandum of Understanding, together with such additional or modified terms and
conditions as the City Manager, in consultation with the City Attorney, deems necessary and
appropriate to effectuate the purposes of this Resolution or protect the interests of the City.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 20th
day of December A.D. 2011.
Mayor
ATTEST:
City Clerk
FINAL DRAFT
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Memorandum of Understanding
THIS MEMORANDUM OF UNDERSTANDING is made and entered into as of
, 2011 (the “Effective Date”), by and among the State of Colorado (the
“State”), acting by and through the Colorado State Board of Land Commissioners, (the
“Board”), the City of Fort Collins, and Larimer County. The parties may be referred to
hereinafter collectively as the “Parties” and each individually as a “Party.”
Recitals
This Memorandum is made with respect to the following facts:
A. The Board is a trustee agency and governmental entity of the State and,
pursuant to Article IX, Sections 9 and 10 of the State Constitution and Title 36, Article 1,
Sections 100.3 through Section 153 of the Colorado Revised Statutes, the Board serves as
the trustee of the lands granted to the State in public trust by the federal government, lands
acquired in lieu thereof and additional lands held in public trust. The Board owns a portion
of the mineral estate within the Project Area (as defined below).
B. The City of Fort Collins is a governmental entity and is the owner of surface
estate in Meadow Springs Ranch and the Soapstone Prairie Natural Area which are a
portion of Project Area.
C. Larimer County is a governmental entity and is the owner of surface estate in
Red Mountain Open Space which is a portion of the Project Area.
D. The Nature Conservancy (“TNC”) is a non‐profit corporation which has been
hired by the Board to utilize its Energy by Design framework to create an analysis and map
of the project area for the Board as described in the Scope of Work attached as Exhibit A.
E. The Project Area includes three open space parcels which are adjacent to one
another and cover over 60,000 acres north of Fort Collins, along the Wyoming border:
Meadow Springs Ranch. City‐owned, 26,000 acres.
Red Mountain Open Space. County‐owned, 15,000 acres.
Soapstone Prairie Natural Area. City‐owned, 22,058 acres.
These properties are split estate, with the major mineral owners/lessees being the Board,
Anadarko, Marathon, and Chesapeake. A map of the Project Area is attached as Exhibit B.
Agreement
NOW, THEREFORE, the Parties agree as follows:
1. Vision. The Board is interested in leasing and developing its oil and gas
holdings on trust lands within the Project Area. TNC shall provide the Board an analysis
and map of the Project Area which depicts areas and resources critical to meeting both
community value and statewide conservation goals. Utilizing TNC’s work product, the
Parties will work collaboratively with each other and with oil and gas lessees and other
EXHIBIT A
FINAL DRAFT
mineral owners, to develop a plan for oil and gas development that seeks to preserve key
natural, recreational, landscape view, and cultural resource values while providing
reasonable access to the Board’s and other’s mineral estate, with specific strategies to
avoid, minimize, and mitigate surface impacts to such resources.
2. Purpose. The Parties acknowledge that the general purpose of this
Memorandum is to establish the Parties’ intent and expectations regarding their long‐term
cooperation and good faith dealing towards each other related to the future development
of the mineral estate within the Project Area. The Parties recognize that such cooperation
and good faith dealing is necessary to ensure that successful realization of the vision of this
Memorandum of Understanding. The Parties shall, on an ongoing basis, cooperate and
coordinate with each other to achieve the goals in this Memorandum of Understanding and
the Scope of Work, including, without limitation, attending meetings and sharing
information relevant to the Project Area on a timely basis and by acting in good faith
towards each other in the management and implementation of activities on both parcels.
The Parties shall use reasonable efforts to cause their employees, consultants and agents to
cooper ate with the provisions of this Memorandum of Understanding.
3. Products. The Parties envision that the following products will be developed
to accomplish the goal of managing oil and gas development so as to avoid, minimize, and
mitigate the surface impacts and protect natural, recreational, scenic, and cultural
resources.
a. TNC shall provide the final product and analysis required under the Scope of
Work to the Parties.
b. The Parties shall work with each other and other mineral estate owners in the
Project Area to develop a Comprehensive Drilling Plan that serves the goals of
this Memorandum of Understanding.
c. The Parties and other mineral estate owners in the Project area shall develop
proposed terms and conditions for a form of Surface Use Agreement that would
allow for defined surface use and impact for development of oil and gas in the
Project Area while avoiding, minimizing, and mitigating surface impacts and
protecting natural, recreational, landscape and cultural resources. The Surface
Use Agreement may restrict oil and gas development completely on certain
portions of the Project Area to avoid impacting sensitive natural or cultural
resources. However, the Parties contemplate that said Surface Use Agreement
will provide reasonable access for development of the oil and gas in the mineral
estate.
4. Roles and Responsibilities of the Parties. The Parties agree to the roles and
responsibilities as allocated in this paragraph in addition to cooperating to develop the
products as discussed in paragraph 3. The Parties intend to use best efforts by assigning
staff resources to meet these responsibilities.
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a. City of Fort Collins and Larimer County shall be responsible for the following:
i. managing the public outreach and information process by communicating
with the public, organizing public information sessions, and responding to
public concerns regarding this Memorandum of Understanding in a manner
consistent with the spirit of and stated purpose of this Memorandum of
Understanding,
ii. managing the process of any required approvals of the form of Surface Use
Agreement from the City Council of Fort Collins and the Board of County
Commissioners for Larimer County, respectively, upon development of a
mutually agreeable form of Surface Use Agreement,
iii. managing communications with other stakeholders in the Project Area
including Great Outdoors Colorado, citizens’ groups, and surface lessees, and
iv. providing to TNC and the Board previously acquired data, maps, field
studies, research, and other information regarding the cultural, natural,
recreational, and landscape resources within the Project Area for TNC’s use
in creating the final products required in the Scope of Work. This shall be
considered an in‐kind contribution to support the goals of this Memorandum
of Understanding.
b. The Board shall be responsible for the following:
i. entering into the Scope of Work with TNC and providing the staff support
and financial compensation for TNC’s work product;
ii. incorporating terms and stipulations in their oil and gas leases in the
Project Area designed to implement the Comprehensive Drilling Plan, Surface
Use Agreement, and the goals of this Memorandum; and
ii. obtaining any required approval from the Board of Land Commissioners
for the Surface Use Agreement, Comprehensive Drilling Plan, and oil and gas
3
leases.
5. Ongoing Cooperation. In addition to consulting on the Comprehensive
Drilling Plan and Surface Use Agreement, the Parties shall, on an ongoing basis, cooperate
and coordinate with each other regarding the development of the mineral estate and
furthering the goals to avoid, minimize, and mitigate the impacts to the surface estate and
the protected resources described above in the Project Area. Such ongoing cooperation
shall include, without limitation, sharing relevant information on a timely basis and acting
in good faith towards each other in the implementation of activities in the Project Area. It
is the Parties’ intent that upon development and execution of one or more Surface Use
Agreements in the Project Area, the City of Fort Collins and Larimer County shall enforce
the terms of the Surface Use Agreement and the Board shall enforce the terms of any oil
and gas lease in the Project Area in order to ensure long term success in implementing the
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goals of this Memorandum. The commitments in this paragraph shall survive termination
of this Memorandum.
6. Communications. The Parties agree to the following process for addressing
media contacts and requests for inspection of records under the Colorado Open Records
Act:
a. With regard to media contacts and news releases, the parties will work together
on joint news releases, public announcements, advertisements or publicity
concerning the products anticipated from this Memorandum. This is not to
limit the parties from responding to media inquiries or information requests
from constituents. Standard talking points and project information will be
jointly created and used by the parties to provide consistent and clear details to
the general public. The parties will also keep each other informed when
interviews have been conducted with various media outlets, to ensure parties
involved are kept informed of public response.
b. The Parties acknowledge that certain Parties to this Memorandum are subject
to the provisions of the Colorado Open Records Act and may, in certain
circumstances, be obligated to allow inspection of certain records that are
made, maintained or kept by the Parties. Upon receipt of a request to inspect
any records concerning this Memorandum or its products, the Party in receipt
of the request shall confer with the other Parties to provide them notice and an
opportunity to respond to the request for inspection.
7. Term. If the Parties have not developed a Comprehensive Drilling Plan and
Surface Use Agreement by December 31, 2013, this Memorandum shall terminate and be of
no furth e r forc e or effect.
8. Termination. Any Party to this Memorandum may terminate participation in
the Memorandum by providing thirty (30) calendar days written notice of termination to
the other Parties. In the event of termination of any party, upon expiration of the notice
period, the entire Memorandum shall also terminate as to the remaining Parties’
particip at ion a nd all Parties shall be relie ved of further obligation under the Memorandum.
9. Miscellaneous Provisions
a. Notices. Any notice required or permitted to be given under this
Memorandum shall be in writing and shall be deemed given upon personal delivery
or on the second business day after mailing by registered or certified United States
mail, postage pr epaid, to the appropriate party at its address stated below:
If to the Board:
hrough the Colorado State Board
4
State of Colorado, acting by and t
of Land Commissioners
1127 Sherman Street, Suite 300
FINAL DRAFT
Denver, CO 80203
Attn: Director, and Minerals Director
ins:
If to the City of Fort Coll
___________________________
If to Larimer County:
________ _________________
b. Amendment. This Memorandum may be amended by written agreement
executed and delivered by the Parties.
c. No Partnership. Nothing in this Memorandum shall be deemed in any way to
create between any of the Parties any relationship of partnership, joint venture or
association, and the Parties hereby disclaim the existence of any such relationship.
d. Assignment. No Party may assign, charge, encumber or otherwise amend any
of its rights and obligations under this Memorandum without the prior written
consent of the other Parties.
IN WITNESS WHEREOF, each Party has executed this Memorandum of
Understanding or has caused it to be executed, under seal, on its behalf by its duly
authorized representatives as of the Effective Date.
STATE OF COLORADO, acting by and through
the COLORADO STATE BOARD OF LAND
COMMISSIONERS:
By:
N ame: William E. Ryan___________________________
T itle: Director, State Board of Land Commissioners
CITY OF FORT COLLINS
By:
Name:
Title:
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6
LARIMER COUNTY
By:
N ame:
T itle:
Exhibit A Scope of Work
Mountains to Plains Energy by Design
Summary: The Nature Conservancy (TNC) will utilize its Energy by Design (EbD) framework to identify
opportunities to avoid, minimize, and mitigate the impacts of oil and gas development to natural and cultural
values associated with three open space parcels in northern Larimer County. EbD is designed to achieve “no
net loss” outcomes to biodiversity values in light of energy development. TNC will work collaboratively with
the State Land Board (SLB) as its client, project partners including the City of Fort Collins and Larimer County,
and with a technical team comprised of experts from government agencies (federal, state, and local) and
conservation organizations. The project will provide for an “onsite analysis” of priority biodiversity values
prior to SLB’s lease sale (Phase I), which SLB can use to guide the development of a Minerals Development
Plan (Phase II). Following the creation of the Minerals Development Plan, the lessee(s) may opt to participate
in a third phase of the project, to identify and implement offsite mitigation opportunities associated with
unavoidable impacts onsite (Phase III). This SOW covers Phases I and II, and briefly describes Phase III.
Project goal: SLB seeks a strategy to lease and develop its oil and gas holdings on trust lands within the
Soapstone Prairie Natural Area, Red Mountain Open Space, and Meadow Springs Ranch parcels in northern
Larimer County. SLB and TNC will work collaboratively with Larimer County and the City of Fort Collins, and
in conjunction with oil and gas lessees and other mineral owners, to develop a plan for oil and gas
development that provides access to the state’s mineral estate, with specific strategies to avoid and minimize
surface impacts to key natural and cultural resource values. This initiative may also be part of SLB’s goals to
create oil and gas development master plans on specific trust lands in the future.
Project area: The project area includes three open space parcels with severed estate ownership between the
surface owners and minerals holders, with the SLB being one of the major minerals owners with over 15,000
acres in trust. The three open space parcels are adjacent to one another and cover over 60,000 acres north of
Fort Collins, along the Wyoming border:
Meadow Springs Ranch. City‐owned, 26,000 acres.
Red Mountain Open Space. County‐owned, 15,000 acres.
Soapstone Prairie Natural Area. City‐owned, 22,058 acres.
Timing and milestones: The project will be completed by December 30, 2012. There are three phases of
this project, of which the SLB and TNC will work together directly on the first two. The deliverables for Phase
I will be completed by June 30, 2012. TNC’s work on Phase II will be completed by December 30, 2012. There
will be three project check‐ins over the life of the project, during which time SLB and TNC will agree whether
to proceed and if so, whether changes are needed. Documentation of these decision points will be recorded
through review and acceptance of summary meeting notes exchanged by the parties as part of the progress
reports provided after each technical team meeting.
Milestone Date
PHASE I – ONSITE ANALYSIS (Led by TNC)
Target selection, collect available data, identify data gaps
Technical team meeting #1 November 30, 2011
Project Check‐in: evaluation and status review between SLB and TNC December 2011
Create draft maps of importance of natural and cultural values. Develop
different options for combining this information to identify important
places for avoidance and minimization of energy development
Technical team meeting #2 January 2012
Project Check‐in: evaluation and status review between SLB and TNC February 2012
Based on input from technical team, create draft final results for priority
areas for avoidance and minimization of impacts associated with potential
energy development
EXHIBIT A
to MOU
Milestone Date
Technical team meeting #3 March 2012
Project Check‐in: evaluation and status review between SLB and TNC April 2012
Complete Phase I
Send draft deliverables to SLB for comm ent April 2012
Edit and send final deliverables to SLB June 2012
PHA SE II – MINERALS DEVELOPMENT PLAN (Led by SLB)
TNC’s contribution to minerals plan complete December 2012
Phase I (Onsite Analysis) – Identify priority areas for avoiding and minimizing impacts: TNC will lead
this phase. This phase will identify and map priority natural and cultural resource values for the three open
space properties to inform SLB’s oil and gas leasing decisions. Example inputs include maps of natural and
cultural values such as rare plants, wildlife habitat, cultural sites, and viewsheds. Example data sources
i nclude Colorado Division of Parks & Wildlife and the Colorado Natural Heritage Program. TNC will look to
the City and County for guidance on how best to address cultural values.
This phase will aid SLB decisions regarding which stipulations to build into the Minerals Development Plan
and associated leases, such as no surface occupancy and restricted surface occupancy (see Phase II below),
a nd may also be used to decide provisions of Surface Use Agreements between the SLB and the surface
owners (City of Fort Collins and Larimer County).
The onsite analysis will involve the identification and mapping of priority natural and cultural resource
values by the project partners and a technical team. The final product will show a map of areas and resources
that are critical to meeting both local community value and statewide conservation goals (see Figure 1 as
example). The map will incorporate available GIS data and may involve habitat modeling as necessary. The
final product will take into account the uniqueness (i.e., irreplaceability) and importance of the natural
resource values in any one unit of analysis relative to the Central Shortgrass Prairie ecoregion as a whole,
with rare and difficult‐to‐mitigate‐for values being of greater importance (e.g., rare plants) than more
common and easier‐to‐mitigate‐for values (e.g., mule deer habitat).
Phase II (Minerals Development Plan) – Identify a drilling plan for the project area: SLB will lead this
phase. The second phase of the project, in which some support will be required on an hourly basis from TNC
to the SLB, will require the development of a drilling plan for the minerals estate on SLB holdings, which may
also include a leasing plan, stipulations and surface use agreements. This phase will also require participation
and involvement with other mineral estate owners, representatives from Larimer County and the City of Fort
Collins, and a potential operator. In this phase, there are no specific deliverables for TNC. Rather, TNC will
ontribute technical support in the development of the drilling plan upon SLB request, and as the budget
nder this contract permits.
c
u
Optional Phase III (Mitigation Plan) – Identify a plan for potential offsite mitigation: TNC would lead this
phase, should it occur. This phase of the project is not defined in this scope of work, as the goal of the parties
is to have a comprehensive plan which seeks to avoid and minimize disturbances to the site first, essentially
conducting onsite vs. offsite mitigation plans. However, there may be a need for offsite mitigation. This
project phase is anticipated to require participation with TNC, other mineral estate owners, representatives
from Larimer County and the City of Fort Collins, the selected minerals operator, and other stakeholders as
ecessary. The SLB may be a participant, but does not anticipate financially supporting this phase of the
roject.
n
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Summary of deliverables from TNC
Phase I Report – This report will describe the background, methods, results, and participants for
Phase I so the SLB has documentation of what decisions were made, by whom and why. For example,
the report will describe:
o Natural and cultural targets selected and rationale
o
o GIS layers used, including sources of data and modifications made
Weighting/prioritization of each GIS layer and rationale
o Method for combining individual GIS layers – final method used and other methods tried – in
order to identify recommended avoidance and minimization areas.
o Any other information and explanation to make it clear how the analysis was developed.
The fina
system m
l map(s) will prioritize important areas, with a “ranking system.” For example, this ranking
o
ay show:
Tier 1 – areas where avoidance is legally required (e.g., threatened and endangered species)
o Tier 2 – areas where avoidance (e.g., no surface occupancy) is recommended based on rarity
or other significance of the natural and cultural values
o Tier 3 – areas where minimization of impacts (if avoidance is not possible) would be
sufficient to protect natural and cultural values
o Tier 4 – areas where energy development is preferred, such as already‐disturbed areas.
TNC will provide all materials, include the reports and associated shapefiles by email and/or CD,
based on the delivery method preferred by the SLB. Color hard copies of the report will only be
provided upon request by the SLB and if the budget allows.
Phase II contributions – SLB does not necessarily expect any specific deliverables from TNC for the
Minerals Development Plan. However, as described above, SLB may request input from TNC on an
hourly basis as needed and as the project budget permits.
Use of results:
The final report for Phase I will be provided to the SLB from TNC, with copies of the report also going to the
contributing stakeholders. All parties will be providing data and services for the study and will share in joint
ownership of the document and findings. The final report is also expected to be a “living product” which will
be used to make decisions regarding a Minerals Development Plan, which is expected to include a leasing
plan, stipulations, surface use agreements, and a drilling plan. “Living product” means that SLB may include
additional or updated data should the need for doing so arise between the completion of this project and the
lease sale; it is not expected that TNC would rerun the EbD analysis after its completion. While all parties
expect to use the report, the contract to provide data and the memorandum of understanding do not
guarantee that the plans devised in this report will be implemented.
Responsibilities
TNC will facilitate the completion of all work on the Energy by Design analysis, including the
completion of all GIS work, and soliciting input from Project Partners and the technical team. TNC
will provide input to the drilling plan as requested by SLB and as remaining hours allow under the
project budget.
SLB will participate on the technical team and work with TNC to ensure that EbD deliverables will
meet SLB’s needs, and provide data to TNC as needed for the EbD analysis. SLB will facilitate the
completion of the Minerals Development Plan (Phase II) once the EbD analysis is complete.
Project partners (City, County) will participate on the technical team and provide data to TNC as
needed and complete all duties pursuant to the Memorandum of Understanding between the SLB, the
City and the County.
Figure 1. Sample results for onsite analysis.
This map shows the final results for the onsite analysis of sensitive features for an EbD project that TNC completed
with Questar, in northwestern Colorado and southwestern Wyoming. The map shows three types of avoidance areas
– legal avoidance, recommended avoidance, and sensitive vegetation avoidance. TNC could create a similar map for
the Mountains to Plains project area.
MountainsBoard to Plains Energy by Design 12/14/11 2011 - State Land
Sources:Surface- 8/1/2011 SAMS
Minerals- 3/29/2010 SAMS
Red Open Mountain Space
Soapstone Natural Area Prairie
Meadow Ranch Springs
¦¨§25
2 1
1
7
6 5
6
5
8
4
5 4 3 2 1 4
9
5
8 9
8 9
9 8
8
4 3 2 1
9
5
7
4 2 1
8
3
1
7
3 2 6
5
3
9
4
6
7 7
6
6
7
3
2
23
14
26
34
13
35
36
30
11
35 31
29
24
31
32
11
32
11
11
12
25
10
25
11
18
36
28
33
13
26
17
25
19 23
27
25
26
14
33
34
10
35
30
33
29 28
20
33
36
16 17 16
32
20 21
26
24
17 13
17
21
32
12
35 36
13
12
28
34
25
17
15
32
28
33 34
20
35
16
16
10
29
35 34
29
15
36
13
27
22
12
27 29
36
12
14
26 27
29 25
24
10
15
14 13
12
15
32
21
14
26
18
28 27
22
16
23
16
31 33
18
15 18
30
10
22 19
17
30
28
31
30
18
11
31
10
30
14
31
18
19
15
34
27
19 20 21 22 23 24 19 20 21 22 23 24 19 20 21
22 23 24
22 23 24 19 20 21 22 23 24 19 20 21 22 23 24 19 20 21
3
27
22
11N 69W 11N 68W
10N 69W 10N 68W
11N 70W 11N 67W
12N 69W 12N 68W
10N 70W 10N 67W
12N 70W 12N 67W
LARIMER WELD
^
¦¨§25
¦¨§70
¦¨§76
Project Area Outline
SLB Mineral Estate
SLB Surface Ownership
Soapstone City of Ft. Collins Prairie Natural Area-
Meadow City of Ft. Springs Collins Ranch-
Red Larimer Mountain County Open Space-
0 1 2
Miles
Mountains Energy by to Design Plains
Project Area
EXHIBIT B
to MOU