Federal land managers overhauling the framework for potential new oil and gas development in western Colorado have hashed out a compromise canceling access on the Thompson Divide while allowing drilling on 46 square miles of surrounding forest.

This planning for land near Carbondale reflects an intensifying struggle over the White River National Forest, which has become the most-visited public forest in the nation. It draws 13 million people a year – more than Yellowstone, Yosemite and Grand Canyon combined.

The problem is that, while the forest remains a refuge for bears, endangered lynx and rare plants such as Ute Ladies’ Tresses orchids, it also holds underground fossil fuel resources that companies want to be able to extract if market prices make this profitable. In the past, the feds leased land to companies freely, often extending leases automatically, so that companies could maximize their options.

A recent U.S. Geological Survey analysis found that western Colorado may hold 40 times more natural gas than previously believed – 66 trillion cubic feet of gas, up from a 2003 estimate of 1.6 trillion cubic feet.

“This has really been challenging,” White River National Forest supervisor Scott Fitzwilliams said of the current effort to update leasing plans.

Bureau of Land Management officials, who administer industry access to minerals, say their “preferred alternative” for the forest is fair to communities and industry.

It would cancel 25 leases held by oil and gas companies for possible future development on the 220,000-acre Thompson Divide – delighting environment advocates. It also drops proposed new restrictions for 27 other parcels leased to active companies on the surrounding forest.

“We’re looking for a balanced approach. We’re also trying to be responsive to local concerns,” BLM spokesman Dave Boyd said. “When you have producing leases where companies already have been producing under existing rules, it is much more difficult to change those existing rules than when there has not been development.”

A 2014 Forest Service plan for the area recommended increased restrictions: limiting surface activity on habitat for bears and lynx, on steep terrain prone to erosion, and near waterways.

Shifting overall priorities, forest officials say, favor conservation of roadless forest, wildlife habitat, wetlands and watersheds that people increasingly count on to survive in the semi-arid West.

A final decision on a BLM leasing plan is expected this fall after a public comment period that ends Sept. 4.

This issue is contentious because oil and gas operations can involve roads, noise and heavy equipment on ecologically fragile terrain.

For years, western Colorado communities have challenged leased access to minerals under the Thompson Divide area southwest of Carbondale. Two companies, SG Interests and Ursa Resources, held leases giving access to oil and gas but did not produce.

“We’re glad the agency is moving to cancel the leases inside the Thompson Divide. But we are disappointed that the BLM is dropping new protections for the other half of the lands at issue,” Earthjustice attorney Mike Freeman said.

Those surrounding East Willow, Mamm Peak and Battlement Mesa areas need better protection, said attorney Peter Hart, conservation analyst for the Carbondale-based Wilderness Workshop.

“If the BLM is not going to cancel those leases, the least they should do is update the stipulations to reflect the protections we know are necessary. Their ‘preferred alternative’ does not do that,” Hart said.

“There’s a lot of support for protecting these areas. The mission of our group and others is broader than just the Thompson Divide. We want to see all these important, ecologically-sensitive areas on our White River National Forest protected.”

Industry leaders bristled at the cancellation of old leases and are pressing to preserve future access for drillers.

“Withdrawing leases ten years after they were sold and paid for represents a gross violation of contracts between the federal government and the companies. Companies are getting the message loudly and clearly that the federal government cannot be trusted to honor contracts and property rights, which has impacts well beyond the White River National Forest and Colorado,” Western Energy Alliance vice president Kathleen Sgamma said.

“The BLM arrived at its conclusion by downplaying the huge natural gas potential in the area, and ignoring the USGS analysis that shows the Mancos Shale underlying those leases is the second largest in the country,” Sgamma said.

Future new oil and gas operations in western Colorado likely will depend on the price of oil and demand for more fossil fuels, as well as proposed new facilities in Oregon for exporting gas to China, which would promote increased drilling in Colorado. No rush to drill is expected now because natural gas prices have been hovering around $2.40 per thousand cubic feet. If prices topped $3.50 per thousand cubic feet, industry officials say, companies likely would find drilling profitable.

If a company proposes to lease land for possible future drilling, BLM and Forest Service officials would set project-specific criteria. Ecological needs not met by broad landscape-scale leasing plans could be addressed in specific project reviews.

The feds’ final leasing plan for the 27 leases where companies operate on the surrounding 46 square miles drops previously-proposed new restrictions “but we are not talking about drastic changes or reductions in oversight and environmental protection,” Fitzwilliams said.

“The stipulations that these leases currently have are sufficient, given the fact that we still have to do site-specific analysis. We can still do mitigation and design criteria that are protective.”