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Settlement ends lawsuit over drilling at Baca refuge

The parties to a lawsuit over the federal government's handling of a drilling proposal on the Baca National Wildlife Refuge filed a settlement agreement Thursday with the U.S. District Court in Denver.

Although the San Luis Valley Ecosystem Council, Lexam Explorations and the U.S. Fish and Wildlife Service had announced a draft agreement in June, this week's filing brought a formal close to the three-year-old lawsuit.

The ecosystem council's complaint alleged that the federal agency had failed to comply with the National Environmental Policy Act   when it gave Lexam the go-ahead to drill two exploratory wells on the 92,500-acre refuge near Crestone.

The agreement nullifies the service's prior approval of the project and calls for the agency to initiate another review under NEPA.

While the agency may include information from its 2008 review in the new analysis, the agreement does not bar the ecosystem council from challenging the agency's use of that information.

The refuge, which is closed to the public until the agency completes a management plan, was created by Congress in 2000 along with the legislation that granted national-park status to the Great Sand Dunes National Park.

That legislation, while authorizing purchase of the refuge's surface estate, did not buy up the mineral rights, which remain under the control of Toronto-based Lexam.

Chris Canaly, director of the ecosystem council, said her group would continue to pursue a buyout of those mineral rights, but declined to discuss the matter further, citing a provision in a memorandum of understanding signed between the three parties that called for a coordination of any public statements.

Likewise, Mike Blenden, who oversees all three of the San Luis Valley's refuges, including the Baca, cited that provision in declining to comment on a schedule for the new round of studies on the drilling proposal.

The memorandum negotiated between the three parties in May calls for the agency to issue a draft of study of the project by Jan. 7 and a final decision by April 1.

  Under the agreement, the federal agency also will pay just over $150,000 in attorneys fees and costs to the ecosystem council's attorney.