FARMINGTON — The Bureau of Land Management’s Farmington Field Office has received a withdrawal letter for a right-of-way application required for the proposed Pinon Gathering System Project, better known as the Pinon Pipeline project, effectively killing the project, according to a BLM press release.

The letter received Friday from Saddle Butte San Juan, LLC, which was proposing the oil pipeline project, stated that it was withdrawing the right-of-way application due to current market conditions. As a result of the withdrawal, BLM will no longer consider the project, according to the release.

The pipeline project drew criticism from several environmental groups, fearing the impact it would have on Chaco Culture National Historic Park structures.

Casey Nikoloric, spokeswoman for Saddle Butte San Juan, told The Daily Times that the decision to withdraw from the project was in no way the result of opposition to the pipeline, but was based solely on economic factors.

“The Pinon Gathering System has been inactive for more than a year due to the decline in crude oil prices, which means that the project simply is not viable,” Nikoloric said. “This situation remains unchanged and as a result, we have withdrawn our application for right-of-way.”

Nikoloric said it’s highly doubtful that an additional application will be filed in the future, as the company does not foresee conditions developing that would improve viability of the project.

“We are disappointed because we believe the project would have provided a safe and environmentally responsible opportunity to remove a significant amount of oil tanker (truck) traffic from roadways in northwest New Mexico, and would bring economic growth to the region.”

Scott Hall, a realty specialist with the Farmington BLM office, said his office received the right-of-way application for the project from Saddle Butte San Juan on July 31, 2014.

The proposed system would have involved a 49.5 mile gathering line pipeline that would run from the area of Lybrook — southeast of Bloomfield off U.S. 550 — east to a main pipeline terminal. The main pipeline, which would cross federal, state, tribal and private lands, would run approximately 98 miles south to a facility in either Prewitt or Milan in New Mexico.

Hall said the Farmington BLM office conducted four scoping meetings between December 2014 and February 2015 in an effort to obtain comments from the public, and they received more than 30,000 comments. Hall said many of the comments were not related to the pipeline, but pertained to concerns about fracking and the impact on Chaco Culture National Historical Park, which is about 10 miles away from the proposed pipeline. One Chaco structure, though, is approximately a mile away from the proposed path, Hall said.

Hall said when BLM fails to receive communication from companies about projects a year or more after receiving their right-of-way application, the agency initiates contact to see if the project is still being planned. Since it had been almost a year-and-a-half since his office heard from Saddle Butte San Juan, Farmington BLM sent a letter to the company in November, and received the company's letter of withdrawal on Friday.

Mike Eisenfeld, with the environmental group San Juan Citizens Alliance, has been a vocal opponent of the pipeline project. Eisenfeld said he doubted that the decision to abandon the pipeline project had nothing to do with public scrutiny, and said another factor may have been that BLM never completed an environmental assessment.

“It’s incumbent upon BLM to analyze impacts of a project, but they never completed the environmental assessment,” said Eisenfeld. “Therefore, we don’t know what the environmental standpoint is. Should a new proposal be submitted in the future, I’m sure that there will be increased public interest.”

BLM spokesman Zach Stone acknowledged that the environmental assessment procedure for the project was incomplete.

“The reason the process wasn’t completed is because the company never completed their application,” Stone said.

Hall said Saddle Butte San Juan had not submitted all of the required studies necessary for BLM to complete the environmental assessment.

Leigh Black Irvin is the business editor for The Daily Times. She can be reached at 505-436-0853.

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