By Blaine Harden
Washington Post Staff Writer
Thursday, April 28, 2005; A03
PINEDALE, Wyo. -- As energy companies and Bush administration officials have
long told the story, lack of access to federal land is the primary roadblock
for increased production of natural gas in the United States.
The Independent Petroleum Association of America made this familiar claim in
February at a congressional hearing. Similarly, Vice President Cheney said
last year that because of unjustified federal limits on drilling, "large
parts of the Rocky Mountain West are off-limits."
The lack-of-access story, however, does not square with what is happening on
the ground here at the epicenter of what is widely being called the largest
boom in gas drilling on federal land ever in the Rocky Mountain West.
In response to White House orders to expedite gas extraction on federal
lands, the Bureau of Land Management has issued more gas-drilling permits in
the West than the industry has rigs to drill with or workers to operate the
rigs, according to government records, industry experts and local officials.
The BLM issued a record number of drilling permits last year, but the gas
industry is struggling to keep up, with the number of completed wells flat
or declining over the past three years.
"Around here, I don't even hear that argument about access anymore," said
Prill Mecham, field manager for the BLM in the Pinedale area, which she said
contains more gas in a smaller footprint than anywhere in the West. "The
companies are clear where they need to drill, and they have access to all
these areas."
Several of the energy companies operating in the Pinedale area -- where
there is an estimated 35 trillion cubic feet of natural gas, about 11 times
the total amount produced annually on all public land in the United
States -- are unreservedly bullish in their reports to shareholders about
prospects for high-profit, long-term access to gas. "Ultra's well economics
are robust," says a company profile by Ultra Petroleum Corp. of Houston, one
of the major operators here.
With a record number of gas-drilling rigs now operating in the West,
industry analysts say, energy companies have all but exhausted available
drilling equipment in North America. Because delivery on new rigs can take a
year or more, the industry is not expected to catch up in the near future to
the drilling permits that have already been issued by the federal
government.
"Large drilling contractors are operating at full utilization," said Byron
Pope, an analyst for Pickering Energy Partners Inc., a Houston-based energy
research firm. "Don't expect to see a massive wave of more drilling."
There is also an acute shortage of gas-field workers. Here in Wyoming, which
leads the West in gas drilling on public land, an industry-sponsored school
was opened last month in Casper to train needed roughnecks. Its director,
Charlie Ware, said energy companies have "told us that they need 1,000 new
workers a year for the next five years to drill the leases that are out
there right now."
In New Mexico, where gas drilling on public lands is also booming, Bob
Gallagher, president of the state oil and gas association, agreed that the
industry has temporarily run out of capacity: "If we had the availability of
equipment and labor as we speak, you would see more crews working, more
wells being drilled."
Gallagher and other industry experts say that the federal government must
continue to lease more land for drilling because older gas fields are drying
up, dependence on foreign supply is increasing and consumer appetite for gas
continues to surge.
As industry scrambles to catch up with existing drilling permits, state and
local governments across the Rocky Mountain West, as well as a number of
local and national environmental groups, are becoming increasingly
concerned -- and in some cases, outraged -- about the environmental and
social consequences of increased gas production on federal land.
"When you have a huge portfolio of unused leases, why does the Bush
administration continue to issue more, especially in environmentally fragile
areas?" asked Dave Alberswerth, who analyzes energy exploration on public
lands for the Wilderness Society.
Responding to these concerns, John Wright, a spokesman for the Interior
Department, said: "We only lease in areas on public land where there is gas
and where we can do it in an environmentally sensitive manner. More
important, these decisions are based on land management planning, which is a
public process."
Much of the recent grumbling about gas drilling in the West, however, comes
from ranchers who say their rights as owners have been trumped by federal
mining law.
They complain about the "split-estate." Many ranchers in the region own only
surface rights to their land, while the BLM owns sub-surface mineral rights.
Oil and gas companies can lease those mineral rights from the BLM and
operate on a rancher's land, building roads and drilling wells, even without
the rancher's permission.
In an unprecedented response to constituent anger over the split-estate,
five state legislatures -- in Wyoming, Montana, Colorado, North Dakota and
New Mexico -- this year considered laws to protect and enhance the rights of
surface owners in disputes with energy companies. Wyoming was the one state
to enact such a law (in Montana and Colorado, bills were narrowly turned
back).
The Wyoming law calls for negotiations on damage payments, requires land
reclamation when drilling is done and spells out rules for mediating
disputes. In the other four states, similar or tougher laws are likely to be
considered again next year, said Kevin Williams, a field organizer for the
Western Organization of Resource Councils, which coordinates local land-use
groups.
"It's about polluted water, it's about noise, it's about dust," Williams
said. "A lot of people are angry, and this is not going to die down."
Here in the Pinedale area, a report by the Wilderness Society says that the
rapid pace of drilling is damaging "a wildlife resource of national
significance." The report says that road building associated with drilling
has fragmented winter habitat for some of the West's largest and
longest-migrating herds of pronghorn antelope and mule deer, while reducing
breeding and nesting areas for the sage grouse, a bird many experts regard
as threatened.
Local BLM chief Mecham concedes that intensive gas drilling and road
construction in the Jonah Field near Pinedale in the past four years has
caused some environmental damage, especially to habitat for the sage grouse.
According to Wyoming Gov. Dave Freudenthal (D), that is an understatement.
In a recent letter to Mecham, he said the Jonah Field is an "example of what
not to do in the future." Surface disturbance from roads, wells and
pipelines is so great, he wrote, that any measure to mitigate the damage
would now be a "futile attempt to 'perfume the pig.' " In an interview at
her office here, Mecham said that "there are lessons to be learned from
Jonah" and that the BLM is now in a better position to control the drilling
that has begun in a nearby gas field, called the Pinedale anticline, where
there are winter herds of pronghorn and mule deer.
Many local residents, having witnessed the frantic pace of drilling in the
past four years, are less sanguine.
"The country needs this energy, but it is insane what happened at the Jonah
Field, and there is still no development plan for the Pinedale anticline,"
said Gordon Johnston, a Bush supporter and former Marine who until January
was a Republican county commissioner in Sublette County, which includes
Pinedale.
Asked whether he believes the BLM will now ride herd on the gas companies
and protect wildlife in the Pinedale anticline, Johnston smiled sadly.
"There is not a doubt in my military mind," he said. "That will not happen."