Alliances Form to Blunt Energy Boom in Rockies

From the lush valleys of Montana to the high desert of New Mexico, oil and gas rigs are pumping furiously amid the greatest energy boom in the West in nearly 20 years.

The Bush administration is turning to the West to drill, pump and mine its way to a national energy policy that has been like Christmas in July for those with something to sell.

It also has turned state against state, landowners against oil companies and some Republicans against the president. It has even forged an unlikely alliance among farmers, ranchers and environmentalists who worry about the effects of exploitation.

“The intermountain region has been targeted by President Bush’s proposal as a sacrifice zone,” said Steve Smith, representative for the Sierra Club’s Southwest office.

Industry officials look across the West and see something else: Untapped opportunity, a Persian Gulf of natural gas, enough coal to light up California and a sea of oil just waiting to be extracted.

“It’s exciting to see that areas in the Rockies are being looked at that have not been heavily looked at in 15 years,” said Robert Bayless Jr., a petroleum engineer in Denver who followed his father into the business.

Low supplies and high demand drove up natural-gas prices last winter, boosting an industry already on the upswing. Gas prices have dropped from the peak of nearly $11 per 1,000 cubic feet in January, but they’re still three to four times the $1 per 1,000 cubic feet paid during the price crash of 1998-99.

There have not been so many rigs pumping in the region since the mid-1980s, before the oil and gas industry went bust, Bayless said. The region also produces oil, but most of the drilling is for gas.

New Mexico was the country’s No. 2 natural gas producer in 2000. Wyoming was fifth, followed by Colorado at sixth.

Colorado is on pace to issue 2,500 drilling permits, the most in state history and well over last year’s 1,529, which was 50% more than in 1999.

Wyoming issued 5,053 permits through June and expects to approve a total of 10,000 or 11,000 permits this year.

“We’re issuing 33 permits every work day,” said Don Likwartz, supervisor of the Wyoming Oil and Gas Conservation Commission. “I had to add some people just to keep up with it.”

Mineral tax dollars are gushing into state and federal coffers and the region is crawling with crews and their rigs.

In Wyoming, the job growth rate has surpassed the nation’s for seven straight months. State legislators were stunned to be handed a $695-million surplus, the largest in decades.

As long as prices stay high, the good times will roll. A 2000 report by the Colorado Oil & Gas Assn. estimated potential natural gas reserves of 235 trillion cubic feet in the Rocky Mountain region, including methane gas produced from coal beds. That is second only to the Gulf Coast region’s potential of 259.4 trillion cubic feet.

The industry is particularly excited about the Powder River Basin of northeast Wyoming, one of the nation’s top coal-producing regions and now a hot spot for coalbed methane gas production. A total of 18,900 drilling permits have been issued for the area since 1986, and projections put the number as high as 90,000 in a decade.

Gas trapped in the coal seams is released by pumping ground water to relieve the pressure. Tens of thousands of gallons of water a day may be pumped from just one well, prompting fears about depleting ground water in the semi-arid region.

In neighboring Montana, farmers and ranchers are concerned the highly saline water pumped out and discharged in the Powder River Basin will harm their water, soil and crops when it flows their way.

“The only stable economy in eastern Montana is agriculture. Why do they want to make it worse and impede the income from it for something hit-and-miss like coalbed methane that’ll be here for 10 years and gone?” said Roger Muggli, a Miles City, Mont.-area farmer and manager of the Tongue and Yellowstone Irrigation District.

“I’m not against it, but make ‘em do it right. I guarantee, they’ll still get their money out of it.”

Industry officials say they’re doing what they can to minimize the environmental impact of their drilling and they complain that excessive government restrictions are keeping them away from some of the richest oil and gas reserves across the West.

The San Juan Basin, which straddles a region of northern New Mexico and southwestern Colorado, is full of gas and coal and has been a magnet for energy companies for decades. It is also a ranching area and, with its towering, rugged mountains and ancient Indian ruins and other archeological treasures, is a draw for tourists and people moving from the big cities.

Industry and Wyoming officials are looking to the basin for pointers on how to develop coalbed methane gas.

Environmentalists and landowners, however, insist the area should serve as a warning. They complain about gas contaminating water wells, noise from pumps and air compressors, trucks tearing up the land and cattle getting sick or dying after drinking water from waste ponds.

“We have folks down here who can light their tap water on fire there’s so much methane contamination,” said Gwen Lachelt, executive director of the Durango-based Oil & Gas Accountability Project, a public interest group.

Increased drilling across the mountain West has led to more clashes between drillers and landowners who often don’t own the minerals under their ground.

Owners of the minerals have the right to develop the oil, gas or coal, even if that means drilling wells on someone else’s property.

The conflicts have become even worse because of the great growth across the region in the last decade.

“It used to be that gas and oil development just happened in the middle of nowhere. Well, now it happens in people’s backyards,” Lachelt said.

Along with the growth in the region has come a shift in attitude toward logging, mining, drilling and other development in the West.

Even longtime enemies are suddenly finding common ground when it comes to drilling.

“It’s unusual for ranchers and farmers to align themselves with environmentalists, but we’ve made the decision to agree on things we can agree on and leave the rest alone,” said Tweeti Blancett, a seventh-generation rancher in northwestern New Mexico.

The change has not gone unnoticed in Washington.

With elections looming next year, a handful of Republicans joined Democrats recently to reject coal mining and oil and gas drilling on pristine federally protected land in the West. The vote dealt a blow to Bush’s energy production plans.

Some groups say the national energy discussion should focus on conservation and increasing the use of wind and solar power, not on oil, gas and coal. The Colorado Public Interest Research Group and other organizations in the West argue that conservation and renewable energy are better for the environment and more cost-effective.

“The country does look to the West for energy. They should look to the West for some of the alternative energies,” said Robin Hubbard of CoPIRG.

Greg Schnacke, administrator of the Colorado Oil & Gas Assn., said conservation and renewable sources should be part of the mix, but won’t meet the rising demand for energy by themselves.

“There will be about 2,500 drilling permits issued this year. Last year, there were 50,000 housing permits,” he said. “What are all these people demanding?

“They all want gas heat. They want air conditioning. They all want electricity,” Schnacke added. “We’re the ones providing the energy for all of this.”