Agencies at Odds Over Wyoming Methane Project

The Denver office of the Environmental Protection Agency is threatening to give the Interior Department a failing grade for blessing a massive methane drilling project in northeastern Wyoming, according to draft documents.

EPA and Interior documents obtained by The Times provide a rare view into the internal discord sparked by President Bush’s mandate to expedite and increase energy production from federal lands.

Although written in the bureaucratic language of government, the documents reveal deep disagreements concerning the Interior Department’s plans for the Powder River Basin, which is managed by the department’s Bureau of Land Management.

Among the documents is the Denver EPA office’s analysis of the BLM’s 900-page draft environmental impact statement for its plans for drilling more than 51,000 coal-bed methane wells in the Powder River Basin.

“The EPA considers the Wyoming draft [environmental impact statement] to be inadequate because it did not include an alternative that would meet water quality standards for irrigated agriculture,” wrote Jack W. McGraw, the EPA’s acting regional director, in a draft of the agency’s formal comment about the project.

The EPA gave the BLM’s environmental impact statement a rating of “EU-3”--environmentally unsatisfactory. That means the EPA identified significant risks to the public health or to the local environment.

It indicates that EPA officials believe far-reaching changes should be made to the draft environmental impact statement before it is made public. If the EPA’s concerns are not corrected by the BLM, the Powder River proposal will be referred to the White House Council on Environmental Quality for review. This could delay the project for months.

“This is what happens when you try to streamline environmentally sensitive projects,” said Tom Darin, public lands director for Wyoming Outdoor Council, the environmental group that provided the documents to The Times. “They should have done a better study, and then maybe they could have had it done on time.”

This potential setback for Powder River Basin comes just a week after the Senate rejected the Bush administration’s top energy priority: drilling for oil in Alaska’s Arctic National Wildlife Refuge. Oil and gas production in the West have become a higher priority for the administration, and the Powder River Basin project is the biggest test yet of whether Bush can increase production there.

Max Dodson, an assistant regional administrator in the EPA’s Denver bureau, stressed that his office’s letter and detailed analysis were draft documents that have been sent to Washington and are subject to change.

Dodson explained that the EPA’s comments were sent to headquarters for review a week or so before a deadline for public comment on the BLM’s environmental impact statement. Two days before that deadline, the BLM extended it, from April 18 to May 15.

The later deadline gives the two agencies more time to work out their differences in private, and local environmentalists in Wyoming fear it will give Interior officials time to put pressure on EPA officials to give better marks to the impact statement.

EPA officials in Washington said it was too early to say what the agency’s final comment would look like. “There’s still a lot of work that’s underway on this,” EPA spokesman Joe Martyak said.

Neither Dodson nor McGraw suggested that the political appointees in Washington have criticized their work or attempted to rewrite it.

“Headquarters is not second-guessing us,” McGraw said earlier this week.

The Denver EPA’s comments apparently raised the ire of Deputy Interior Secretary J. Steven Griles, who wrote Deputy EPA Administrator Linda Fisher on Sept. 12 and asked her to find another way to address the EPA’s concerns rather than writing a comment letter that might “impede the ability to move forward in a constructive manner.”

Griles questioned why McGraw, a career EPA official, was proposing to take such “significant action” just days before the politically appointed head of the Denver office was scheduled to take over from him.

Although coal-bed methane has been under production for several years in the Powder River Basin, only about 2% of the 25 trillion cubic feet of recoverable reserves estimated in the basin have been produced. Once finished, the BLM’s environmental impact statement will set the tone for future development and be a good test of the Bush administration’s commitment to care for the environment as it boosts energy production.

The EPA’s draft comments focused on the problems posed by the 4.4 million acre-feet of ground water that will be brought to the surface from the estimated 51,367 coal-bed methane wells that will be drilled in the area over a decade or so.

If the water is allowed to flow to surface streams and rivers, as allowed in the BLM’s preferred alternative, “it would make the Tongue River and the Belle Fourche River unsuitable for irrigation,” the draft letter said.

That would violate state rules that forbid degradation of water quality that decreases crop or livestock production, the letter stated.

The ground water being extracted in much of the targeted area has high levels of sodium, which can permanently destroy the soil’s ability to absorb water and support plant life.

The water problem already is vexing the companies that have drilled more than 5,000 wells on private and state land in the area. More than half of the mineral rights in Powder River Basin belong to the federal government, but most of the production of that gas is on hold while the BLM completes it environmental impact statement procedure.

The companies have sought ways to re-inject water into the ground, but only one of 18 efforts has been successful. The current working solution is to keep the water in huge reservoirs next to each well, but environmentalists fear that water will seep out and harm nearby rivers and irrigation streams.

The EPA letter also raises concerns about the impact on air quality caused by 17,000 miles of gravel and dirt roads that will be built as part of the development. In general it says that the BLM failed to adequately address the impact on wildlife. Specifically lacking, it said, was a discussion of how to avoid electrocution of golden eagles from overhead power lines.