Proposed legislation could put the kibosh on some drilling on federal lands.
By Cassandra Willyard
Intensive gas development on public and private lands at the base of the Roan Cliffs is already well underway. (c) 2003; Colorado Environmental Coalition.
Environmentalists and outdoor enthusiasts value the western United States for its majestic vistas and untamed wilderness. The energy industry, meanwhile, prizes the West for another reason—vast deposits of natural gas. But pending legislation might limit the industry’s ability to tap into that resource.
Historically, natural gas producers deemed many western reserves too difficult to extract profitably. However, over the past decade, rising gas prices and new, more efficient technologies have made drilling on those lands economically feasible. These factors, combined with hefty industry tax breaks, have fueled a drilling bonanza on federal lands.
“The activity level has been gigantic,” says Alan Carroll, a geologist at the University of Wisconsin-Madison. “A lot of places that I used to drive through were kind of quiet and dusty; now they’re alive with exploration.”
In August, the House of Representatives passed an energy bill, HR 3221, that would slow the rapid pace of drilling, ensure that damaged lands and waters are restored to health, and give the public and landowners more say. If it becomes law, opponents claim the bill will limit supplies of natural gas and drive prices up, but environmental groups say the provisions are relatively modest.
“These provisions simply assure that drilling that takes places on federal lands is done in a more responsible manner than it has been over the past six years,” says David Alberswerth, The Wilderness Society’s Bureau of Land Management (BLM) program director.
The conflict has been especially heated in western Colorado, where locals, environmentalists, and state officials are fighting to keep gas producers off federal lands on the Roan Plateau. The pristine landscape boasts black bears, peregrine falcons, and genetically pure Colorado River cutthroat trout. The proposed bill would prevent any wells from being drilled on federal lands atop the plateau, thousands of feet below which lie enough gas deposits to heat four million homes for 20 years, according to the BLM.
The BLM has been working to open the plateau up for oil and gas exploration for seven years. In June, the agency finished crafting a plan and prepared to start issuing leases. The new legislation could stymie that plan.
“This [amendment] effectively would prevent any production,” says Tom Moskitis of the American Gas Association.
There are loopholes. If the house amendment becomes law, the BLM would still be able to lease the mineral rights, but producers would have to find a way to access the gas without disturbing the plateau’s surface. Representative Mark Udall (D-CO), who pushed for the amendment, says it’s feasible. “The gas could be tapped by what the industry calls ‘directional drilling’—drilling on a slant,” says Udall. But Carroll says that, for some companies, having to do directional drilling might be a project “dealbreaker.”
“Any time you have to drill more hole than you absolutely need to exploit the resource that increases the cost,” he says.
The Roan Plateau amendment isn’t the only reason oil and gas producers are bitter. One provision within the energy bill would close down seven multi-agency offices in the West that were created to facilitate coordination between the BLM and other agencies and speed up the permitting process. And another bill, HR 2776, passed by the House at the same time as the energy bill, would provide tax incentives for renewable energy production and energy conservation, and would do away with the more than $15 billion in tax breaks awarded to industry as part of the Energy Policy Act of 2005. Instead, those funds would be used for conservation and renewable energy initiatives.
Environmental groups are generally pleased with the legislation. “There’s a real potential here for having a very good energy bill,” Alberswerth says.
The House energy bill calls for restoration of damaged lands. One provision would raise the price of reclamation bonds, which ensure that drilling companies have the financial wherewithal to repair the damage they cause to more accurately reflect the costs of cleanup. Another would levy a $1 per acre fee on idle leases. Of the 42 million acres of federal land leased for oil and gas production, only 12 million are producing.
“It’s a small fee and that would help discourage speculative holdings,” says Keren Murphy, a lobbyist for the Sierra Club. “The revenue would go to the BLM to help repair wildlife habitat.”
Efforts to curtail drilling in the West have broad support, but the bill has a long way to go before becoming law. The Senate passed its own energy bill in June that would not restrict drilling operations. Both bills contain controversial elements and lawmakers must hash out their differences to create a single bill that they can send to the White House, which the Bush administration has threatened to veto.
Still, Murphy is optimistic. “Energy is the topic of concern right now,” she says. “They don’t want to go home to say that they didn’t do anything on energy.”
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