WASHINGTON, DC, May 16 -- Producers reaffirmed support for a US Department of Interior draft plan that downplays the environmental impacts of dramatically expanding coalbed methane (CBM) development in the Powder River basin.
"The BLM has issued a well-crafted, exhaustive analysis of the potential impacts of development of natural gas and oil resources in the Powder River basin," said Gary Davis, President of Redstone Resources Inc., Denver, and a member of the Independent Petroleum Association of Mountain States. "The BLM is applying appropriate mitigation measures to address those impacts."
The Powder River basin is a 4 million acre area in northeastern Wyoming and southeastern Montana. IPAMS said that the region could yield up to 40 tcf of gas if fully developed. Producers want to expand CBM development there but first must win necessary permits and approvals from the federal government. Within the Powder River basin there are already over 10,000 active CBM wells, and industry hopes to have about 51,000 wells drilled within the decade.
Producers defend the way existing wells have been drilled, saying the water from the fields is clean and suitable for irrigation. Water from fractured coal seams is usually discharged to the surface but is drinkable and can be used for crops, they say.
But according to the Wyoming Outdoor Council (WOC), an environmental group, deeper wells can create brackish water that could harm wildlife and limit crop irrigation. They maintain BLM is relying on outdated environmental data for its latest report on the basin.
WOC's arguments helped convince the Department of the Interior's Land Appeals Board on Apr. 26 to void three CBM leases in the basin owned by Marathon Oil Corp. Industry sources familiar with the case said BLM should have been more careful following the proscribed environmental review process before it approved the three leases; however, a bureaucratic snafu should not be an indictment for the entire CBM production process.
BLM can appeal the lease decision within 60 days or ask the Interior secretary to intervene. Marathon may also challenge the decision in federal court.
Environmental groups warn that if Interior chooses to overturn the decision, the fate of thousands of other leases could be tied up in court as well.
WOC said BLM is making the same mistakes with thousands of other CBM leases in Montana and several basins in Wyoming, Colorado, Utah and New Mexico.
"The potential ramifications of this decision are enormous," stated Tom Darin, WOC director of public lands. "BLM has known for years that leasing for CBM was illegal, [and] they admitted this to Congress in early 2000 and received an injunction from judges within Interior later that year.
"Yet, the Bush administration continued to lease for CBM at a frantic pace, while admitting once again in 2001 that its antiquated land use plans needed to be revised to account for CBM leasing and development."
Producers, however, say CBM development can and has been done in an environmentally responsible way. They also say that CBM potentially representing four times the amount of recoverable energy now locked away in the politically sensitive Arctic National Wildlife Refuge coastal plain.
"If not in the Rockies, then where?" noted one producer with ties to the region. "The environmental record is sound, and it's unfair that three problematic leases could stand in the way of US production."
But that's the message that—for now at least—the public may not be hearing, according to various surveys of public opinion that have been paid for by industry groups.
"Right now we are losing the public relations battle on this issue," noted one Washington, DC, oil and gas lobbyist that has covered the issue for years.
BLM is expected to issue a final report on expanding Power River basin development this November. Public comments on a draft environmental impact statement were due May 15.
BLM's earlier draft ran afoul of environmental groups and also caused some internal debate within the Bush administration. The Environmental Protection Agency's Denver office in March said it has serious reservations about expanding production in the area because of groundwater concerns. EPA officials said the discharge of enormous quantities of groundwater from coal seams would make surface water unacceptable for irrigation uses.
EPA is now in discussions with BLM about possible changes to the environmental analysis that could require producers to reinject water back into the well or treat wastewater from the wells before discharging it into streams.