Antidevelopment environmentalism, in addition to blocking producers'access to federal lands, is taking its toll on oil industry activity in the Rocky Mountains.
Industry officials heard expressions of concern in a variety of environmental areas at Rocky Mountain Oil & Gas Association's annual meeting earlier this month in Denver.
A demonstration of the problem came during the meeting, when Amoco Oil Co., citing the need to invest $150 million on environmental projects at its 41,000 b/sd Casper, Wyo., refinery the next 10 years, announced it would instead close the plant.
Refining managers at the Rmoga meeting privately noted that closure of the Casper plant will bring distillation capacity into rough balance with Rocky Mountain demand. But some expect the burdens cited by Amoco to force closure of at least one more small refinery in the region.
An example of the environmental costs refiners face came during state reports when Jim Peacock, executive director of the Utah Petroleum Association, predicted compliance with a state implementation plan for particulate matter alone will cost refiners $75100 million. Utah has six refineries with total crude capacity of 160,400 b/sd.
A new upstream environmental threat is brewing in Colorado, where the state supreme court decided in June to review two cases involving county control over exploration and production operations. Lower courts had upheld industry claims that counties'jurisdictions are limited by laws giving the authority to the Colorado Oil and Gas Conservation Commission. Industry officials fear counties would try to restrict or block exploration and production, as some have in the past. The supreme court is to rule on the cases next year.
Bill Owens, executive director of the Colorado Petroleum Association, said the cost to producers if the state's 63 counties gain primacy in oil and gas matters could reach "hundreds of millions of dollars."
Industry, he said, could seek corrective legislation if the supreme court rules against it.
Other environmental challenges with which the Rmoga states, like their counterparts elsewhere, are grappling include spill control, underground storage tank regulation, hazardous waste management, and air and water quality requirements.
LAND ISSUES
Access to federal lands, an issue in which Rmoga plays a leading advocacy role, remains limited in the Rockies.
Fernando Blackgoat, chairman of Rmoga's lands committee, said acreage under oil and gas lease in national forests has shrunk by more than 65% since 1985, when the U.S. Forest Service began a leasing moratorium in some forests. The shutdown now affects nearly all forests.
Blackgoat, exploration regulatory affairs analyst for Exxon Co. U.S.A.'s onshore exploration division, said companies holding Forest Service leases often cannot conduct drilling and development activities on their acreage because of lease stipulations and permitting problems.
He attributed the leasing stalemate to Forest Service claims that past leasing decisions have been made without adequate environmental analyses. Recent court decisions conflict on questions of adequacy of environmental documentation.
Rmoga is trying to help the Forest Service correct deficient forest planning documents. Its main concerns, Blackgoat said, are that:
- The service not yield to pressure for "excessive or unnecessary analyses."
- Required environmental analyses be conducted expeditiously.
- Leasing decisions be based on accurate predictions about likely activities and their environmental effects.
- The service make decisions about lands available for lease and decisions to lease specific lands in the same environmental document.
Blackgoat reported the Forest Service has approved a rule deleting a provision in its oil and gas leasing rules that included "roadless lands" in a list of off limits areas. Rmoga, which has been seeking the change for 18 months, argued the prohibition wasn't authorized by statute.
Rmoga also is concerned with proposed Forest Service forest plans that would give little direction to forest managers on resource issues and make no management decisions specific to resources.
Blackgoat repeated a warning about issues of "biological diversity," which environmentalists increasingly raise in their campaigns to stop development. He called the tactic a "serious threat to multiple use of public land."
Of three wilderness bills under consideration in Rmoga states, only one-Colorado's-has a chance for enactment, Blackgoat said. A Senate bill by Republican Hank Brown and Democrat Timothy Wirth would add 748,000 acres to the Colorado wilderness lands, which cannot be leased or developed.
Environmentalists oppose the bill, the result of a compromise denying a federally reserved water right for water flowing through wilderness areas. Most of the Colorado acreage is in headwater areas. Environmentalists dislike the precedent that the compromise might set for future wilderness areas downstream of water sources.
Wilderness bills also are under debate for Montana and Idaho.
Blackgoat said the Bureau of Land Management (BLM) is to complete its study of candidate wilderness lands and soon will make its recommendations to the secretary of the Interior.
Rmoga hopes to persuade Congress to provide for permanent release of nonwilderness lands to multiple use other than wilderness. Current legislation releases lands from wilderness study for one round of forest planning and doesn't release nonwilderness land to development.
ANSWERING ENVIRONMENTALISM
Also at the Rmoga meeting, Mountain States Legal Foundation President William Perry Pandley challenged the agenda science" that drives much environmental politics and criticized the Bush administration for being too willing to compromise with extremist positions.
"People on the other side think they have the right to stop anything, anywhere," declared Pandley, who also is the foundation's chief legal officer. He assailed recent large Forest Service and BLM budget increases for land acquisition.
Dixy Lee Ray, a scientist and former governor of Washington, echoed Pandley's concerns about advocacy science. Citing a "radical and tragic departure from the long and honorable history of objective science," she challenged the theories on global warming and upper atmosphere ozone depletion on which much environmental policymaking is based.
Ray assailed "scare stories" advanced in order to promote policies and regulations. The Environmental Protection Agency used the strategy with asbestos, requiring huge expenditures to remove the substance from schools-outlays Ray said was unnecessary.
"Politicized science is bad science," she said. Yet many scientists, fearful of losing research funds, won't challenge extremist science that has become conventional wisdom.
"If we believe in technology," Ray said, "if we believe that industrialized society has improved our quality of life which, indeed, it has-then it is up to us to defend it far more vigorously than we have in the past."
W.W. Ballard, Rmoga president and president of Balcron Oil Co., Billings, Mont., said common sense has been "swept aside by radicalism and extremism" and challenged the idea that not enough petroleum remains in the U.S. to warrant compromising environmental values.
He recommended Rmoga hire a full time staff member to handle environmental public relations. He also called for a study of the constitutionality of laws that deny multiple use of federal land.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.
