FOCUS: EXPLORATION Rocky Mountain federal lands pose widespread access issues

Patrick Crow
Energy Policies Editor

A major lockup of land occurred last September, when President Bill Clinton issued an executive order establishing the 1.7 million acre Grand Staircase-Escalante National Monument in southern Utah.

The reserved area is bounded on the southeast by the Glen Canyon National Recreation area, on the north by Capitol Reef National Park, and on the west by Bryce Canyon National Park.

The 1906 Antiquities Act allows the President to use executive orders to protect unique American resources. Areas presidents have withdrawn are often later designated national parks.

Utah officials complained Clinton issued the fiat without any public hearings or comment. They said the action isolated about 200,000 acres of state school lands mixed with the federal lands and was partly intended to block a coal mine on the Kaiparowits Plateau.

A number of pre-existing oil and gas leases lie within the monument area totaling 100,000 acres, and the designation would prevent expansion of those fields.

Karyn Grass, executive director of the Independent Petroleum Association of Mountain States, said, "the most significant thing about Clinton's action is the precedent it sets."

Conservationists called Clinton's action the boldest environmental stroke of his presidency.

As he signed the order at a desk placed on the rim of the Grand Canyon, Clinton said, "Sometimes progress is measured in mastering frontiers, but sometimes we must measure progress in protecting frontiers for our children and all children to come."

The Western States Coalition and the Rocky Mountain Legal Foundation sued in Salt Lake City federal district court on Oct. 31, 1996, to block creation of the national monument.

The suit alleged Clinton lacked authority for his action under the Antiquities Act. It claimed action taken under the law must "be confined to the smallest area" needed to protect "historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest."

Utah wilderness

Also in Utah, the state won a federal court injunction blocking an Interior Department reinventory of BLM lands in Utah for possible designation as wilderness study areas.

Gov. Mike Leavitt ordered the state to seek the injunction and file suit. The injunction was granted, but the case has yet to go to trial.

Sens. Orrin Hatch and Robert Bennett, and Reps. James Hansen and Bill Orton also opposed the reinventory and pledged to work against it in Congress. Orton is a Democrat; Hatch, Bennett, and Hansen are Republicans.

Interior Sec. Bruce Babbitt ordered the reinventory of all 5.7 million acres not originally granted wilderness designation in the 1980s and said more than 5 million acres may qualify for designation. The study was due to be completed this spring.

After 15 years of studies, BLM had recommended 2.3 million acres be set aside as wilderness.

The Utah congressional delegation proposed legislation in the last Congress that would have designated some lands as wilderness, but the bills did not pass due to intense opposition by environmental groups which said they did not protect enough land from development.

Hatch and Bennett pushed a bill to the Senate floor that would have created slightly more than 2 million acres of wilderness on 50 parcels of BLM land in Utah. Former Sen. Bill Bradley (D-N.J.) led a filibuster that forced the bill to be dropped.

In the House of Representatives, the Resources committee reported a similar bill. It was not scheduled for floor action after it became apparent the Senate would not pass a bill.

Lewis & Clark

In Montana, the Rocky Mountain Oil & Gas Association is opposing the U.S. Forest Service's draft environmental impact statement for oil and gas leasing in the Lewis & Clark National Forest.

It said the EIS would permit "virtually no opportunity for exploration and production in high potential overthrust areas."

The group said, "More than 33% of the Lewis & Clark already has been withdrawn from leasing activities, including the Bob Marshall Wilderness, which encompasses over half of the most promising geologic structures for oil and gas.

"The minuscule acreage available for surface occupancy in the leasing scenario of the Forest Service's preferred alternative is in 1 mile corridors along existing roads in extremely limited areas. No access would be allowed to surface acreage beyond the corridors for any seismic or other exploratory activity."

Rmoga said although "no surface occupancy" areas beyond the corridors could be leased, companies would be unlikely to do so because of extensive restrictions on data gathering and drillsite locations.

It complained the draft EIS did not consider best available control technologies that would mitigate or eliminate environmental impacts, overestimated surface disturbance, did not mention closed mud systems and vapor recovery technologies, and did not calculate the economic benefits that state and local governments and private mineral owners would receive from oil and gas leasing.

Rmoga said, "It became evident the Forest Service and BLM staff in attendance (at EIS hearings) were unfamiliar with Montana oil and gas spacing regulations and the relationship between those spacing requirements and federal lands."

It said the Forest Service would limit drilling and development to 1% of the Rocky Mountain front, although operators have found more than 12 tcf of gas at Waterton field in Canada under similar geologic conditions.

Colorado wilderness

In Colorado, the BLM state office has made an interim decision not to issue leases in areas proposed for wilderness by environmental groups.

The action affects potential oil and gas activities on more than 200,000 acres of multiple use lands. Rmoga said the state BLM office decided to delay leasing pending clarification of a national BLM policy.

The office's interim policy does not allow new oil and gas leasing, new rights-of-way, or any action that involves granting new rights, pending completion of a national BLM policy.

And the BLM office said public hearings may be needed to determine whether affected land use plans need to be amended.

Oil groups complained that existing law requires a public process in compliance with the National Environmental Policy Act (NEPA) and the Federal Land Policy and Management Act when making land use decisions.

Rmoga said "This was not done when BLM sided with environmentalists to prohibit leasing in these areas." It had scheduled a meeting with Bob Armstrong, assistant Interior secretary for land and minerals, on the issue.

Green River basin

An advisory committee's recommendations regarding oil and gas activities in the Green River basin of Wyoming and Colorado have met with a reversal at the Interior Department.

Last year, Interior established the Green River Basin Advisory Committee (Grbac) to resolve environmental and industry conflicts and facilitate development of oil and gas resources.

BLM noted, "The natural gas resources within the Greater Green River basin probably represent the most significant onshore natural gas resource underlying primarily Federal lands in the lower 48 states."

The 17 member Grbac included representatives of the oil industry, environmental organizations, resource conservation groups, landowners, and state and local officials.

BLM stressed, "The committee is not a decisionmaking body or another 'layer of bureaucracy' to impede the BLM's decisionmaking process. The committee has no authority to impose new regulations or restrictions. Its function is strictly to advise Interior and BLM on how best to manage two world-class resources-natural gas and oil and unparalleled wildlife resources."

Last year Grbac unanimously agreed to submit three recommendations.

The panel urged Interior to streamline the environmental analysis process required under NEPA, allow operators eco-royalty relief for NEPA-related costs as well as mitigation and monitoring activities that exceed routine measures, and establish a road standard policy that would emphasize limiting road designs to a standard no higher than necessary to accommodate a project proposal.

But Interior ruled the eco-royalty relief recommendation conflicts with existing law.

Oil groups were working to reverse that preliminary finding. They argued that the Interior Secretary has broad discretion to implement such an innovative program.

The advisory committee was due to meet again and issue more recommendations. It is due to expire Feb. 28.

Wyoming air

Rocky Mountain producers also are concerned about an emerging issue concerning air quality in southwestern Wyoming.

BLM has approved an EIS for the Fontenelle natural gas infill drilling project that outlines a number of air quality mitigation measures, including specific air emission limits on well and compressor sites.

Also, BLM's Rock Springs district set an emissions cap for nitrogen oxides of 977 tons/year above existing levels. The cap will apply to all future permit authorizations.

Wyoming and a number of oil operators have protested that cap in an appeal to the Interior Department (OGJ, Nov. 4, 1996, p. 30). They allege that the state's Department of Environmental Quality, not BLM, has jurisdiction over air emissions. They also allege the BLM cap is arbitrary and would greatly restrict future oil development in the Green River basin.

The Southwest Wyoming Technical Air Forum has been formed to address potential impacts to air quality from resource development in the region.

The task force consists of representatives from the Environmental Protection Agency, BLM, Forest Service, state Department of Environmental Quality, environmental groups, local governments, landowners, and industry.

The task force will attempt to assess the impacts of resource development, including the monitoring of emissions, and determine allowable impacts. Its work is expected to take at least a year.

Express Pipeline

Wyoming independent producers have tried to block completion of the Express Pipeline, which could carry up to 172,000 b/d of Canadian crude from Hardisty, Alta., 785 miles to Casper, Wyo. (OGJ, Dec. 9, 1996, p. 24).

Alberta Energy Co. Ltd. and TransCanada PipeLines Ltd. report their 24 in. line is nearly completed. They plan to begin line fill in February and be in full service Apr. 1.

Express also will tie into the Platt pipeline, which moves Wyoming crude east to refineries at Wood River, Ill., and beyond.

The Independent Petroleum Association of Mountain States (Ipams) has said Express could flood the Wyoming market with crude and depress prices by up to $4/bbl.

Ipams, the Wyoming Independent Petroleum Association (WIPA), and others urged BLM not to grant Express rights-of-way across federal lands in Montana and Wyoming.

BLM ruled that since only 19% of the route crossed lands it manages, it was inappropriate to block the line and "discriminate against the import of Canadian oil, or to provide economic protection to a segment of the domestic oil industry."

After losing appeals within Interior, Ipams and WIPA asked a Federal District Court at Cheyenne to issue a preliminary injunction to block the pipeline, alleging BLM's environmental impact statement failed to consider the line's socio-economic impact. That suit is still pending.

Producers predicted the $2-3.75/bbl bonus on all grades of Wyoming crude will be eliminated as soon as Express is operational. They said Express was unnecessary because the three existing lines into the area had 80,000 b/d of available capacity.

BLM devolvement

Meanwhile, BLM has circulated to producing states and Indian tribes a proposal under which it would "devolve" its oil and gas inspection and enforcement, and environmental compliance responsibilities to them.

Congress and the Interstate Oil and Gas Compact Commission have been critical at how long it has taken BLM to forward that proposal (OGJ, Nov. 25, 1996, p. 33).

Currently, BLM administers federal leases and shares 50% of the royalties with the respective states, after administrative expenses are deducted.

States think they can perform those operations far more cheaply, resulting in more revenues for both state and federal governments after the 50% split.

Under its proposal, BLM would not require the states to adopt the federal regulatory program as long as the state programs achieve the same goals.

States would have to submit an annual inspection plan with BLM that would identify the program workload and the state resources needed to implement the program.

BLM would require the state inspectors to be certified through its inspection school, or a state school acceptable to BLM.

Although the BLM proposal only covers inspection and enforcement of leases, producing states have proposed that the agency devolve all of its oil and gas regulatory activities to willing states (OGJ, Apr. 1, 1996, p. 23).

Iogcc has argued that producers should be given a unified, one stop approach to regulation of their activities in producing states, where adjacent state and federal oil and gas leases can have widely varying regulatory requirements.

BLM is continuing negotiations with the oil and gas regulatory agencies in the producing states. Some observers expect initial BLM-state agreements to serve as a pattern for later ones.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.