A look at the 28k acres PXP offers to retire
"The region's steep terrain and unstable soils would likely have made those areas unsuitable for drilling anyway."
OIL AND GAS: Industry cedes 28,000 acres of Wyoming Range for conservation (Thursday, December 16, 2010)
Scott Streater, E&E reporter
The developer of a natural gas field in southwest Wyoming's Bridger-Teton National Forest has agreed to significantly scale back its project to protect critical big-game habitat, a move welcomed by sporting groups and offering a possible blueprint for future drilling projects in sensitive areas across the West.
Plains Exploration & Production Co. would still drill as many as 136 natural gas wells on 17 well pads across a roughly 20,000-acre section of the national forest. But the Houston-based company has agreed not to apply for any additional drilling permits, regardless of the volume of natural gas discovered in the region, and to pay more than $6 million to protect wildlife habitat and monitor air and water quality in the area.
PXP agreed to these and other terms after more than two years of negotiations with two advocacy groups, the Wyoming Sportsmen for Fish and Wildlife and the Wyoming Outfitters and Guides Association. The groups remain concerned about the impacts of drilling on big game and fish, and in recent weeks PXP's drilling proposal had drawn criticism from Gov. Dave Freudenthal (D).
"With this agreement, we've given a company with an existing lease the opportunity to drill, and in return for that we got a substantial mitigation dollar amount," said Gary Amerine, vice president of the Wyoming Outfitters and Guides Association. "We view this is as a real win-win situation."
The agreement was announced last week -- one day after the Forest Service issued a draft environmental impact statement (EIS) for the project. Public comment on the draft runs through March 11, 2011. A final EIS should be issued by late spring, followed by a formal record of decision authorizing construction, officials said.
The draft EIS lays out a number of mitigation measures to protect forest resources, including restricting construction and operation activity in moose crucial winter range between November and April, and elk calving areas between May and June.
More than 28,000 acres in Wyoming's Bridger-Teton National Forest will be set aside for long-term conservation after Plains Exploration & Production Co., which holds drilling leases in the area, agreed to leave it untouched. Photo courtesy of the Wyoming Outdoor Council.
But the agreement between PXP and the two groups also includes a number of groundbreaking provisions that far exceed anything the Forest Service could require of a permitted developer.
Among these is an agreement by PXP to permanently remove from drilling 28,240 acres inside Bridger-Teton where the company has a valid drilling lease west and north of the Hoback River and to set aside a 4,000-acre corridor for big-game migration and livestock grazing.
In addition, PXP has committed to establish a $4 million Fish and Wildlife Habitat and Population Fund that would be used "to offset potential impacts to fish and wildlife habitat" caused by the project. And the company has agreed to pay $1.1 million for a study to establish baseline water quality data that can be used to determine whether the drilling activity is polluting groundwater.
PXP also agreed to pay $400,000 to help the Wyoming Department of Environmental Quality monitor air quality in the region. The project is in Sublette County, a heavily drilled section of southwest Wyoming that has been plagued in recent years by wintertime ozone pollution. Federal and state regulators have attributed the emissions of ozone-forming volatile organic compounds and nitrogen oxides to drilling equipment.
Amerine said the groups want the Forest Service to incorporate the terms of the agreement into its final record of decision for the project.
Bridger-Teton Forest Supervisor Jacque Buchanan said the agency would be open to such terms. "I couldn't come up with some of the things the company has agreed to, like retiring leases. That's not within my ability," Buchanan said. "So there are some very good opportunities that would come with that, and certainly we'll take that into due consideration."
A PXP spokesman said the terms of the agreement would be followed regardless of whether the Forest Service codifies the deal.
"We believe the combination of lease retirements, surface occupancy restrictions, and substantial financial commitment to habitat projects PXP is voluntarily prepared to make demonstrate our commitment to environmental stewardship, and will ensure the impacts of the project are kept to as minimal level as possible," the spokesman, Scott Winters, said in an e-mailed statement.
Questioning the terms
But some critics believe the agreement falls short of the protections needed for the 3.4-million-acre Bridger-Teton forest, whose combination of majestic mountain vistas, big-game wildlife and proximity to both Yellowstone and Grand Teton national parks make it one of the West's most iconic landscapes.
"We have serious concerns," said Dan Smitherman, a spokesman for Citizens for the Wyoming Range -- a broad coalition of residents and business owners whose members include Wyoming state Rep. Keith Gingery (R).
In contrast to Buchanan's view, Smitherman questioned whether the agreement requires PXP to do much beyond what the Forest Service would have required the company to do anyway, such as establish baseline groundwater quality data.
Plains Exploration & Production Co.'s proposed Eagle project would involve the drilling of 136 natural gas wells on 20,000 acres of the Bridger-Teton National Forest. Map courtesy of BLM.
In addition, while the group applauds PXP's commitment to retire the 28,240 acres, Smitherman said the region's steep terrain and unstable soils would likely have made those areas unsuitable for drilling anyway.
"That casts some suspicion on the merits of the agreement," said Smitherman.
But state leaders, including members of Freudenthal's staff who sharply criticized proposed mitigation requirements included in the Forest Service's draft EIS, warmed considerably to the proposal after the agreement terms were disclosed.
The governor's office is still reviewing the terms, said Ryan Lance, Freudenthal's deputy chief of staff. But on first glance, Lance said the measures appear to be "a far cry" from what was initially proposed as mitigation for the project.
Lance said PXP should be commended for listening to the concerns expressed by the governor and the sporting groups.
"They had every opportunity to say, 'Well, Governor, we appreciate that you have all these concerns, but we're pressing forward anyway,' and they did not do that," Lance said.
Supporters also say the agreement builds upon the Wyoming Range Legacy Act, sponsored by Sen. John Barrasso (R-Wyo.) and signed into law last year by President Obama.
That law permanently removed 1.2 million acres in and around the Bridger-Teton forest from energy development, but it grandfathered more than a dozen existing drilling leases covering roughly 120,000 acres, including those that PXP plans to use for its drilling plan, which dates to 2005.
Proponents of the agreement say the removal of 28,000 acres from the remaining portfolio of developable lands offers a blueprint for other firms that hold leases on sensitive public lands in the state, particularly at a time when public scrutiny is being focused on the impacts of oil and gas drilling on big-game species like elk and mule deer.
A study completed earlier this year concluded that mule deer populations on the nearby Pinedale Anticline have dropped to their lowest levels in nearly a decade, fueling concerns that intensified energy development in the natural gas-rich region has reduced the herd's crucial winter habitat (Land Letter, Oct. 21).
The mule deer decline coincides with a dramatic increase in drilling activity in the last decade on the 200,000-acre mesa. The Theodore Roosevelt Conservation Partnership last month announced it would challenge a U.S. District Court judge's decision to uphold a Bureau of Land Management plan to expand gas development and allow year-round drilling on the mesa that provides crucial wintering grounds for area mule deer and forage for sage grouse (Land Letter, Dec. 2).
Art of compromise
Work on the PXP deal began more than two years ago when the company expressed interest in working with the various stakeholders to devise a drilling plan suitable to all forest stakeholders.
In early 2008, shortly after PXP proposed developing a master plan for its 50,000 acres of forest, the Forest Service convened a meeting between representatives of industry, local government, environmentalists and sporting groups.
Amerine, the Wyoming Outfitters and Guides Association official, said PXP pledged early in the process that "everything was on the table and open for discussion," even as some groups opposed drilling of any kind on the range.
Amerine said he and another group contacted PXP weeks later and offered to enter negotiations.
In addition to setting aside the 28,000 acres and agreeing to pay a total of $6 million for wildlife habitat preservation, air and water quality studies, PXP is also giving the local community and state leaders a voice in how the mitigation effort is carried out.
Amerine said the agreement's implementation will be overseen by an advisory panel with representation from the sporting groups, the Forest Service, state environmental regulators and PXP officials.
"I think the end result is that maybe we've come up with a blueprint for future development not only for here in the West, but also elsewhere," he said.
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