Some examples of media generated by PXP's recent press release

NOT EVERYONE BACKS AGREEMENT

Company, groups reach Wyoming Range drilling deal

By MEAD GRUVER - Associated Press writer | Posted: Saturday, December 11, 2010 1:45 am | 1 Comment

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A fog bank fills the Hoback River valley as morning light hits the snow-capped peaks of the Wyoming Range. A company's plans to drill for natural gas in the area are the subject of controversy. (Mark Gocke/Star-Tribune correspondent)

CHEYENNE -- Two groups have announced an agreement with a petroleum company to retire nearly half of its controversial gas drilling lease acreage in the Wyoming Range.

The deal announced Friday would still allow Houston-based Plains Exploration and Production Co. to drill 136 gas wells from 17 well pads in the upper Hoback River drainage, as planned.

But the company would retire about 28,000 of its 64,000 acres of leases within the area protected last year under the Wyoming Range Legacy Act.

In addition, the proposed locations of two well pads would be moved away from the Hoback River. The company also would allocate $6 million over the life of the project for purposes such as monitoring water and air quality.

The Wyoming Outfitters and Guides Association and the group Wyoming Sportsmen for Fish and Wildlife announced the agreement with PXP a day after the Bridger-Teton National Forest released a draft environmental impact statement for the drilling project.

"They're setting the industry standard by taking the actions that they're taking today, and that's why we're part of it," Bob Wharff, executive director of Wyoming Sportsmen for Fish and Wildlife, said of PXP.

The release of the draft environmental impact statement opened a 90-day public comment period on the drilling. The lease retirement agreement would need to be incorporated into the final environmental impact statement and get U.S. Forest Service approval to go into effect.

The Wyoming Range Legacy Act signed by President Barack Obama last year prohibits future drilling on 1.2 million acres of the western Wyoming mountain range. Companies with existing leases retained the right to drill in an area covering 77,000 acres.

The companies include PXP, which has held the leases for the Eagle Prospect/Noble Basin project since 2005. The leases date to the mid-1990s.

"It's a valid right that they have to develop in there. Plains didn't have to go down this path. They could have just went on, on their own," said Gary Amerine, vice president of the Wyoming Outfitters and Guides Association.

"The reason they went down this path was to try to garner other support."

The agreement shows PXP's commitment to environmental stewardship, company spokesman Scott Winters said by e-mail.

Another group that was closely involved in the Wyoming Range Legacy Act, and has been following the PXP drilling proposal, was skeptical of the agreement.

"The bottom line is, this doesn't really do anything to affect the Noble Basin project. There's still going to be an industrial oil field in a place where we don't want one," said Dan Smitherman, spokesman for Citizens for the Wyoming Range.

Smitherman said it's unlikely that PXP would have wanted, or been permitted, to drill on the lease acreage proposed for retirement.

"So I'm not really sure that I see what the benefit is to the citizens of Wyoming, and particularly to the wildlife," he said.

Citizens for the Wyoming Range criticized the draft environmental impact statement in a press release, calling it "a bad deal for Wyoming" and "business as usual" that offers nothing different from PXP's original drilling plan.

PXP cedes Noble Basin, almost half its acreage


Modified: Monday, Dec 13th, 2010


 

 

 

 

When Plains Exploration & Production Company (PXP) first proposed an exploratory well project in Hoback Basin, it was met with a firestorm of public opposition.

So Bridger-Teton National Forest (BTNF) and PXP officials called together interested stakeholders for a sit-down.

A PXP official commented they were “willing to sit down and talk,” said Daniel outfitter Gary Amerine.

“I was the only one that called them back,” he said on Friday. Both sides decided to find out just what the other wanted.

As an outfitter, a founding member of “Citizens to Protect the Wyoming Range” and supporter of the late Sen. Craig Thomas’s dream to protect the mountain range, Amerine has since quietly helped hammer out “historic conservation opportunity” of compromises for the Hoback Basin natural-gas development project.

Two years of quiet meetings and private negotiations have given birth to the “Wyoming Range Conservation & Noble Basin Development Agreement,” announced Friday by Amerine, representing the Wyoming Outfitters and Guides Association (WYOGA), and Wyoming

Sportsmen for Fish and Wildlife (WSFS).

The massive effort brought together PXP, Gov. Freudenthal’s office, state agencies, permitted forest users, cattle ranchers, outfitters and recreational interests.

BTNF released its draft Environmental Impact Statement on PXP’s master development plan (MDP) Thursday; the agreement and terms came out Friday.

The terms sheet outlines PXP’s concessions for its proposed Eagle Prospect/Noble Basin Master Development Project (MDP) to develop its federal mineral leases.

The agreement is consolidated in a term sheet and letter sent to BTNF Supervisor Jacque Buchanan, signed by PXP Vice President Steve Rusch, Amerine and WSFW’s Bob Wharff.

The Sublette County Outfitters and Guides Association will sign this agreement at its next meeting, Amerine said.

“The portion of the BTNF and Wyoming Range that will be protected through this agreement is cherished by sportsmen throughout Wyoming and the country,” said outfitter-association president Terry Pollard. “Another great feature … is that it will yield the financial resources to study the moose herds in and around Hoback Basin.”

Amerine said the agreement is a “model for how the oil and gas industry and the sportsmen community can and should work together in sensitive areas.”

Key to developing a working relationship was mutual respect, spirit of compromise and “perseverance.”

“We started out miles apart and as time went by we came to the agreement you see today,” Amerine said. “Our hope is this document becomes part of the (BTNF final) EIS.”

The beauty of this thing is,” he added, “lots of these issues are dealt with prior to anything happening or going wrong unlike the Anticline and Jonah.”


Leases relinquished

PXP, which holds 63,550 acres of “valid mineral leases in Sublette County, would give up 28,000 acres – no strings or price tag attached – west and north of the Hoback River as a buffer between its development and land protected in the Wyoming Range Legacy Act.

“To promote compromise, prevent oil and gas development in a large section of the Wyoming Range covered by PXP’s valid existing leases, ensure that development in the areas adjacent to the Wyoming Range will be contained and enable PXP’s exercise of its valid existing rights, PXP, WYOGA and WSFA propose an agreement for preservation of a large area of the Wyoming Range and a controlled development of the Eagle Prospect/Noble Basin MDP,” it states.


Limited activity

PXP also agrees to limit exploration and development to a maximum of 136 producing wells “unless subsequent additional environmental review is completed.” It offers to “forfeit its right to petition to build more than 17 well pads on BTNF lands in its MDP project area.”

In addition, PXP will not seek approval to use the Upper Hoback River Road for access to its Eagle Prospect MDP or any other PXP leases in the area. The company agrees to coordinate with the Sublette County Public Works Department to develop a traffic management plan ” to minimize the impact of project-related traffic along the Daniel-Merna Road, Merna-North Beaver Road and other BTNF roads necessary for” its project.


Lease restrictions

“PXP agrees to adopt ‘Restricted Surface Occupancy; restrictions on certain leases near the Hoback River that are currently within the MDP area,” according to the statement. PXP would seek relocation of two proposed well pads to avoid disturbance in Noble Basin to wildlife migratory routes and historic permitted grazing.

The company also agrees to not try to renew expired fee leases near the Hoback River and “has not and will not participate in appeals of the BLM’s withdrawal of approximately 3,000 acres in leases for which PXP was the highest bidder in lease sales held in 2005 and 2006.”


Mitigation

PXP would create a $4-million fish and wildlife fund, put up $1.1 million for surface and groundwater monitoring, commit $400,000 to assist the state Department of Environmental Quality and set aside $250,000 each, for a Hoback Basin moose study directed by Wyoming Game and Fish and for community benefits in its project area.

It would establish a monitoring and advisory committee with county, G&F, conservation and ranch members to advise PXP on best management practices, monitor its activities and determine use of funds.

Further, PXP would implement design elements to reduce its environmental impact, such as locating permanent facilities 500 feet or more from perennial streams, using site-specific erosion control, building a liquids-gathering system, placing drilling mats and using “green completion” for completing wells, it says.

PXP also states it will collaborate with the Hoback Stock Association to “maximize the multiple use of (its) historic grazing activities … in a separate document.”

Association president Kevin Campbell said last week, “PXP has been very

sympathetic to our concerns and very generous in the concessions they have made. We greatly appreciate the fact that PXP has been understanding and open to our needs as fellow multiple users.”


What’s next?

Ryan Lance, chief of staff for Gov. Dave Freudenthal, said they were not involved in early PXP discussions after the first exploratory project came up.

But when PXP came back to the table in last fall, he continued, the governor asked state agencies to review the company’s proposals.

“The governor ultimately determined he wouldn’t be a signatory … and he is very adamant that the public engages in this as well.”

Lance said after an initial review, the governor’s office feels PXP has “done a pretty remarkable job of covering all the bases. …. This is a pretty significant effort by PXP to get to this point and we look forward to hearing from the public.”

Some people will be unhappy with the proposed agreement.

“Once they read this though,” Amerine said, “it might be eye-opening.”

“Some of those you can never mollify,” Lance agreed.

 

PXP agreement will benefit Wyo interests

Star-Tribune Editorial Board | Posted: Monday, December 13, 2010 12:00 am

The U.S. Forest Service should look favorably upon a landmark agreement that will help preserve the Wyoming Range by significantly containing oil and gas drilling. It should also be embraced by environmental groups that have expressed some skepticism about the plan.

On Friday, two groups -- Wyoming Sportsmen for Fish and Wildlife and the Wyoming Outfitters and Guides Association -- announced a deal with Plains Exploration & Production Company (PXP), an independent oil and gas company that has had leases in the Bridger-Teton National Forest in Sublette County since 2005. It plans to drill 136 gas wells in the Eagle Prospect/Noble Basin area.

While the Wyoming Range Legacy Act approved last year provided for the permanent withdrawal of much of the Bridger-Teton National Forest from future oil and gas leasing, the act protected existing leases like PXP's. Several environmental groups have urged the company to agree to a lease buyout to voluntarily retire some of their holdings.

Friday's agreement is an acceptable alternative to the lease buyout plan that would accomplish many of the same goals, while also earmarking money for environmental studies and other benefits.

PXP agreed to commit to permanently retire about 28,000 acres of its 64,000 acres of leases within the protected area in the forest. The company would also provide $6 million over the life of its project for a variety of uses, including air and water quality monitoring, community benefits, and a study to examine the health of moose populations in and around Sublette County. A total of $4 million would be spent on a fish and wildlife habitat fund to offset project impacts.

PXP agreed to drill its gas wells from a maximum of 17 pads in the upper Hoback Range drainage. The firm will seek permission from federal agencies to relocate two proposed pad locations to protect the surface of an additional 4,000 acres and to create a buffer along the Hoback River. PXP also agreed to several strict operational conditions, including installing equipment and facilities to minimize truck traffic in the area.

Gary Amerine, vice president of the outfitters group, said, "We put together what we believe is a model for how the oil and gas industry and the sportsmen community can and should work together in sensitive areas. The keys were perseverance, mutual respect for each other's ideas, and being willing to compromise."

Compromise is indeed important. While no one got everything they wanted in the agreement, a large area of land is being protected and the company agreed to minimize the impacts of the project.

Dan Smitherman, spokesman for another group, Citizens for the Wyoming Range, complained Friday that the deal doesn't change the fact that "there's still going to be an industrial oil field in a place where we don't want one."

"I'm not really sure that I see what the benefit is to the citizens of Wyoming, and particularly to the wildlife," Smitherman added.

Last Thursday, when the U.S. Forest Service released its draft environmental impact statement for the project, his organization blasted it as "a bad deal for Wyoming" and "business as usual." We don't disagree, but think the new PXP agreement has many positives compared to the alternatives offered in the draft EIS.

The company has agreed to keep the size of it project permanently contained. Grazing can co-exist with the drilling project. The portion of the forest that will be protected by the deal is considered prime summer habitat for elk, mule deer, bighorn sheep, moose and antelope.

Combined with funds for fish and wildlife habitat and environmental monitoring, the agreement is beneficial for Wyoming. It should get the backing of the U.S. Forest Service, and other companies with existing leases should consider any similar offers.