August 1, 2011

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Energy Development in Utah

Gov. Gary R. Herbert sent a strong message to Washington during his State ...Read More

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Energy Development in Utah

Weighing the Costs and Benefits

Heather Stewart

August 1, 2011

But the BLM is not trying to thwart energy development, says Palma, who insists the agency is development friendly but that its focus has changed.

Palma explains that once leases have been auctioned off, companies must still go through a permitting process in order to drill each well. The permits are evaluated by the BLM and then screened for environmental impacts.

“There are several steps on the journey between somebody proposing to lease a parcel and when there’s actually a drill rig drilling for oil or gas,” Palma says. The applications to drill describe how trucks will access the drill site and, among other things, must account for archeological, wildlife, water and air impacts.

Palma was appointed to head the Utah BLM in May 2010, and he says he quickly realized that the BLM was not issuing enough drilling permits to keep companies working. So the agency has focused less on leasing new parcels and more on ushering applications to drill through the permitting process.

“The real employment isn’t at the leasing stage—that’s just a piece of paper. The real employment occurs at the drilling stage…That’s where people have jobs. That’s where semis are moving,” he says.

The numbers back him up. In 2009, the state had 1,170 applications for permits to drill, but drilling commenced on only 514 wells, according to the state Division of Oil, Gas and Mining. But in 2010, the state had only a slight uptick in applications—1,185—but drilling commenced on 975 wells.

Regulatory Nightmare
It would be difficult to dispute that energy companies face a regulatory nightmare in the Basin. Much of the land there is controlled by the BLM, but there is also state-owned, tribal and some private land. Energy companies must navigate a patchwork of overlapping agencies, both federal and state.

In addition to the BLM, companies may need to gain approvals from the U.S. Army Corps of Engineers, the Environmental Protection Agency, the state Department of Natural Resources and several of its divisions, the Department of Environmental Quality and county agencies, among others.

The tortuous process of winding through all of these agencies can take years.

Anadarko recently completed an environment impact statement for an additional 3,675 wells in the Greater Natural Buttes area—a major production increase that will bring hundreds of new jobs. “It’s been in the process about four years now, and that’s actually on the fast track,” says Miller.

His biggest complaint is that the various agencies don’t start working together early enough in the process. The BLM works exclusively on an impact statement for the first couple of years, he says. “After they get their draft done, they turn it over to all the different cooperating agencies.”

Then the EPA returns the document with comments and suggestions, as do the other regulatory agencies. “So it’s a sequential and extremely long process,” Miller says, adding that the agency requests may actually be in conflict with each other.

His suggestion is to get everybody working together from the get-go. “We’d like to do it early in the process instead of late in the process in a sequential manner.”

The complicated regulatory environment is causing companies to abandon the Basin for energy-rich areas on private land, says Lucero.

“One particular company had 10 permits approved when they had applied for hundreds in a month. You can’t do business that way,” she says. “Then they go to Williston, North Dakota, and they can do whatever they want, however they want, as fast as they want, when they want, basically. They still have to get some permits, but because it’s privately owned property, it’s much, much easier.”

A Delicate Balance
The Uinta Basin is an arid environment that supports several unique and rare species of plants, like the Uinta Basin Hookless Cactus. The region is home to Rocky Mountain sheep, mule deer, black bears and prairie dogs. Bird watchers come to see the bald eagles, Golden eagles, hawks and hundreds of other bird species.

Water is of prime importance in the dry climate, and several creeks and rivers flow through the Basin from the Uinta Mountains to the north. Many of these smaller rivers merge together and eventually feed the Green River and ultimately the Colorado River.

The Basin also contains a rich treasure of prehistoric fossils and the archaeological remains of at least two ancient cultures.

So it’s no wonder that many are concerned about the impacts of energy extraction on the landscape.

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