October 2011
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Planning for a possible shale-gas boom on public lands

By Jim Mimiaga

Energy development on public lands has long been controversial. The San Juan Public Lands Center recently released a draft supplement to  its proposed revised land-management plan that is specifically oriented to planning for an anticipated boom in shale-gas extraction.A new type of drilling that separates natural gas from shale rock could create a flood of new wells and mineral leases in Montezuma and Dolores counties, including on public land.

The anticipated surge may be a windfall for the oil and gas industry as well as the local economy, but critics worry that allowing too much development sets up the region as a “sacrifice zone” that threatens human health and the environment.

At a recent public meeting in Dove Creek, Pam Leschak, a fluids geologist with the San Juan Public Lands Center, picked up crumbling black rock off a table and broke it open, releasing a distinct and recognizable gas odor.

“That’s the hydrocarbons locked up in this piece of Honaker shale,” she explained. “In this gas-play area, the gothic formation reaches 100 feet thick in places, which is preferred by drilling operators.”

The San Juan Public Lands Center has released a supplemental environmental impact statement on gothic-shale gas as part of its proposed master land-management plan and is seeking public comment through November. The gothic-shale gas play area stretches in a huge swath from Mancos through Dolores and up to Dove Creek, encompassing 1,000 square miles (646,000 acres) of Forest Service, BLM, county, state and private lands.

Public-lands officials admit that gothicshale gas was not on their radar screen, and that industry data on its potential prompted increased projections for gas development in the area.

“The previous plan did not consider the gothic-shale gas because we had no proposals for that – the technology was not there,” explained Mark Lambert, acting district ranger for the Dolores Public Lands Office, to a dozen citizens at the hearing in Dove Creek on Sept. 8.

“But because of public concern about shale gas, and interest in it from developers with new technology, we found ourselves with missing information and so we went back to address it.”

Multi-stage hydraulic fracking technology, a new and controversial process that uses water, sand and chemicals to release gas from underground rock – along with more perfected directional drilling – is expected to boost natural-gas development, according to public-lands officials.

In the past, such gas was typically drilled for only in geologic forms where it pooled between rock layers, something that does not happen as much within the proposed gothic shale area. Currently only 34 percent of the area is leased for gas development, but the new technique could open it up for additional leases.

The federal government owns mineral rights under public land and sometimes under private parcels (called a split estate). The BLM manages those rights and leases them to companies for drilling in exchange for a 12.5 percent royalty.

Multiple use or sacrifice zone?

The potential increase in drilling, or Reasonable Foreseeable Development (RFD) in agency-speak, has more than doubled in the area from the earlier estimates by the federal agencies.

The San Juan Public Lands Center has been working since 2006 on a revised version of its land-management plan. The original plan published in 2006 called for an RFD of 1,185 wells in the San Juan Public Lands planning area. Now the agencies say the potential for new shale gas could increase that number by 1,769 wells, bringing the maximum potential for new wells in the particular region to 2,954 wells, or 2 1/2 times what was previously predicted.

Montezuma County includes 56 percent of the gothic-shale gas play area and is projected to see up to 990 new gas wells, according to the report. Dolores County has 36 percent of the targeted gothic shale and could see an additional 637 gas wells.

Add in all of the pipelines, roads, well pads and other infrastructure (known as surface disturbance) required to get the gas out, and the footprint increases from 4,122 acres estimated in 2006 to an estimated 10,919 acres of disturbance under the new proposal, assuming full gas-field development.

The increase in potential gas development prompted the center to hold off on finalizing its revised management plan until a supplement could be written to address energy development.

The supplement notes that “the vast majority of the area . . . has a long history of multiple uses that are consistent with proposed leasing activity with little in the way of competing uses.”

That sentiment rankles environmentalists and landowners who may feel the “disturbance” of gas development more than others. During the presentation, Lambert noted that the area “has a history of extractive uses, logging, oil and gas, but very special places, such as the Dolores River, Mesa Verde National Park and wilderness study areas would be exempted” from oil and gas development.

“What about my house? I think it is a special place, are you going to protect me?” interrupted Sheila Wheeler, a landowner near the cross-hairs of gas-field expansion northwest of Dolores. “They are getting ready to put up wells near my home. What difference is my voice going to make? If it doesn’t, then this is just B.S. and you are just here to placate us and calm us down.”

Lambert responded that concerns are being considered, noting 18,000 comments were received and the original plan was redirected for three years to reanalyze where leasing should and should not occur.

“The last version of the plan was not adequate for water and air [quality protection], so we went back and put in additional protections and mitigations. It is not a process we take lightly,” he said. Once developers propose leases, more specific reclamation, operation rules and environmental analyses takes place as well, he said.

“What I want to know is, how do we change the status of this area as being a sacrifice zone for oil and gas?” Wheeler said. “Are we being experimented on here? I am talking about the home factor, clean air and water, not corporations making money.”

“It is not a sacrifice zone,” Lambert said. “These numbers are the potential. We are not expecting a huge boom because there are still a lot of aspect of the technology still being worked out.”

The oil and gas industry is one of the few business sectors with recent job growth, which hits home in economically challenged areas such as Montezuma and Dolores counties.

“It provides jobs that you need to buy food and stay healthy,” remarked audience member Kim Dullivan, to which Wheeler replied, “I grow my own food.”

‘Conflict of interest’

Gas wells interrupting the peace of rural life frequently spark resistance that simmers to the surface during public hearings. At another meeting by the Public Lands Center held in Cortez Sept. 14, discussion focused more on the impacts drilling has on local water and air quality, and human health and monitoring.

“Are you here to protect me, or oil and gas?” asked Joanie Trussel, a landowner near Mancos. “Is it a conflict of interest that you approve wells and receive royalties?”

“We have a mandate from Congress to lease federal minerals and also to protect human health,” responded Mark Stiles, San Juan National Forest supervisor. “We don’t see the money that comes in – it goes straight into the general fund.”

Officials emphasized that the draft supplemental EIS is in the public-comment and planning stages, and that no new leases have been requested or approved pending the complete environmental study.

“Is there some area in here that should or should not be leased? That is the first level of analysis,” said planning-team leader Shannon Manfredi at the Sept. 8 meeting. “For instance, we want to know from the public about areas with steep slopes or with cultural resources, or winter range for elk, or other sensitive species. We do not have a project on the table, but we are making a decision on what is available, so then the question becomes how to control the pace of that development, reclamation and design features. I would predict an increase in leases.”

Thirst for water

Natural-gas drilling and the hydraulic fracking process require a large amount of water – million of gallons per well – but where will it come from and what happens to it once it is used?

Leasing industrial water from McPhee Reservoir is one potential source, private ponds another.

“The developers will need to buy that water from somewhere and its availability could limit the potential development,” Manfredi said.

Leschak added that the industry is concerned about limited water resources “and it is very much in their minds how to do this with less water.”

Often developers of gas wells will have evaporative ponds on site to hold so-called produced water that flows to the surface from the drilling process.

“We would like to stay away from evaporative ponds because of surface-contamination issues,” Leschak said. “I’d like to see more emerging technology for using less water and better disposal.”

One solution may be mobile water-treatment plants, she explained. Containers are brought to the well and convert produced water into clean water. The concentrated waste is then shipped to containment centers such as the one near Naturita. Deep injection wells to dispose of water are another option, or using CO2 pressure for fracking instead of water.

“My concern is fracking fluid becoming stranded underground, where it goes into plants or contaminates water for wildlife and people,” Wheeler said.

Airshed concerns

The energy development overall in the Four Corners contributes to dangerously high levels of ozone pollution, a threat to human health and the environment. According to the EPA, coal-fired power plants and sprawling oil and gas fields in New Mexico have pushed ozone levels in the region right up to the allowable limit of 75 parts per billion.

To better measure air-quality impacts from a potential spike in new gas wells, pipelines and compressors in Montezuma and Dolores counties and the San Juan National Forest, the Colorado Department of Health and Environment has installed pollution monitors in Cortez and Norwood.

“There is no question that Southwest Colorado has some issues with visibility, in particular with nitrous oxide,” Stiles said. “The revised analysis of [gas] resources has prompted a new air-quality model, and having air monitoring in Cortez and Norwood will give us a new angle of information based on wind flows.”

A 200-page addendum to the supplement lays out proposed new standards and guidelines for protecting air and water. Debate over how rigorous the standards should be has already begun.

The study suggests that regulators may wait until 210 wells have been drilled before air-modeling efforts begin to address ozone emissions. Environmental groups, such as the local San Juan Citizens Alliance, prefer that “pollutants, including ozone generated by the development of the Gothic Shale field, must be addressed from the outset rather than waiting until an artificial threshold has been reached,” stated executive director Dan Randolph in a press release.

“With the area on the brink of exceeding the national standard for ozone, the time to address the issue of ozone toxicity is now, not after drilling hundreds or thousands of additional wells.”

Carefully planned phased development of new gas fields in the region is also a key factor to safe energy growth that better protects air and water resources, said Jimbo Buickerood, public-land coordinator for the alliance.

“Let’s take the example of northwest New Mexico, where oil and gas just kept rolling out and rolling out, and the area became overwhelmed,” he said in an interview. “We are on the cusp of this now and so we have a golden opportunity to work up a more sustained ramp-up where the negatives are minimized.”

Phased development is not favored by industry and is generally untested, Buickerood said, but the possibility that oil and gas development could come all at once makes it a good strategy to try.

In a nutshell, phasing would rely on certain triggers, such as numbers of wells, or amount of surface disturbance, or a certain amount of years that would stop or slow down development to allow time for well-site reclamation and environmental review before more wells are given the go-ahead.

“If the sweet spot for gothic shale is found, then it could really take off and there is nothing really prohibiting a worst-case situation where it is developed as fast as possible and all at once,” Buickerood said.

“Phasing allows for gradual ramp-up so that counties can prepare, so clean-up can be completed at well sites before moving on. Plus it spreads out the jobs and minimizes the boom-bust cycle common with oil and gas.”


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