Gas industry battles planet Earth

Jan Girand Record Staff Writer It is a classic case of industry versus environment.

A local independent oil and gas producer, Harvey E. Yates Company, or HEYCO, made a natural gas discovery in 1997. However, the Bureau of Land Management has restricted its ability to market it, according to HEYCO Vice President Steve Yates.

Oil and gas producers are voicing their concerns because the United States faces rising fuel costs due to fuel shortages. Natural gas is used to produce electricity.

On the other hand, BLM is mandated by law to conduct studies for a plan amendment any time there is new activity that might have an adverse impact on endangered species and grasses.

In 1998, large increases in oil and gas lease nominations prompted BLM to review their existing Resource Management Plan, said Pam Lueders, BLM Las Cruces field manager.

A scoping meeting, where the public shared their concerns, was conducted in November 1998, according to Lueders. She said 36 people attended. Three public hearings were then held at the beginning of the project. Those led to revisions, and then to these new series of public hearings.

The BLM invited the public to make comments on the first public draft of their amended proposal at the Sally Port Inn Tuesday night. About 35 people attended.

This was the first of three hearings slated, all of which are to be identical in format and purpose, according to the BLM.

The second hearing was held in the Otero County Courthouse in Alamogordo Wednesday night, and the third will be held at the Sierra County Commission chambers in Truth or Consequences tonight.

The hearings are on BLM’s drafted proposal affecting federally controlled fluid mineral resources in Sierra and Otero counties.

Lueders, and Tom Phillips, BLM Las Cruces land use planner and team leader of the proposal, were present and served on the panel at the Roswell hearing. Also present was Alan Ables, BLM public affairs officer from the Las Cruces field office.

The Roswell hearing was moderated by Stephen Spencer of the Department of the Interior Regional Environmental Office in Albuquerque.

The BLM has presented their Resource Management Plan Amendment, or RMPA, and Environmental Impact Statement, or EIS, in bound-book form, to the public for comment.

The BLM extended their deadline 60 days for public comments. Their deadline, originally scheduled for Feb. 20, is now set for April 23.

The impact area, Otero and Sierra counties, is located in south-central New Mexico.

BLM controls approximately 1.8 million surface acres and 5 million acres of fluid minerals within the impact area.

In their study, the BLM has said that the affected area has only low to moderate potential for oil and gas discovery.

The completed natural gas well with possibly good yield was made in southern Otero County, however. Lueders pointed out the location of this discovery on a BLM map during their open house prior to the hearing.

Lueders said this well has raised the possibility of a high oil and gas potential within some of the studied areas.

HEYCO is a major owner of this well, frequently called “the HEYCO discovery” by industry and BLM attendees of the hearing. Their partner in the well is Burlington Resources.

The legal name of this well is the Bennett Ranch Unit No. 1Y. It is located about three miles north of the Texas state line.

The well cost about $1 million to drill and has been shut-in ever since it was completed. That is because right-of-way for a pipeline to carry the product from the well has been denied by the BLM, according to Vernon Dyer, HEYCO land manager.

Its discovery has led to additional applications to drill, but the pipeline restriction has grounded them. Natural gas can only be transported by pipeline, Dyer added.

Steve Yates was the first scheduled speaker at the hearing. He expressed disappointment at the low attendance.

Yates said the BLM’s amended proposal would close the basin to future exploration. Of the three possible options or alternates proposed by the BLM, Yates recommended the “no action plan,” that each drilling permit be considered on a case-by-case basis.

Alternate A, said Yates, proposes no surface occupancy. Alternate B is “only more robust than Plan A.” It is “so onerous it would spell the end of it out there; no future exploration,” said Yates.

BLM’s suggestion to “explore” by “horizontal drilling” from the road “is silly,” said Yates.

Tim Gumm of Artesia, district supervisor of the Oil Conservation Division or OCD, said he was responsible for the regulation of oil and gas exploration within areas of the proposal.

Gumm said “we have serious reservations” with both plan A and B. Both would cause many restrictions of a recently discovered natural resource, seriously affecting New Mexico and the nation.

New discoveries are essential to meet the ever growing demands of the nation and to replace resources being depleted, Gumm stated.

Vernon Dyer was the third speaker. He said no surface occupancy around a well would create an impossibility, hindering discovery and production from the very start.

Until this recent discovery, most wells drilled have been dry holes, Dyer said. Proposal A or B would mean no leasing. Therefore, he proposed a review be made on a well-by-well basis.

“We think” a considerable quantity of gas is there. “Any other action would discourage any other development,” said Dyer.

Mark Murphy of Roswell, president of STRATA and also representing Independent Producers of New Mexico, was the fourth speaker.

He said the HEYCO discovery is “our poster child.” He proposed the “no action” option, or a strong industry involvement in the study.

The proposal needs geology “experts” to assist in the planning, said Murphy.

Murphy added that BLM is “looking backward instead of forward.” He said, “You need to be in the world with us.”

Gordon Yahney of Roswell, geologist for HEYCO, gave a geologist’s viewpoint of the area surrounding the discovery. He said geological finds indicate the Orogrande Basin containing the “HEYCO discovery” has high production potential. “With Alternate A or B, we won’t be there,” he said.

Ron Broadhead of Socorro, lead scientist of the N.M. Bureau of Mines, said the McGregor Range, which includes the resource area, has all the right components for oil and gas discovery. He said there is a tremendous reservoir potential in that area.

Brian Arrant of Artesia, with OCD, spoke of the geological impact this discovery could have on dwindling U.S. fuel supplies.

New Mexico received an extra $375 million in surplus this year alone from the oil and gas industry, said Arrant. Continued exploration would benefit New Mexico and the nation, he added.

Eileen Danni Day of Midland, Texas, representing Burlington Resources, HEYCO’s partner in the Bennett Ranch discovery, said she had participated as an industry representative in an earlier proposal draft.

However, she said, she was “flabbergasted” at the amount of “no surface occupancy,” which is the same as “no lease” in the amended proposal.

BLM’s primary concern with any new activity is the possible impact to endangered species and grasses.

http://www.roswell-record.com/archives/011101/news05.html

-- Martin Thompson (mthom1927@aol.com), January 11, 2001