Buried Treasure

Some of the nation's most coveted energy deposits lie beneath some of its most cherished wilderness.

Two years ago in August, President Bush traveled to Sandia National Laboratory in Albuquerque, N.M., to enact the country's first national energy policy in more than a decade. "The Energy Policy Act of 2005 is going to help every American who drives to work, every family that pays a power bill and every small business owner hoping to expand," Bush said at the time. At a signing ceremony that day, the president and a bipartisan host of supporters in Congress speculated that the new law would bolster the economy, improve the environment and strengthen national security by reducing the country's dependence on foreign oil.

Nowhere have the law's ramifications been felt more keenly than in the West, where dozens of energy companies are drilling and operating thousands of new wells-with tens of thousands more in the works. Crews are building thousands of miles of new roads and hauling tons of supplies across rural landscapes, disrupting wildlife migratory patterns and local economies in a quest to quench the nation's insatiable appetite for energy.

Among other things, the law set in motion a range of tax incentives and regulatory changes aimed at expanding the domestic production of oil, natural gas and coal, the lifeblood of the nation's transportation, electricity and manufacturing sectors. While few would argue against reducing dependence on petroleum imports, the law is reshaping the West in profound ways, forcing policy-makers and land managers to confront hard choices.

"The current scale and intensity of energy development is unprecedented in many Western states, and experts predict this development will continue for several decades," says John Emmerich, deputy director of the Wyoming Game and Fish Department. "While many Western states truly have a world-class energy resource, much of the West also has a world-class wildlife resource and a wildlife-oriented culture that the states and the nation value very highly."

A 2003 federal inventory of onshore oil and gas resources estimated there are 138 trillion cubic feet of natural gas on federal lands in the Rocky Mountain region-that's enough natural gas to heat all the 55 million American homes that now rely on natural gas for 39 years. More than half of those deposits-83 trillion cubic feet-are in Wyoming. The Senate Energy and Natural Resources Committee, in a report published in August 2006 on the one-year anniversary of the Energy Policy Act, estimates that demand for natural gas will increase by more than 25 percent over the next decade.

Oil and gas production have long been a staple of the regional economy and energy companies by and large have received strong public support, but the pace of development since the Bush administration took office in 2001, accelerated by the 2005 law, is eroding that support. In Wyoming alone, there are about 44,000 wells in seven major oil and gas fields, the majority of them developed in the last decade; 55,000 more are projected over the next 20 years, says Emmerich. "From this activity, it is estimated that roughly 25 percent of Wyoming will experience direct surface disturbance or the effects of indirect wildlife disturbance caused by increased human, vehicular and development impacts associated with energy development," he says.

Oil and gas development is only part of the energy picture. An Energy Department inventory of federal coal reserves last month concluded that the Powder River Basin, which straddles Wyoming and Montana, contains 550 billion tons of coal-nearly 58 percent of the 957 billion tons assessed or analyzed to date on all federal lands. Not included in the study are 11.6 billion tons in the basin that the Interior Department already has under lease.

"Were it not for coal mined on public lands in the Powder River Basin, many of the houses in America would not be able to turn on their lights," says Mike Nedd, the assistant director for minerals, realty and resource protection at Interior's Bureau of Land Management.

Development Pressures

The bureau administers the mineral rights for more than 500 million acres of federal land. This includes land held by other federal agencies, such as the Forest Service, and by private owners who do not hold subsurface rights. Land management in the West is complicated by intermingled federal, state and private land ownership and by separated surface and subsurface rights. The agency reviews and adjudicates applications from energy companies to drill for oil and gas or mine coal and other minerals. It administers tens of thousands of leases, many of which support multiple wells.

The pressure on BLM has been enormous. In 2004, the agency received 6,979 applications for permits to drill; last year, it received 10,220. To reduce a long-accumulated backlog of applications and streamline the review process, the Energy Policy Act directed federal agencies to establish a pilot program to better coordinate the process for granting drilling permits. While BLM has primary responsibility for issuing permits, critical input is required from other agencies, including the Fish and Wildlife Service, the Forest Service, the Army Corps of Engineers and the Bureau of Indian Affairs. The law required BLM to establish seven pilot offices, two each in Wyoming and New Mexico, and others in Montana, Colorado and Utah. The offices are staffed with personnel from multiple agencies and funded by rental revenue generated by oil and gas leases.

Initially, BLM planned to hire 105 specialists with expertise in petroleum engineering and natural resources management and other areas, but the flood of permit applications from energy companies drove the staffing requirements up nearly 50 percent, to 150. Most positions have been filled.

The Senate report concluded that increased drilling has been a boon for the regional economy. The market for drilling rigs alone has increased 200 percent since 2000 to meet the demand for natural gas. Reducing the backlog by the end of next year could yield up to $20.4 billion in greater royalties and increased jobs, the Senate reported.

Not everyone is thrilled about increased energy production, however. In August, pressure from environmentalists and hunters angry about disruption to critical habitat for elk, mule deer, pronghorn antelope and sage grouse forced BLM to withdraw energy leases on dozens of parcels in Utah and Montana. Also in August, the Theodore Roosevelt Conservation Partnership filed suit against the Interior Department over drilling plans in an area called the Atlantic Rim in south-central Wyoming. The suit was particularly notable because members of the organization of hunters and anglers tend to be politically conservative, and many work in the oil and gas industry. "This suit is a major step for our organization, and not one we took lightly," says George Cooper, the group's president.

"The bureau has been criticized for approving a lot of drilling permits, but the basic problem is that Congress has been putting pressure on the bureau and giving them money and the direction to do it," says George Lea, a former BLM manager now president of the Arlington, Va.-based Public Lands Foundation, a nonprofit group dedicated to the professional management and protection of federal lands. "The bureau can't tell [Congress] to go to hell.

Congress doesn't really give the bureau a lot of choice. It's a really tough job to balance these issues."

The Great Divide

Conflict over the best uses for public land is inevitable, especially when critical wildlife habitat coexists with critical oil and gas reserves. Historically, the conflict has been between environmentalists seeking preservation and energy companies seeking fortune. But as the West has evolved into a major travel destination for outdoor enthusiasts and other tourists, and as development has pushed hunters and anglers out of beloved territory, more voices are joining the chorus of restraint.

"There's always a lot of contention where people are vying for the same piece of ground," Lea says. "Most environmental groups are protectionist-they don't want to see use other than preservation." He believes conservation groups like the Theo-dore Roosevelt Conservation Partnership offer an important counterbalance to oil and gas interests and will increase the pressure on BLM to consider public interests more broadly-but only if the agency receives significant support from lawmakers.

The lawsuit filed by the partnership came in response to BLM's authorization of 2,000 new oil and gas wells, along with an estimated 1,000 miles of roads and 1,000 miles of pipeline to support those wells. In its environmental impact statement evaluating the project, BLM acknowledges that "the natural setting would be converted to an industrialized setting by development."

The project is particularly sensitive because it involves coal-bed methane gas extraction, a process that produces enormous amounts of low-quality groundwater. Coal-bed methane gas is extremely attractive to energy companies because it is accessible at shallow depths and relatively inexpensive to produce. Because the gas exists wherever there is coal, and coal deposits are well documented, discovery costs are low as well.

But the water produced by the process of extracting the gas typically contains high levels of salt and sediment, making it unsuitable for irrigation or consumption by either animals or humans. Releasing the water into natural streambeds threatens trout and the bugs on which they depend. Reinjecting the water back into the coal beds may contaminate wells and natural springs. Further complicating the issue is that states, not BLM, regulate the water produced during gas production.

The partnership's lawsuit contends that BLM failed to consider a reasonable range of alternatives to intensive development, including a more measured approach that would maintain fish and wildlife populations. The partnership's energy initiative manager, Steve Belinda, says, "We see a federal agency acting on behalf of only one user group: the energy industry."

While BLM disputes that charge, the agency is taking steps to blunt criticism and address conservation issues. Earlier this year, BLM, Fish and Wildlife Service, U.S. Geological Survey, Forest Service, Bureau of Reclamation and two Wyoming state agencies proposed the Wyoming Landscape Conservation Initiative, a joint program aimed at maintaining the state's wildlife and habitat in the face of energy development. Through the initiative, members will monitor species and habitat, promote the best reclamation and mitigation practices in areas being developed, and make special effort to enhance sagebrush, mountain shrub, aspen and riparian communities.

Healthy Lands Initiative

The Wyoming Landscape Conservation Initiative is part of a broader program Kempthorne introduced earlier this year to more effectively manage energy demands along with other interests. In a teleconference with reporters in April, Kempthorne said the Healthy Lands Initiative would provide an interagency mechanism for balancing sometimes conflicting goals. "BLM faces tough challenges in carrying out its multiple-use mission in today's fast-changing West, where demand for public land uses and products is at an all-time high," he said.

Interior officials say despite the criticism, some of the recently developed land use plans have been among the most restrictive ever developed for oil and gas leasing on federal lands.

Henri Bisson, deputy director of BLM, cites the resource management plan for oil and gas development in Otero and Sierra counties in south-central New Mexico as an example of how the bureau is balancing energy development with resource management in an environmentally responsible way. In testimony before the House Natural Resources Subcommittee on Energy and Mineral Resources last spring, Bisson described how BLM will monitor activity to allow a maximum surface disturbance of 1,589 acres from well pads, roads and pipelines. While that might sound like a lot of land, it's less than one-tenth of 1 percent of the total surface area of 2 million acres. At most, 141 exploratory wells will be drilled, resulting in up to 84 producing wells. Additionally, 36,000 acres of grasslands mostly likely to serve as habitat for the endangered Aplomado falcon will be closed to leasing and permanently protected.

The new plan amends one from 1986 that would have allowed leasing with few restrictions on oil and gas activities and would not have provided the protections for grasslands and other sensitive areas developed in the current plan, Bisson said.

While administration officials contend BLM is moving toward a more balanced approach, that might not be enough for members of the Theodore Roosevelt Conservation Partnership. In the words of the group's namesake, delivered at the convention of the National Progressive Party in Chicago in August 1912: "We do not intend that our natural resources shall be exploited by the few against the interests of the many. . . . Our aim is to preserve our natural resources for the public as a whole, for the average man and the average woman who make up the body of the American people."