Casper Star Tribune
Ranchers worry about rights with methane development
By Becky Bohrer
Associated Press
SPOTTED HORSE -- An unfamiliar pickup truck in this rural stretch of northern Wyoming's Powder River Basin stirs up questions like dust. And Mike Foate had plenty of them as he watched the two men step onto his ranch a few weeks back as though they owned the place.
In a way, he soon found out, they did.
The men were from a company that holds claim to gas reserves beneath Foate's Rocking Horse Ranch, a refuge for wildlife and even city slickers are willing to pay for the peace and quiet. The men were there to survey places to drill. The company, Foate learned, is gearing up for what many expect to be more full-throttle methane drilling in the Powder River Basin.
Foate felt sick as the words from the two men sank in. He ordered them off his land until he could talk to a lawyer.
"We just never realized that could happen," said Foate, who was unaware when he bought the ranch 10 years ago that the gas, oil or minerals underneath belonged to someone else. "How do you see that train wreck coming?"
The federal government is expected to lift a moratorium sometime early this year that has halted new drilling on federal gas leases for the past two years. Landowners like Foate, who have "split estates" on their property, are growing more worried they will be overwhelmed with demands from developers to provide access to the leases they hold.
A split estate is a common occurrence in the West in which a rancher owns the land or "surface rights," but someone else owns the minerals, oil or gas beneath it.
Foate knows he can't legally stop the company from drilling. But he warns he is not above a little civil disobedience -- even the risk of arrest -- if he feels it's necessary to protect his land and livelihood.
"With me, what you see is what you get," he says. "Predicting my nature or anybody's when their back's against the wall is hard to tell when it's something you care about. I could end up in jail."
Foate and his wife, Vivian, say they have considered outfitting their gates -- now closed loosely by chains to keep the horses they train from straying -- with bicycle locks.
The Powder River Basin covers some 8 million acres in northern Wyoming and spills into southeast Montana. It is a rugged landscape of craggy buttes and rolling prairie, under which lies rich deposits of methane, a type of natural gas trapped in coal deposits.
How that gas is tapped has been the focus of a lengthy feud pitting some landowners and environmentalists against gas developers and the federal government, which controls about two-thirds of the oil and gas leases in Wyoming's part of the basin.
Farmers and ranchers say the water released during the drilling process is often poor quality and can damage crops and vegetation.
The BLM in Wyoming stopped issuing new drilling permits in much of the state in August 2000 because of those concerns, and Montana ended all new drilling a few months earlier because of a conservation group's lawsuit.
In early January, though, the federal government released an environmental review of coal-bed methane drilling, recommending stronger protections for rivers and streams, but essentially clearing the way for tens of thousands of new wells.
What many ranchers fear is that having to give developers access to drill will mean new roads, mazes of power lines and large holding ponds on the range. And they wonder if the land they work will ever look the same once the companies leave.
Industry and government officials say there isn't cause for worry.
They expect development to be measured, dictated in part by the price of natural gas -- which has been lower in recent months -- and the cost of drilling. They also point to federal rules that they believe will affect the pace of drilling.
Among other things, companies must attempt to work with landowners first to devise plans for development, and negotiate rental payments or compensation for maintenance and potential damage to the property.
"We listen to landowners. And if what they want is within reason, we typically go with them," said Richard Zander, the assistant field manager for the BLM in Buffalo.
Bruce Williams, vice president of operations for Fidelity Exploration & Production Co., said there are tight regulations to ensure that gas is developed in an environmentally friendly manner and to guard against a land-rush mentality.
But landowners fear this dilemma: If they cannot or will not negotiate with the developer, the company can post a bond with the government instead. In a worst case scenario, they may get nothing upfront and have little ultimate say in where roads are built or wells are dug.
Near Gillette, rancher Eric Barlow's property already has about a half-dozen wells drilled by a company to tap state gas reserves under his land. He negotiated an agreement and is compensated for use of his property. Still, he said, the cash isn't worth the headaches, and he fears it's going to get even worse.
"I don't think we have any assurances," he says. "The bottom line for companies is, use what you need to use, to get what you need to get."
But for some landowners, especially those lucky enough to own the mineral rights on their property, coal-bed methane drilling has been a godsend.
Since development first took off in Wyoming five years ago, it has made plenty of landowners rich.
Rancher Joel Ohman was skeptical of development as first, but declares the experience a success -- positive and profitable -- even as he deals with nine different companies on his ranch near Gillette.
"It's a matter of realizing they're going to be there and trying to make the best of it," he says.
Cautionary tales flow just as freely. Ranchers talk of having hay meadows and range ruined by the often-salty water and of having difficulty getting companies to agree to terms ranchers demand. Others blame coal-bed methane drilling for causing their wells to dry up.
"Ranchers have to protect themselves against the worst case scenario. And when you do that, it really weighs on you and makes dialogue difficult," says John Heyneman, a rancher near Sheridan. Heyneman has negotiated on and off for about two years with a number of companies that want to develop gas leases -- none of which he owns -- under his property.
BLM officials insist there are safeguards in place to protect landowners. Their fears, BLM officials say, may be rooted more in the unknown than in reality.
"I think there's been much more made of the issue of landowner rights than there is," says the BLM's Paul Beels. "Landowners have been involved in the process since we started permitting out there."
Foate still hasn't made up his mind what he is going to do. He and his wife, Vivian, could negotiate with the company that holds the leases under his land.
But if they do, what demands can they make? How, he wonders, do you put a price on the overwhelming silence or on the business he could lose if methane wells colored the landscape?
"We talk about the what-ifs. But it's hard, because you've got so much of yourselves invested in the place," he says. "We don't want to move but there's always the chance, God forbid, that we say three or four years down the road, `We were so dumb. We should have moved."'