Understanding an oil group


 In 1995, during one of the never-ending controversies about federal management of oil and gas drilling, a prominent Western industry group made a radical suggestion.

The group -- the Independent Petroleum Association of Mountain States or IPAMS for short -- called for the end of federal land.

Diemer True, a Wyoming oil baron representing IPAMS, testified back then in a Congressional hearing that if the state governments took over all federal land, it "would lead to the overall reduction of government and (yield) economic prosperity for the Rocky Mountain Region." Another IPAMS spokesman echoed that radical call in 1995.

It's relevant today as IPAMS still claims to be the leading voice for the West's oil and gas industry. And IPAMS is still loud -- except now it's loudly resisting the Obama administration's efforts to reform drilling.

IPAMS' website, for instance, opens with a warning that "industry is facing an onslaught of federal legislation and regulations" even though oil and gas drillers are "impacting only 0.07 % of federal lands."

Many news stories highlight Interior Secretary Ken Salazar's reforms and IPAMS' complaints. Salazar says he's restoring "balance" after eight years of the Bush administration's relentless backing of oil and gas. For summations of the dispute, check High Country News and the Denver Post and the Center for American Progress. But most of the stories merely quote IPAMS without any background on the group.

So let this be a more complete reference describing the group.

Begin with the basic fact that IPAMS' resistance to federal regulations (and the whole idea of federal land) is an old refrain. Sifting through the history, apparently, since IPAMS was formed in 1974, the group has never met a regulation or a tax that it liked. In that sense, IPAMS is as hardline as the most hardline environmental groups on the other side of the spectrum.

IPAMS represents a sizable slice of the industry: "operators" -- investors who buy leases to drill land -- as well as drillers and well-service companies such as Halliburton in 13 states.

IPAMS implies that it represents small operators, but its board members include bosses of Encana (North American's largest natural-gas company), Questar (another giant), Anadarko (which operates in China, Africa, Brazil, Indonesia and Algeria as well as in the U.S.) and EOG Resources (whose net income in 2008 was $2.4 billion).

A few more highlights of IPAMS' history:

During 1979 and 1980, IPAMS opposed local governments' efforts to regulate where wells could be drilled within and near towns. The local governments -- along Colorado's Front Range and elsewhere -- were representing residents' concerns about drilling close to homes and schools. Around that time, a leaking gas well near Greeley, Colo., exploded and took out roughly a city block. Residents persuaded the city of Greeley -- not an environmentalist hangout -- to ban drilling within city limits. But the city lost a court battle as industry argued against the ban.

During the mid-1990s, IPAMS opposed other oil interests that wanted to build a big oil pipeline from Canada to markets in the U.S. Rockies. The pipeline's delivery of oil would've meant lower prices for U.S. consumers. IPAMS warned that the lower prices would be bad for its members (companies operating in the U.S. Rockies). IPAMS even sued the federal Bureau of Land Management trying to stop the pipeline.

In 1998, IPAMS again warned that low oil prices -- caused by a flood of imported oil from OPEC countries -- were bad for the U.S. industry and U.S. security. IPAMS called it a "crisis."

In 2000, IPAMS warned that expansion of a Wyoming coal mine (another form of U.S.-produced energy for U.S. consumers) might be bad for coalbed-methane companies (IPAMS members).

In the early 2000s, IPAMS hailed the return of high oil and gas prices, because again the high prices were good for IPAMS members.

During the eight years of George W. Bush's administration, IPAMS never complained as Bush and Vice President Dick Cheney (both former oilmen) reduced the Interior Department and the BLM to industry doormats. IPAMS thought it was fine, as Bush administration memos and political appointees made drilling the top priority in many areas of the West, ahead of all other land uses and any notion of conservation.

IPAMS opposed the widely popular bipartisan Public Lands Omnibus Bill that Congress passed last year, because IPAMS didn't like how the Omnibus included limits on drilling in the super-scenic Wyoming Range. IPAMS also didn't like the Omnibus ramping up two new systems for land protections (the BLM's National Landscape Conservation System and National Heritage Areas, which are around national parks).

IPAMS opposes Congressional efforts to address climate change with cap-and-trade and other limits in carbon emissions.

IPAMS also has opposed imports of natural gas from Canada and Russia (which would also be good for U.S. consumers).

I've summed up IPAMS as a "respectable one-dimensional organization."

To keep this balanced, IPAMS is pretty accurate when it says the free-enterprise system works well for locating oil and gas and developing new technologies. It's pretty accurate touting the industry's high-paying jobs and tax payments. It's pretty accurate saying that environmentalists are appealing and filing lawsuits against most oil and gas leases on federal land. It's pretty accurate pointing out that some companies are improving their environmental performance with low-emission drilling rigs, off-site habitat improvement and other measures.

But much of IPAMS' talk is not so accurate or respectable:

IPAMS promotes natural gas as a "bridge fuel" -- saying that gas burns cleaner than coal in power plants while better alternatives can be developed. That ignores the basic fact that burning natural gas still produces carbon emissions -- about half as much as coal does.

IPAMS warns that Salazar's reforms will cause higher prices for consumers of oil and gas. That's utter hypocrisy, because, as history shows, IPAMS has often taken positions that meant higher prices for consumers.

IPAMS blames Salazar for the idling of many drilling rigs. That ignores the meltdown of most sectors of the global economy, which has greatly reduced demand for oil and gas.

Most ludicrous is IPAMS' claim that oil and gas development occurs on less than one-tenth of 1 percent of federal land (about 470,000 acres). According to IPAMS' own calculations, that's just the area directly occupied by well pads, roads and other infrastructure. It doesn't include many impacts such as air and water pollution, scenery degradation, noise and lights, increased traffic in rural areas and indirect harm to wildlife. IPAMS executives don't build their houses near drilling rigs, and neither do sage grouse.

Soon, from March 1 to March 3, IPAMS will run its annual Washington Call-Up -- encouraging oil and gas companies to send representatives to D.C. to meet with Congress folks and journalists.

As IPAMS drums up publicity in the D.C. Call-Up and all its other action alerts and so on, everyone should keep in mind:

Despite IPAMS' high-flying rhetoric, IPAMS represents its members, period -- nothing more.

About Ray

Ray has been a Western journalist since 1979. He's now High Country News senior editor, based in Bozeman, Montana. He's earned national recognition including a George Polk Award for political reporting, a Sidney Hillman Foundation Journalism Award for investigating oil-field accidents, and an Investigative Reporters & Editors scroll for going undercover as a prison inmate. He's had three novels published.