Gas industry gambles on New Mexico mesa

OTERO COUNTY, N.M. - Looking out across the rolling hills of blue and black grama grasses that surround his southeastern New Mexico ranch, Charlie Lee can spot a car coming from miles away by the cloud of dust it kicks up. Smack-dab between Carlsbad and Las Cruces, and surrounded by a sea of Bureau of Land Management grazing lands, Lee's Hat Ranch is 70 miles from the nearest city and so off the beaten path that even the U.S. mail doesn't make the trek.

"I wouldn't trade it for anything," says Charlie Lee of his remote ranch life. A New Mexico senator in the 1980s, Lee has had plenty of opportunities to leave his home on Otero Mesa, but he has chosen, time and again, to stay. "I like the weather and I like the solitude."

Now, it looks as if Lee's quiet existence could become a thing of the past. In 1997, the Roswell-based Harvey E. Yates Company (HEYCO) discovered an estimated 1 trillion cubic-feet of natural gas under the surface of Otero Mesa, enough to supply one-twentieth of what the U.S. consumes in a year. With over 100 new lease applications from gas companies waiting for review, the local BLM office is hustling to develop new management regulations that will balance natural resource extraction with sound habitat protection.

But favorable market conditions and a friendly administration in Washington make protecting this seemingly unremarkable stretch of grassland in the Chihuahuan desert a challenge. In a draft plan released in October, the BLM selected a preferred alternative that leaves 68 percent of the mesa open to leasing, pleasing neither gas companies nor environmentalists.

While Otero Mesa may not have the visual grandeur of Montana's Rocky Mountain Front or Wyoming's Red Desert, environmentalists are nonetheless promising a fight. They see Otero Mesa as an early test of the Bush administration's resolve to open undeveloped and biologically important public lands to oil and gas development.

"It's not Yosemite Valley, and we're not going to get the nation going berserk to save it ... but it's one of the healthiest environments in the state," says Stephen Capra, media coordinator for the New Mexico Wilderness Alliance.

Riding the energy rollercoaster

Charlie Lee, who has lived on the mesa since 1957, is surprised by the recent hubbub. After watching most of the 10-15 wells drilled on the mesa in the last 30 years come up dry, he figured the area's oil and gas potential was low.

Energy experts say market forces have a lot to do with the current push to drill Otero Mesa. For the past decade, with prices stuck at one to two dollars for 1,000 cubic-feet of natural gas, companies haven't had an economic incentive to do wildcat exploration in new areas, says Ken Leonard of the American Petroleum Institute. But in January, the price jumped to $11. Even though prices are now down to approximately $3 per thousand cubic feet, Leonard says there is still enough economic incentive to gamble on places like Otero Mesa.

"It would be foolhardy to ignore large deposits of gas or oil that can be developed at a time when our demand is growing," says Leonard. He cites the Department of Energy's projection that U.S. natural gas consumption will increase 45 percent in the next 15 years.

But biologists say drilling will undermine Otero Mesa's ecological value. Lyle Lewis, endangered species chief for the local U.S. Fish and Wildlife, says the mesa is one of New Mexico's last three expanses of relatively unfragmented Chihuahuan desert grassland. That may sound like a mouthful, but for the last native herd of pronghorn antelope in the state, and for grassland-dependent species like endangered black-tailed prairie dogs and northern aplomado falcons, good habitat is becoming harder to find, Lewis says.

Roads, power lines, gas lines, well pads and increased traffic have fragmented other desert grasslands and led to declines in wildlife populations, says Steve West, director of the Chihuahuan Desert Conservation Alliance. West notes that in other areas where oil and gas development is widespread, invertebrate populations - the base of the grassland food chain - have crashed. That means less food for numerous animals.

But the BLM says its preferred alternative guards against fragmentation in areas of prime grassland habitat through a "no surface occupancy" stipulation. The stipulation, which covers 42 percent of the 280,000 acres of federal land on Otero Mesa, will limit development to within 150 meters of existing roads. This leaves 32 percent of the mesa entirely closed to drilling, says Tom Phillips, land-use planner for the local BLM. "There are so few roads out here, and we're trying to keep it that way," says Phillips.

"Our intent is to provide for both oil and gas development and natural resource protection," says Amy Leuders, BLM's Las Cruces field office manager. As for the mesa's remaining 164,000 acres of federal land, they will be designated as "open with stipulations," a provision that Leuders says will allow the BLM to responsibly manage oil and gas development.

Full speed ahead

Steve Yates, vice president of the company that drilled the test well, thinks the BLM's plan unfairly favors environmentalists. "Are we going to say we don't want to lose any plant or animal species? If it happens, nature did it, not man," says Yates when asked about possible impacts of oil and gas development on rare and endangered species. Yates believes the preferred alternatives' restrictions are too prohibitive. "This is non-park, non-monument, non-forest, non-wilderness, non-area of critical environmental concern," says Yates.

Otero County Commissioner Michael Nivison says the BLM's plan will unnecessarily limit gas development in a county that is 84 percent federal land, robbing the county of substantial revenue from the taxes, fees and rents that gas development would provide.

"We strongly support the development under existing laws and regulations," says Jim Hughes, legislative assistant for Congressman Joe Skeen, R-N.M. Hughes thinks the BLM's new "unreasonable regulations" will make drilling on Otero Mesa economically infeasible.

With increasing pressure from Interior Secretary Gale Norton to expedite oil and gas permits and re-evaluate current restrictions, it's possible that the oil and gas industry will have its way. Environmentalists think the BLM's final plan, to be released later this fall, may end up being less restrictive than the draft preferred alternative. "The question on the table is whether the BLM's proposal, which is modest in comparison to what they could do, will survive scrutiny from the Bush administration," says Pam Eaton, Four Corners regional director for The Wilderness Society.

As for Charlie Lee, he thinks the county, and the country, need the gas under Otero Mesa. But he worries about drilling's impact on water quality and abundance, and he wonders what drilling will mean for his son and grandson, who he hopes will enjoy the solitude and quality of life that he's had on Otero Mesa. Says Lee, "It will change our lifestyle, and it probably won't be for the better."

Laurel Jones is a High Country News intern.

YOU CAN CONTACT ...

• Steve West, Chihuahuan Desert Conservation Alliance, 505/885-3636;
• Tom Phillips, Bureau of Land Management, 505/525-4377;
• Steve Yates, Harvey E. Yates Co., 505/623-6601.

• Energy & Industry