Wyoming's powder keg

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A horse trade with industry

"If my (drinking water) wells that have been here since 1915 go dry," hay farmer Ackels says evenly, "I'm going to sue the bastards, if only so I can face myself in the morning."

Many frustrated ranchers have turned to the 1,000-member Powder River Basin Resource Council, created by a local rancher in 1973 to address the impacts of strip-mine development. The group is the lead environmental player in the basin on coalbed methane development; it supplies ranchers with information and has testified on Capitol Hill about the industry's impacts.

Although ranchers tend to view environmental groups skeptically, says council organizer Jill Morrison, her group works closely with the Lander-based Wyoming Outdoor Council on coalbed methane issues. The Wyoming Outdoor Council has filed suits charging that coalbed methane development is illegal because the BLM never planned for it, and that the state of Wyoming is violating the Clean Water Act when it permits the dumping of coalbed methane water. In mid-October, the Outdoor Council released its own plan for how best to balance coalbed methane development with other values, including landowner rights and environmental quality.

But even organized opposition hasn't made a visible dent in the energy industry. Drilling companies that have leased mineral rights are supposed to make deals with landowners to cover the costs of surface disturbance, but those surface-use arrangements are largely unsatisfactory, many ranchers say. Typically, drillers pay a one-time or annual fee of a few hundred dollars per well pad, plus fees, based on their length, for roads and pipelines. If landowners don't want to deal, drilling companies can get a court order to force access, although such legal actions are rare here.

Surface-use agreements can be a good deal for surface owners, says Terrell Dobkins, vice president of production for Pennaco Energy. The company, a subsidiary of Marathon Oil, has drilled 1,400 wells in the basin. In congressional testimony given last August before the House Subcommittee on Energy and Mineral Resources, Dobkins detailed a "representative" agreement with an unnamed rancher in which he claimed Pennaco will pay $110,000 this year for surface damage associated with 80 wells, and $80,000 per year after that. "This amounts to $390 per acre actually disturbed," Dobkins said.

Many ranchers dispute just how "representative" such a deal is. With approximately 80 coalbed methane companies working in the basin, the deals ranchers get range all over the map. "There's a huge, wide, incredible variation between the surface-use agreements that are made," says Mickey Steward of the CoalBed Methane Coordination Coalition. "It's a horse trade."

Good surface-use agreements have helped bail out some basin ranchers, many of whom are suffering financially from drought and low cattle prices. The real potential winners are those who own their mineral rights; they may earn tens of thousands of dollars per month in royalties.

"I'm all for it," says Jack Cooksley, a retired rancher who has seen 22 wells drilled on his land, which runs along Piney Creek, west of the town of Ucross. "I think anything you can develop in the country is good if it doesn't damage the country. The people who are against it are the people who don't own any of it, and the goddamn do-gooders."

Cooksley, who owns the mineral rights to his land, says he hasn't had any problems with the way drillers treated his property and isn't worried about the roar of a nearby compressor building. "Every time you hear one of those things," he grins, "they're going to talk money."

But Patricia Clark, who owns some of the minerals on her 50,000-acre T-Chair Ranch in the southern part of the basin, has spent $50,000 fighting a court battle with coalbed methane developer Wyoming Resources over an alleged breach of contract.

Clark expects to cut her cattle production by one-third as a result of the disturbance and loss of pasture. "If they produce big wells, it would probably more than compensate for the loss of the livestock," she says. "I have to wait and see what really happens."

Even Pennaco's Dobkins concedes that surface agreements can't fully mitigate the effects of coalbed methane. "Coalbed methane development is definitely an infringement on privacy," he says. "It is difficult for an operator to put a price tag on that privacy, so it can create a tough situation for both parties."

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