appeal deciding officer recommendation, wyoming...
TRANSCRIPT
PETER I. WOLD
March 17,2011
WoLo OIL PRoPERTIEs, INC. MO)PfrZSMINERAL RESOURCE CENTER - SUITE 200
39 WEST SECOND STREET
CASPER, WYOMING 62601JACK WOLD
TELEPHONE (307) 255-7252
FAX (307) 265-7336
E-MaIl: wop(@woldoilcorn
www.woidoil.com
Appeal Deciding OfficerRegional ForesterIntermountain Region USFS324 25th StreetOgden, UT 84401
SENT VIA FEDEX - OVERNIGHT
Re: Appeal of Record of DecisionOil & Gas LeasingWyoming Range, Bridger-Teton National ForestSublette County, Wyoming
TO WHOM IT MAY CONCERN:
Enclosed please find the Appeal from Wold Oil Properties, Inc. for filing in the above-referencedmatter. Please stamp the extra cover page enclosed and return to me in the enclosed, preaddressed stamped envelope for our file. Thank you in advance for your consideration. If yourequire anything further, please advise. I am,
Kevin P. MeenanLand Manager
Enclosures
cc: Jacque Buchanan, Forest Supervisor
DENVER OFFICE:1775 SHERMAN STREET
SUITE 1700DENVER, COLORADO 80203
TELEPHONE: (303) 831-0575FAX: (303) 831-0607E-mail: [email protected]
APPEALOF
U.S. FOREST SERVICE RECORD OF DECISION - OIL & GAS LEASiNGWYOMiNG RANGE, BRIDGER-TETON NATIONAL FOREST
SUBLETI’E COUNTY, WYOMING
COMES NOW WOLD OIL PROPERTIES, INC. (“WOPI” or “Appellant”), aWyoming corporation, by and through its President, Peter I. Wold, and pursuant to 36 CFR 215,does hereby submit its Appeal of the Record of Decision (“ROD”) by Jacque Buchanan, ForestSupervisor, (the Responsible Official), dated January 25, 2011, wherein the U.S. Forest Serviceselected Alternative 1 of the Final Supplemental Environmental Impact Statement examining Oiland Gas Leasing in the Wyoming Range NOT authorizing the Bureau of Land Management(“BLM”) to offer 35 lease parcels located within the Wyoming Range, Bridger-Teton NationalForest, Sublette County, Wyoming. In support of its Appeal, WOPI states and alleges as follows:
PRELIMINARY MATTERS
1. WoId Oil Properties, Inc., (“WOPI”) is a Wyoming corporation, whose address is: 139West 2’ Street, Suite 200, Casper, WY 82601 and whose telephone numbers are: Main —
(307) 265-7252; Fax — (307) 265-7336.
2. WOPI submitted timely substantive written comments on March 17, 2010 to the DraftSupplemental Environmental Impact Statement (DSEIS), Oil & Gas Leasing in theWyoming Range Withdrawal Area of the Bridger-Teton National Forest, (the basis of theResponsible Official’s Record of Decision), and so has standing to file this Appeal. Acomplete copy of those comments are attached hereto as Exhibit “A” and incorporatedherein.
3. The Record of Decision is dated January 25, 2011 and was made by the ResponsibleOfficial (“RO”) Jacque Buchanan, Forest Supervisor, Bridger-Teton National Forest forthe Final Supplemental Environmental Impact Statement evaluating whether the U.S.Forest Service (USFS) should reverse its previous decisions allowing oil and gas leasingwithin portions of the Bridger-Teton National Forest, Wyoming Range, Sublette County,Wyoming.
4. The Record of Decision was published in the Legal Notices of the Casper Star-Tribune, aWyoming statewide newspaper of record, on February 5, 2011, so that the forty-five daytime period for filing Appeals ends on March 22, 2011, pursuant to 36 CFR 215.15.
5. That this Appeal is filed pursuant to 36 CFR 2 15.11(b) and is directed to the RegionalForester, who is the Appeal Deciding Officer identified in the ROD and whose address is:Appeal Deciding Officer, Intermountain Region USFS, 324 25th Street, Ogden, Utah84401.
Pagelof7
BACKGROUND
Appellant was the successful bidder for two leases (“Disputed Leases”) offered at the August 1,2006 BLM Lease Sale: WYW-173279 and WYW-173280. These leases (Bid Parcels 189 & 190)are located in T29NR1 15W, inside the Bridger-Teton National Forest and just within the easternboundary of the Wyoming Range Withdrawal Area (“WRWA”) established in Section 3202 ofthe Omnibus Public Land Management Act of2009. See the map attached hereto as Exhibit “B”and incorporated herein, and the maps included in the Final Supplemental Environmental ImpactStatement (Figure 1.1-Wyoming Range Withdrawal Area, FSEIS p. 1-4 & Figure 1.2-ProspectArea Map, FSEIS p. 1-7). The two disputed leases are depicted in Figure 1.2 on the South PineyCreek drainage.
As noted in the Record of Decision, the BLM suspended issuance of the two leases along withother leases issued in the August 2006 lease sale. In August 2009, the State of Wyoming BLMDirector rejected Appellant’s successful bids and sought to refund the administrative fees, bonusbids and first year rentals that Appellant had already paid. WOPI appealed the action of the StateDirector to the Interior Board of Land Appeals (IBLA). On April 29, 2010 the IBLA ruled inAppellant WOPI’s favor holding that the Wyoming BLM’s decision to reject WOPI’s successfulbids “lack[ed] a rational and defensible basis”, overturned the BLM’s decision and remanded thecase to the BLM for “further adjudication of WOPI’s competitive oil and gas lease bids forParcels 189 and 190. (IBLA 2009-316, Final Order). The BLM continues to hold the leasespending issuance awaiting the Supplemental Environmental Impact Statement for Oil & GasLeasing in the Wyoming Range from the U.S. Forest Service.
Because WOPI’s two lease parcels could be impacted by the Draft Supplemental EIS proposed,on March 17, 2010, Appellant WOPI submitted its written substantive comments on the DraftSupplemental EIS to Julie L. Weaver of the Wyoming BLM and to Carole “Kniffy” Hamilton ofthe USDA Forest Service. The Record of Decision that is the subject of this Appeal was issuedon January 25, 2011 and published on February 5, 2011.
ARGUMENT
I.
Appellant disagrees with the ROD’s conclusions that a complete prohibition of leasing in theWyoming Range Withdrawal Area (“WRWA”) is the only solution to address the concernsraised in the FSEIS. The RO relies heavily on the Wyoming Range Legacy Act to justify thechoice of Alternative 1. The ROD states: “In March of 2009, the Omnibus Public LandsManagement Act (Subtitle C) designated the ‘Wyoming Range Withdrawal Area” withdrawingfrom availability for oil and gas leasing most of the Range with the exception of valid existingrights. It also provides the opportunity for repurchase of those rights and rights and retirement ofexisting leases. This Act reflects strong public sentiment for protecting the existing values of theWyoming Range described above.” (ROD p.9). While it is true that the Act restricted much of
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the WRWA from oil and gas development, the ROD arbitrarily ignores express provisions of thelaw that directly apply to and would allow development of Appellant’s disputed leases.
Specifically, Section 3202 (e) -PRIOR LEASE SALES states:
Nothing in this section prohibits the Secretary from taking any action necessary toissue. . .remove the suspension of.. .a lease, or any sold lease parcel that has notbeen issued, pursuant to any lease sale conducted prior to the date of enactment ofthis Act (emphasis supplied).
Also, Section 3202 (f)- EXCEPTION gives the Secretary of the Interior specific authority tolease within the WRWA so long as the resources are within one (1) mile of the WRWAboundary and contain the following conditions:
(1) The lease may only be accessed by directional drilling from a lease held byproduction on the date of enactment of this Act on National Forest Systemland that is adjacent to, and outside of; the Wyoming Range Withdrawal Area.
(2) The lease shall prohibit, without exception of waiver, surface occupancy andsurface occupancy and surface disturbance for any activities, includingactivities related to exploration, development, or production.
(3) The directional drilling may extend no further than 1 mile inside the boundaryof the Wyoming Range Withdrawal Area.
These provisions are noted in Alternative 4 of the FSEIS, but brushed aside by the RO. Further,as noted in its submitted comments, Appellant is willing to accept the restrictions of theWyoming Range Protection Act as lease stipulations. (See Exhibit “A”). Yet the RO rejectedthese comments, as well. Appellant believes that its ability to strictly comply with theserestrictions differentiate its disputed leases from any other leases that would also be denied bythe ROD.
Appellant’s two disputed leases, while within the WRWA, border the WRWA’s easternmostboundary. Most significant, they border the western boundary of two active oil and gas units:ExxonMobil’s Lake Ridge Unit and North Lake Ridge Unit and are near other units and leases inwhich Appellant has a working interest. (See Exhibit “B”). As contemplated in 3202(f) of theAct, these leases can be developed by directional drilling from existing well pads with NOsurface disturbance. By using existing drillsites and access roads, new technology allowing formultiple directional wells from the same site and allowing for directional drilling deepunderground, the resource can be fully developed without impacting any of the environmental orrecreational concerns raised by restricting surface use within the WRWA.
As acknowledged in the ROD, the air quality impact of any wells added to develop thesedisputed leases could be addressed in the permitting process. Though ignored by the RO,WOPI’s submitted comments noting that air quality concerns can be addressed in timingstipulations and monitoring activity and that development at the nearby Riley Ridge Unit and theRands Butte Gas Plant (which would process gas from the disputed leases) is currently underway
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with air quality monitoring and practices designed to minimize the impact on air quality. (SeeExhibit “A” and Exhibit “C”).
Therefore, Alternative 4 — and even Alternative 3 with appropriately modified lease stipulations— better matches the letter and intent of the Wyoming Range Legacy Act than Alternative 1.
II.
The ROD’s selected Alternative 1 (prohibiting all leasing) is a direct contravention of law,regulation, policy and practice that encourages multiple use and development of energyresources while protecting the environment. When the RO glibly notes that there will be NO“recovery of energy resources” (ROD p. 9), nor any economic benefit to Sublette County”, theRO ignores decades of existing law, regulation and policy that allow for energy developmentwhile still protecting valuable environmental and wildlife resources. It cannot be denied that suchbalanced energy development has provided enormous economic benefit to Wyoming and to theUnited States.
The United States Congress clearly sees benefits to the public good from environmentallyresponsible development of minerals on public lands. Both the original Mineral Leasing Act of1920, as amended, and the Federal Onshore Oil and Gas Leasing Reform Act of 1987 seek abalance of public interests in public lands energy development. Further, the National ForestManagement Act of 1976 (PL-94-588) specifically directs multiple use of public forest lands. Asnoted by the RO, the Bridger-Teton National Forest’s Land and Resource Management Plandeveloped under this statute emphasizes “commodity resource development” as a significantgoal and objective (ROD p.15).The Energy Policy Act of 2005 (PL 109-58) mandates“development of reliable domestic sources of energy” on public lands. The various Codes ofFederal Regulations adopted pursuant to these laws also emphasize balance and energydevelopment along with responsible environmental stewardship. Even the leasing analysisrequired by 36 CFR 2 18.102 obligates the authorized Forest Officer to “comply with theNational Environmental Policy Act of 1969 and .. .regulations at 43 CFR parts 1500-1508 and
.policies and procedures set forth in Forest Service Manual chapter 1950 and Forest ServiceHandbook 1909.15” — which, when read together, require a balancing analysis. Yet, by selectingAlternative I banning all future development of oil and gas energy resources within the projectarea of the Bridger-Teton National Forest, the RO disregards this balancing objective and setsaside the clear priorities of Congress and the Executive Branch.
Even the recent Wyoming Range Legacy Act (Omnibus Public Lands Management Act (SubtitleC of 2009) setting aside the WRWA, is focused on protecting SURFACE disturbance and theimpact that can result. That Act acknowledged that existing development on the WRWA’seastern edge could be expanded UNDERGROUND one mile within the WRWA to recoverresources while minimizing or eliminating surface impact. The Wyoming Range Legacy Act wasa bi-partisan effort at both the State and Federal levels. Yet the ROD ignores the balancing ofinterests that already took place to finalize and pass the Wyoming Range Legacy Act.
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Senator John Barrasso of Wyoming was a primary sponsor of the Act and worked with manyinterests to craft the legislation to balance energy development and conservation. Referringspecifically to Section 3202(f), Senator Barrasso in his letter to BLM State Director Simpsondated October 7, 2009 stated that “[t]he intent of this provision is to permit responsibledevelopment of the mineral resources inside the Wyoming Range, if it can be accomplishedwithout impacting recreation and wildlife in this pristine area”. He added, “I urge you to give fulland fair consideration to leases that could be developed without any impact to the surface”.(Exhibit “A”). See also Senator Barrasso’s speech ofJanuary 11, 2009. (Exhibit “A”).
Former Wyoming Governor Dave Freudenthal was also a major supporter of the Act and workedwith many interests to see that the Wyoming Range legislation struck a balance. Both in histestimony to Congress and in his letter to Senator Bingamen of June 3, 2008 (See Exhibit “A”),the Governor emphasized a balanced approach to the Wyoming Range issue and supporteddirectional drilling to develop the resource within the WRWA without disturbing the surface.That approach was further emphasized in the Governor’s letter of January 25, 2010 to SecretariesSalazar and Vilsack (see Exhibit “A”). Yet the RO ignores these components of the Governor’sbalanced position, though she cites him throughout the ROD on other points.
None of the laws cited above mandate a total limitation on energy development: just theopposite. All seek to balance energy development in an environmentally responsible manner.Therefore, the selected Alternative 1 of the ROD arbitrarily violates existing law and regulationin its comprehensive prohibition of oil and gas leasing without selecting the more balancedapproaches ofAlternatives 3 or 4.
III.
The Appellant strongly disagrees with the basic premise of the ROD that the FSEIS offered“significant information” not available in 2004, 2005 and 2006, when the original leasingdecisions were made. A careful review of the past EIS, Forest Management Plan, EAs andevaluations for development in the contested project area disabuses one from the assertions inboth the FSEIS and the ROD that “new information and changed circumstances” (ROD p. 2) leftno choice but for the RO to select Alternative 1.
To the contrary, those previous assessments were comprehensive, thoughtful and anticipatedfuture changing circumstances within the Forest — including those set out in the ROD. As onewould expect, nothing remains static. The Supplemental EIS process was designed to examinethe original circumstances and plans with an eye to changed or changing realities. None of thealleged changing circumstances listed in the ROD require that the original conclusions in 2004be set aside and leasing be prohibited. In fact, an analysis of each of the alleged “changedcircumstances” reveals that non-surface occupancy (“NSO”) and timing stipulations addressesvirtually all of the concerns. The concern over the effects on the Canada lynx, the mule deerpopulation, wildlife, recreation, scenery and “sense of place”, and even air quality can be metwith surface occupancy restrictions and timing stipulations. That does not require the draconianconclusion of Alternative I that all leasing should be prohibited.
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Appellant does not concede that Alternative 2 (issuing the leases with existing stipulations) is nota viable option. Nonetheless, using the analysis of the FSEIS and the original EIS, Master Planand EAs read together, Alternative 3 will adequately address all of the concerns raised byallowing for the lease issuances with new stipulations to address the identified issues of theFSEIS and still allow energy development. Similarly, given the location of Appellant’s disputedleases, Alternative 4 will also address the identified issues of the FSEIS and still allow energydevelopment.
CONCLUSION
The selection of Alternative 1 in the Record of Decision ignores completely the opportunity thatexists to develop the leases’ resources in an environmentally responsible manner.THEREFORE, the Appellant respectfully asks that the Appeal Deciding Officer reverse theResponsible Official’s conclusion selecting Alternative 1 in the Record of Decision, and revisethe ROD to select Alternative 3 or Alternative 4 to allow oil and gas leasing with the appropriaterevised stipulations and compliance with Wyoming Range Legacy Act; and, particularly, toallow the issuance of Appellant’s Disputed Leases with the modified stipulations.
DATED this 17th day of March, 2011
APPELLANT:
WOLD OIL PROPERTIES, [NC., a Wyoming Corporation
By: 2ZPeter I. Wold, President
EXHIBITS ATTACHED:
“A” — Complete copy of Appellant’s submitted written substantive comments“B” — Map depicting disputed leases location in relation to WRWA & adjoining oil
and gas activity“C” — Articles from the Casper Star-Tribune regarding the Rands Butte Gas
Processing Plant at Riley Ridge
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CERTIFICATE OF SERVICE
I hereby certify that on the 17th day of March, 2011, I caused to be served a true andcorrect copy of the foregoing Appeal of Record of Decision, by placing the same in FederalExpress — Overnight Delivery and sending a copy by Facsimile transmittal on March l8, 2011addressed to:
Appeal Deciding Officer Jacque BuchananRegional Forester Forest SupervisorIntermountain Region USFS Bridger-Teton National Forest324 25th Street 340 North CacheOgden, UT 84401 Jackson, WY 83001FAX: (801) 625-5277 FAX: (307) 739-5442
Wold Oil Properties, Inc.
By:______Peter I. Wold, President139 West 2’ Street, Suite 200Casper, WY 82601TEL: (307) 265-7252FAX: (307) 265-733
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(. OLD OIL PRoPERTIEs, IN .) I_—’ iJ- MINERAL RESOURCE CENTER - SUITE 200139 WEST SECOND STREET
CASPER, WYOMING 82601PETER I. WOLD JACK WOLD
TELEPHONE (307) 283-7252FAX (307) 265-7338
E-Mail: [email protected]
March 17, 2010
Bureau of Land ManagementU.S. Dept of the InteriorWyoming State Office VIA FEDERAL EXPRESS DELWERY5353 Yellowstone RoadCheyenne,WY 82009
Attn.: Julie L WeaverChief, Branch of Fluid MineralsAdjudication
RE: Response to Draft Supplemental EnvironmentalImpact Statement (DSEIS)Oil and Gas Leasing in the Wyoming Range WithdrawalArea of the Bridger-Teton National Forest
Dear Ms Weaver:
At your invitation, Wold Oil Properties, Inc., is pleased to respond to the abovereferenced DSEIS. It is our intention with this letter, to preserve our right to appealwhat we might determine to be an adverse decision in this matter, pursuant to theForest Service Notice, Comment and Appeal Procedures at 36 CFR Part 215.
In the recent past our company has responded multiple times for justification forleasing the two parcels (WYW-173279 and WYW-173280) for which we were thehighest bidder at the August 1, 2006 Wyoming Federal Oil and Gas Lease Sale. Therationale, motivation and justification for issuance of these leases have not changed.
In the DSEIS, there are four alternatives cited. We strongly disagree with theconclusion of the Responsible Official, who has identified Alternative 1, the No ActionAlternative as the Preferred Alternative. Selection of Alternatives 2, 3, or 4 would beacceptable to us, because they would allow for energy development in anenvironmentally responsible manner. The two leases we bid on meet therequirements for lease issuance in the Wyoming Range Withdrawal Act recentlypassed by Congress. Per the January 6, 2010 letter from Peter I. Wold of Wold OilProperties, Inc. to Don Simpson, Wyoming State Director of the Bureau of Land .2Managemenl Wold will accept the leases with a No Surface Occupancy (NSO)stipulation attached to them. The NSO designation answers all of the environmentalconcerns that have been raised, while allowing for development of the public resourcelocated underground.
In reading the supplemental EIS referenced above, we see very little new informationthat wasn’t available to reviewers in 2005 and 2006. The only possible exception tothat is the potential cumulative effect to air quality values from drilling. That 0
potential impact can be resolved with stipulations for timing of drilling operations ona seasonal basis. Further, it should be known and understood that the natural gas
DENVER OFFICE:1775 SHERMAN STREET TELEPHONE: (303) 831-0575
SUITE 1700 FAX: (303) 831-0607DENVER, COLORADO 80203 E-maIl: [email protected]
Q.Bureau of Land ManagementMarch 17,2010Page2of2
produced from these leases will be processed at the Rand Butte Natural Gas Plant,operated by Cimarex Energy Company, along with which Wold Oil Properties, Inc. is asignificant owner. As part of the permitting for the gas plant, we have agreed to builda $200,000.00+ air monitoring station to establish ambient air quality standards forthe Wyoming Range-Rands Butte area.
Gas produced from the Madison Formation at 17,000 feet below ground level from thetwo NSO stipulated leases will be part of the reserves supplying the gas plantpresently under construction. The project, thus far, has investments exceeding$100,000,000.00. It will be the second largest supplier of Helium in the U.S., astrategic gas of significant importance and demand. The overall project is muchlarger than the two subject leases, but they do play an important role as part of thefeed stock for the gas plant
To this letter, we are attaching correspondence from our company and electedofficials that acknowledge the compliance of these two subject leases under the newlaws and regulations for issuance:
1. Letter from Wyoming Governor to Secretary of the Interior and Secretary ofthe Dept ofAgriculture, dated January 25,2010.
2. Letter from Peter I. Wold to Don Simpson, Bureau of Land Management,dated January 6, 2010.
3. Declaration of Peter L Wold, dated October 19, 2009.4. Letter from U.S. Senator John Barrasso to Don Simpson, Bureau of Land
Management, dated October 7, 2010.5. Letter from Wyoming Governor to U.S. Senate Energy and Natural Resources
Committee, dated June 3, 2008.
We look forward to a positive outcome and resolution of this issue. Thank you.
Sincerely,
Peter L WoldPresidentWold Oil Properties, Inc.
P1W/neEnclosures
cc: Carole “Knifi Hamilton, Forest SupervisorUSDA, Forest Service
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Don SimpsonWyoming State DirectorBureau ofLand Management SENT DY OVERNIGHT DELiVERY & E-MAILP.O. Box 182$5353 Yeflowstone RoadCheyenne WY 82009
Re: IBLA No. 2009-316Bids Rejected WYW473279 & WYW-173280#3100(921 MadrId)
Dear Mr. Simpson:
As you arc aware, Wold Oil Properties, Inc. Is appealing the BLM’s decision ofAugust 21, 2009rejecting ow successfbl bids of the above-referenced cases, which has been docketed with theInterior Board of Lend Appeals as Docket No. 2009-316. That Appeal is still pendirlg finaldetermination. In his docketing letter ofS1Aubr 24, 2009, Chief Administrative Judge H.Barry Ifoft urged the parties to consider direct negotiation as an alternative resolution to thepen’flng Appeal.
In that spirit I would like to propose a settlement offer to resolve this dispute: Wold OilProperties, Inc., as the succeesM bidder of these lessee, is willing to accept the issuance of thoseleases with a No Surfhce Occupancy Stipulation (NSO) regardln* any planned operations todevelop the underlying mineral estate. Further, our company will be willing to accept theprovisions of Omnibus Public LajidI Management Act (Public Law 111-11, 123 Stat. 1128)Subtitle C-Wyoming Range, restricting oil and gas activities within the Wyoming RangeWithdrawal Area (WRWA) as stipulations for dcvelopmen as we are in a position to developthese leases with outside drilling restricting any directional drilling to the one (1) mile limitrequired by that law.
I believe this offer would resolve both of our concerns regarding development of these twoleases and would comply with both the spirit and the letter of the WRWA legislation. Ifacceptable, then the pending appeal can be dismissed. Obviously, time is pressing I lookforward to your favorable reply. Thank you for your consideration.
±Peter I. WoldPresident
cc: Phil Lowe, Regional Solicitor’s Office
DINVII OFFICI.1771 SH(RMAN $71117 TELEFNONZ1(303) 221-0171
IUIT1 1700 FAX. (20)) 221-0107INVKR. COLORAOO 2010$ 1-ma *.Øda.oLcce
The Honorable Ken SalazarSecretary ofthe Interior1849 C Street NWWashington, DC 20240
The Honorable Thomas VilsackSecretary of the Department ofAgriculture1400 Independence Ave. S.W.Washington. D.C. 20250
Dear Secretaries Salazar and Vilsacic
2 6 2010
C
DAVE FREUDENTHAL STATE CAPrrOLGOVERNORTHE STATE OF WYOMING CHEYENNE, WY 82002
Office of the Governor
January25, 2010 El 1
LfU_JAN
WOLD COMP.rnEs
I write to you concerning oil and gas leasing within the external boundaries of the WyomingRange Withdrawal Area (Withdrawal Area). As you know, the Withdrawal Area was generallywithdrawn from oil and gas leasing under the provisions of the Omnibus Public Lands ManagementAct (Public Law 111-11, 123 Stat. 1128) (Act) In March of 2009. I supported the passage of the Actand continue to work to ensure that the Wyoming Range Is protected for the benefit of futuregenerations ofhunters, anglers and, those that enjoy the outdoors. This said, I also supported the“exception language set forth in Subtitle C, Section 3202(f) of the Act and write to ask that youmove forward with oil and gas leasing consistent with that specific provision of the law.
Subtitle C, Section 3202 (f) reads as follows:
(fJ EXCEPTION.—Notwithstanding the withdrawal in subsection (a), the Secretary maylease oil and gas resources in the Wyoming Range Withdrawal Area that are within 1 mile ofthe boundary of the Wyoming Range Withdrawal Area in accordance with the MineralLeasingAct(30 U.s.c. 181 etseq.) and subject to the following conditions:
(1) The lease may only be accessed by directional drilling from a lease held byproduction on the date of enactment of this Act on National Forest System land thatis adjacent to, and outside of, the Wyoming Range Withdrawal Area.(2) The lease shall prohibit, without exception or waiver, surface occupancy andsurface disturbance for any activities, including activities related to exploration,development, or production.(3) The directional drilling may extend no further than 1 mile inside the boundary ofthe Wyoming Range Withdrawal Area.
During deliberation on the bill, I provided testimony that suggested that the exceptionlanguage did not go far enough. It was my view - and frankly remains my view - that so long as theleases in the Withdrawal Area were issued with a no surface occupancy provision (since the surfaceand surface-related resources were really the focus of the protections of the Act) we should not
TTY: 777-7860 PHONE: (307) 777-7434 FAX: (307) 632-3909
(i
The Honorable Ken SalathThe Honorable Thomas VilsackJanuary25, 2010Page 2
limit the distance that we would allow directional drilling to access the gas resource. While thelanguage I suggested was not ultimately adopted, the concept of allowing directional drilling fromleases held by production - albeit only up to one mile — was accepted. As such, assuming that air,water and land quality can be protected as a function of the analysis done for the Application forPermit to Drill, project or land use plan level National Environmental Policy Act analysis and/orstate permitting actions, I fully support the issuance of leases within the withdrawal area consistentwith and in furtherance ofSubtitle C, Section 3202(f).
I write with specific regard to an appeal that was argued in front of the Interior Board ofLand Appeals (IBLA No. 2009-316) and two bids that were rejected for parcels within theWithdrawal Area (WYW-173279 and WYW-173280). In my view, given the nature of the leaseright that was to be conveyed (notably, an allowance for disturbance and occupancy of the surface),I agree with the decision to reject the bids for these leases. However, I am supportive ofWold OilProperties, Inc.’s proposed resolution of the issue set forth in a letter dated January 6, 2010, toWyoming State BLM Director, Don Simpson (copy attached for your reference). For these leaseparcels and some others that are the subject of ongoing litigation in the IBLA or elsewhere, Isupport Issuance, but only if the company voluntarily agrees, as Wold has, to abide by the rigors ofthe exception language in the Act — including the non-waivable no surface occupancy provision andthe limitation of leasing and drilling to no more than one mile from leases currently held byproduction.
To close, I would reiterate my support for leasing but only consistent with the strictprovisions of Subtitle C, Section 3202(f) of the Omnibus Public Lands Management Act.
Thank you for your attention to this Important matter.
Dave FreudenthalGovernor
DF:pjb
Enclosure
C: Don Simpson, Director, Wyoming BLM
DECLARATION OP PETER L WOLD
I, Peter L Wold, declare as follows:
1. TbatIarnovertheageofl8.2. That the acts and opinions set forth in this declaration are based on my own personal knowledge
and experience. Ifcalled as a witness in these proceeding I could and would testify competentlyto these acts and opinions.
3. That I currently live hi and was raised hi Casper, Wy411ing and am an avid outdoorsman.4. That I am currently the President ofWold Oil Properties, he., C’WOPfl a Wyoming corporation
headquartered in Casper Wyoming with an auxiliary office in Denver, Colorado. My fhmily andtheir companies, including WOPI have been engaged in various aspects ofthe eneru business inWyoming and the Rocky Mountain area for almost 60 years.
5. That my ccezany, WOPI was the succeasfol bidder on the two leases that are the subject ofthisappeal: WYW 173279 and WYW 173280 Thsputed Leases”). These leases are located InSublette County, Wyoming within the boundary of the Bridger-Teton National Forest and thenewly created Wyoming Range Withdrawal Area (WR.WA) and total 3,867.27 net acres. Theseleases were acquired to augment our other lease holdings and oil and gas operations in thehnmedinte ares.
6. That WON has been active in Sublette County near the Disputed Leases for almost twenty years.WOPI and its partner. currently have acquired hdests hi acreage immediately a4jaccnt to theDisputed leases. Additionally, WON and its ffihttes are working interest owners in the RileyRidge Unit the Mim4 Ditch Unit and have royalty interests in the Lake Ridge Unit - portions ofeach ofwhich are located within the Bridger-Teton National Forest immediately a4jacent to theWyoming Range Management Area and the Disputed Leases. The Riley Ridge Unit is comprisedof9780.03 acres.
7. That WOPI and its partners have invested over in the development of the gasresources and a state-of-the-art gas plant at Riley Ridge known as the Rands Butte Project todevelop the deep Madison formation. Construction ofthe Rinds Butte Gas Plant has begun.When completed in 2011, the investment in the Rinds Butte project will be near $200,000,000.Rand. Butte will process the methane and helium resources of this area and will be one of theworld’s largest carbon sequestration projects when completed. Rand. Butte will be the secondlargest helium production facility in the world, second only to the EzzonMobil plant also locatedInthisarce.
8. That the reserves under the Disputed Leases are an important part ofour development of theenergy resources of this area. Independent third party reservoir engineering has provided Madisonformation reserve analysis of the two Disputed Leases. They are significant and important to theeconomic life ofour project Recoverable methane reserves (85% recovery factor) in the twoleases are 223,528 million cubic feet (mnEf) and 6,147 million cubic feet (mmcf) of helium.
9. That the Disputed Leases lie on the geologic structure known as the LaBarge Platform whichcontains world class gas reserves. Proper development otthose reserves will help foster U.S.energy independence and is in the public interest
10. That WON and its partners are currently drilling the Riley Ridge #20-14 well, which is adirectional drilling operation with its surface location at T29N, Ri 14W, Section 17:SEI4SEI4 andits target bottom hole location at T29N, Rl 14W, Section 20:SE’4SW14, over one (I) mile from
Page lof 2 EXHIBIT_________
I
C..
the surface location. At this writing, the well has reached a depth of 15,500 feet (with a target
depth of 17000 feet) and has accumulated a cost of $18,361,000 to date.
11. That the attached Riley Ridge Unit Area Map (Exhibit 2) was prepared at my direction and
depics the immediate irea ncà the dipite6kase, thCWRWA hue, the lotive Fedeill Oil and
(3as Units, wells drilled in the area, our lease holdings and the township and range and section
lines.12. That the Disputed Leases lie within one (1) mile of the WkWA lina, but arc immediately a4jacent
to existing leases and producing exploratory units. The Disputed Leases can be developed by
directional drilling and require no szrce occupancy or disêirbance.
13. That during the pendency ofthe Wyoming Range federal legislation that resulted in Subtitle C of
the Omnibus Public Lands Management Act (Public Law 111-11, 123 Stat. 1128), I met
personally with Governor Frendenthal and Senator John Barrasso, among others, to discuss non-
surface occupancy development In the Wyoming Range area. We worked with them to develop
language that allow, preservation of the pristine nature of the Wyoming Range and still allow a
non-intrusive development ofthe underground mineral estate. Because of the exception language
included in Section 3202(f), I assumed our leases would be issued and was shocked when I
received the Decision Letter rejecting our bids.14. That ow planned development ofthe Disputed Leases will cunfarm to the exception language of
Section 3202(f) of that act. Deep directional drilling from a lease outside the WRWA will in no
way impact the surface uses and surfbce protections conten4,latcd by the Act. Development can
take place without affecting the pristine wildlife and scenic use ofthese lands, which we value
greatly.15. That pursuant to 28 U.S.C. Section 1746,1 declare under pecalty ofperjury under the law. of the
United States that the foregoing is hue and correct to the best ofmy knowledge.
wExecuted in Casper, Wyoming this j.... day ofOctober, 2009.
Peter L Wold
Page 2 of 2
• JOHN SARRASSO
flnited tatea enate
October 7, 2009
Don SimpsonState Director, WyomingBureau of Land Management5353 YellowstoneCheyenne, WY $2009
Dear Director Slmpeon*
In developing the Wyoming Range Legacy Act, I worked with many people In tl slate to strike
the right balanc, between energy developner rd conservation. Section 3202(0 ofthe
Wyoming Range Legacy Act strives to achieve this balance by allowing the Secretary to lease oil
and gas parcels within 1 mile of the boundary of the withdrawal area as long as it Is accessed
through directional drilling withoit surce 0CC14)ericy or distirbance. The lnt ofthis
provision is to permit responsible development ofthe mineral resources inside the Wyoming.
Range, if it can be accomplished without impacting recreation and wildlifr in this pristine area.
it is my understanding th there is potential to access rourccs under leases located along the
boundary of the Wyoming Range Withdrawal Area without surce occupancy or disturbance
through directional drilling. In this area, I urge you to give IWI and Ihir consideration to lases
that could be developed without any Impact to the surfbce.
As the largest net exporter of energy In the country, the State of Wyoming is a leader in
providing secure, domestic sources ofenergy to meet our nation’s needs. Wyoming is also
blessed with spectacular landscapes and some of the best recreation areas in the world. I am
proud to say that Wyoming has worked diligently to find the right balance in n1Rnging the land
for multiple uses - from energy development to grazing to hunting and flshing This balance has.
been a boofl to our residents, State and local governments, and economy. In reviewing contested
and future leases, I strongly urge you to consider whether tbC leases could be accessed by
directional drilling without surface occupancy or disturbance.
Sincerely,
)dli Barrasso, ?vLD.(7ted States Senator
EXHIBlT3.1
—. .
Barrasso Speech on the Wyoming Range
a.nuàry tie aooo.
___
--
-
- -
Mt, Prcs1den t corn to the fløar today to put Into perspective scm statements mad. by good Mend
*0* Oklahoma, and ho made thos with regird to the Wyoming Ranga Withdrawal Act. This Is a bill
that I inoduce
i *p1eascdtohoth1sspe.chflomthIsdesk mom1nIa*
aboutthe deskandwhoa.de kdoycuhav.lAayouknow,aftarthIeIaoUcaafldthaaewsWeesin$ In of
Senators, somi attbdesks switched around. Dul to the geceroa1r tenatw gh.Ihv..and I am very
patd to hlan4ihu 11tow .d,*bec: thIaki. disk ofF.S,i who wee.
Wyom. rst S1mato wh.4 i, became a State lb 1890. 11. took the oath ofofci and hi served fbr
almolbirdecadae This lathe dhenhim.bth.Ifl11Ieadayone.
_
history when It comae to multiple use oldie land. We have done It 119 yeats thataStea,andw.wWhbevee
I ftyuandtofltip.ofWomlltheoptöofAmer1cathrnIIntroduoedthIs
bill, the Wyoming Ranga ,Wfthdri, Aa to firifihl a commitment E made to the peopli q(W,opih$
and to complet, the work that was started by my odIend, Senator Craig Thomat. We lOst Senator
Thomas 1n2007. Mth. time of1q11 dieift.hiwap worklngoeddabilL )t.bad tt*v.ledtb. Stats. H. had
visited withpiojl, listened to peoPle flat Is wetly what E did wh Iokth. Oath o(oMcih*vlng
_
I am hero to tell you that right now, today, there Is oil and gas developme t goIng on In the Wyoming
range. I have I pictur, of the Wyomb range, a beautiful part ofwestöm Wyonting It means so much to
so many people. There are certain places that are so .pCcIai and so pristine that they need to be protected
for flituro generations. But we do It right In Wyoming. W. rely on multiple uses of the land.
This legislatIon we have heard about today seeks to proteCt from Ibtug. oft and g actlvItr.-let me say
that agaIuftom future oWand gu activity, lada In the Wyoming raâg. that are not ourrontly under
lease. And there are lands In Wyomhig that are currently undo’ lease.
As we can see In this picture, It Is still a very pristine, beautIful atop, but some ofthis landis under lease
for oil and gu development.
Th. legislation in this lands package does not-does not.-affect areas that have been currenUy leased for
exploration. There at, 1$ oil and gas leases within the proposed withdrawal area. These leases cover
over 70,000 acres. These leases are primarily located hr areas that have some ofth. most significant
otondul, th. most significant potential for mineral development. They ropresSni valid existing rlghts
and they will not be canceled In any way by this bill. I repeat: These leases represent valid existing
property rights and will not be canceled by this bill. EXHIBIT______s.z.
8/25/2009—- a-
A
( (f::.In edddoa. theta am 3$ oil SMw lusqa cqvqdg almpst 4SQQQ a4w4a1 mqroa that hv W.n Inu4and RZ* undaE tPdt haVe hesS &d but flat yet 1UU. Tha hdtlO d45 flat c*soeta Ofthei
areU which arq hiin$ aateste Th dOeS e*lat an 9priatadIfl. eUwhaeb the.
Bwceu ofLand jmiag.m.n the U.s. FOrest vtØ.lqvslUatInithØI CZtud IOU.’ te diteemine
their status. I NDIatL1’Ik teililado* todq doe nat canoe! anofihaa.urrsnt1y contested tuaWSvnyone should kipp In mind that th acres crentty IOw4ar eurmtIZ 1a4bØ imd.r protest
represent the ate*ih,r. the most j,r.lllflS re—’is *sl* This Nfl don not løuch thaL
my coaauam okichorna atnted that the egIulafláwojld tek offthi tobis II llliàn ubIO
.tottecorel. Daturul pa and ova, 300 milliOn biu.i ofreceymbi. oIL Wdi let us first sit nid
whasárea wiUg thd am reltoritot The areas believed to.
hold th.”o(thi oil And .“re Weasi1 those areas at ileA. and dtoi arvalld
e,datlna ts and will flit bcj,db this IdsdàeNaw redlnithegus. I h4’e an
updated .sdm.tA no eStimat. of the reatva. otthe Wyoinfbg Rang. thqt bU bâiprepered b7 the U.s..z5epartmant ofrnt.der. the Ui. Geological Suivey, and this was prepared on $uni 19200$.! hiv
..numbamwiiM.mbmofth.Sira* .
ustseoiocai’hi
___
nitri uQtntld In this arliof 13 bUtton cuble fad net LI and asoilpowntlslofS.milhloa.ba.1i, natI00 million baud.
M ostatedgma.’rareadUflotaneliamoint. butthey
___
reladvi to other known gem reesrwe In the areso(wéstam Wemfr1 Currpfltly, In this are., there ar,
4,300 roduotnS oil and gas wells In the three counties that are touched by this legIslatIon. There Is a
piopoasi hung considered fbr up to 4,339 ad4IdOnal well that would not be .fteoted by thiS Iqieladon.The. lap,oductioecurrentlytakhigplac. lathi WromigRangeth.twUI notbe atopp.dbythIslogIilatlcn.
11 pqoplá of Wycm frpiie kaaaAà’e enera’ flowing W. In Wrómh1 are thlaipsi net exporter otenar IntUnited Stet* We npport div.[opmw4 ótour coal, ofUranium, ofoil, ofg.e. and ofrenewable resourcea.the electrfcfty from wind. We have never been a State that hassaid: Notlflmy backyard. WeareNo. I Inco.Lproductlam lnthcountry, we areNO. 1 Inuranhanproduction In the country for nuclear powat, and we are No.2 In the country in production ofonshore
natural gae The people of Wyomlflg continue to do V
We also recognize. through 119 years ofstatehood, that there musi be a balance, a balance betweenhelping the Nation meet Its energy needs and nialnealning the quality of1I the people ofWyomtnghay, came to mJoy The Wyoming Range Withdrawal Act has blpe(tiun support throughout the State
ofWyoming. Tb. Governor of Wyoming. Ooverncr Dave ?roudcnihal, a D.mocs* cams toWashington to tcstIt at i hearing beb. the Senate Enerij and Natural Resources Committee, and bespoke In vor of th, bill. My colleau. In the SenAte Senator Mike r”I Is a cosponsor ofthe bill. Ittruly isa bipartisan measure.
The Wyombig Rang. Withdrawal Act strikes the proper balance I have come to the Senate floor today
to put this bill In context with what ii ocCurring on the ground In Wyoming. u well as what Is occurring
under th, ground. My goal I. to provide an accurate and a complete plctw. tbr the Senate and, much
more Importantly, (or thiS American people.
hsso.senategov/public/bdex.cnWuseAcdon-PreuOffice.5pecches&ContcntR.,. 8/25/2009
• ;•
nave rmmmm SI’IICpfl’0LWV llSi.
••.. :.
Of& of thGoo
June 3, 2008
Senator JeffBingaman ChairmanSenator Pate DomenIc Ranking MemberSenateBaand Natixal Resource. Committee304 Dliben Office BuildingWathlrigtoe, DC 20510
• Dear Senator Bingaman and Senator Domenid:
I am writing to expres, my pleasure with the pamage ofthe Wyoming
Range Legacy Act (Act) from ymr crnliItte. and to sham aasseamnoMmthe Wyoming State Geological Survey (Survey) on the
hydrocarban-beming potential attheWesnlng Range withdrawal area.
Using tin1’mo reliable dute from the U.S. GeolOgical Survey
(USC$ di. Survey eeIIntes the undiscovered natural gas resources just
wider 1.1 frllfton cubic feet (tcf), a slguhflcantly lower figure cited by both
me and the BLM in our respecthe testimony to the Public Lands and Forests
Subcommittee on Pe&uary 282001.
This new and more accurate figure from the Survey settles animportant question regarding the Act, which opponents have claimed would
jeopardize Wyoming oh and gee production and the nation’s overall enersupply. In fect, the Act would likely hav, a negligible elThct on gasproduction, especially since the majority ofthese estimated gas reserves,according to USGS figures, underli, some 75,000 acres already leased for
developmei (and not the area that would be addressed in Senator Barrasso’s
bill). As a result, the Act could still allow access so most of this gas resource
- assuming ofcourse, that adequate environmental safeguards are in place to
protect wildlife, air quality and other important resources.
rr777-7’ iicie gaer m.mi. FAX (307) 5400
EXHIBIT_______Lf
• I•, ••
Senator JeffRininSenator Pete Domeflici31Kg 3,2008Pp2
bctwmesdm isthatthe 3LM has been relying on a 2001 repast derived from now outdated 1995USGS data. The number I cited dtxlng my Februmy wassimilarly skewed by old data, which I. wl I requested that the Survey takeanother lock the true reserves taiderfyirig the Wyoming Range. In thecase ofthe BLM, it would seem that they are hokig to the thimer data,even thoughtrown EPCA Repast called the acemacy ofthe 2001 reportInto question — and even though the flnei Pulley Coneervidon Acts of2000 aid 2005 mandate that the BLM avail Itselfofthe lat, moat up.tD.
date inthanidon.
To bring the revised figure Into seaterpesective, the estimateduhhntdy recoverable reseves In thenenty Jonah Field aid PinedaleAntldlluie are 12 Idad 25 tcfofnural gee respectively. The lomb Fieldand the Plnedal Anticihie -. emanglb lopjirvdiicing natural fields Inthe wed& Compared to these reserves, the omount ofgas In the WyomingRange eppears huslgnlflcaid. ‘ll. ahould be no question as to whetherWyoming Is contributing substantially to asw nations domestic enerusupply. P!olectlng the Wyoming Range will not detni* In mymeasurableway from the state’s mineral prodactian, yet it will ensure that some balanceIs brougist between extensive ener’ devdopmen wildilib, recreation, openspec., aid other values.
I would also like to take this opportuelty to dane comments madeabout the potential to drill directionally Into the Wyoming Rang. fromnearby leases held by production. I understand that you were informed thatdirectional drilling Is only Ibesible within distances ofone mile or less,leading to specific language being Inserted Into the Act. I have recentlybeen informed that companies are succeseflully directionally drilling todistances ofthree miles, with tcchno1o improving every day to reachtirther. Consequently, It may be appropriate to revisit the language that hasbeen inserted into Section 3(f) ofthe proposed Act- especially ifthe changewill aact industry support for the legislation. I stand ready to convene adiscussion with Ieaseholders and other Industry and conservationstakeholders to achieve consensus In this regard.
• ._ .•
Senator Jeff81Senor Pete Domenlcl1me 32001Page 3
twáuId likItà ith*Su6flItthI ttáchèdEit frI thi Wyoflthg
State Geological Survq as a supplemesE to my februaiy teatbEicy bthir.
the Public Lands and Forests Subcommittee as a morn accurate estimated
depictice ofthn tmdlscovered ga. resources undedying the withdrawal ares.
I u you wili ace th cur* and accurate data thould lnkrm all
discussions regwdhig thn Wyoming Range Legacy Act andqproposed oil
and gas development In the Wyoming Range.
Governor
DF:pjb
Attaclunent
C: Dirk Kempthmne, U.S. Seoretay ofInteriorHarv Fcraen, Intermountaln Regional Forester, U.S. Forest ServiceSenator Ron WydenSenator John BauassoSenator Mike EnIRepresentative Barbara CubinSenate Energy and Natural Resources Committee Members
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V yomrng nelium plant construction on track Page 1 of 2
X trib.co
Construction on track as Wyo prepares for key role in nation’s helium and methane production
Wyoming helium plant construction on trackBy JEFF GEARINO - Southwest Wyoming bureau Posted: Saturday, October 2, 2010 2:00 am
MARBLETON The massive moose stood in the middle of the meandering South Piney Creek in the Wyoming Range,hidden by the colorful golds and reds of the fall foliage. Not too far away the faint tracks of the Oregon Trail could be seen.
The moose took little note of the massive, 480-ton construction crane peeking from the top of Riley Ridge more than athousand feet above, site of Cimarex Energy Co.’s methane and helium gas processing facility currently under construction.
And that’s precisely the idea, says Cimarex project manager Scott Stinson.
“This is the view the public has ... we’re kind of at our most exposed right now construction-wise and it’s still reasonablycamouflaged,” Stinson said during a tour of the complex Thursday.
Hidden in a remote, aspen-bordered spot east of towering Darby Mountain and at nearly 9,000 feet elevation, Cimarex’sapproximately $350 million Riley Ridge Methane and Helium Recovery facility will substantially increase the nation’shelium production.
The project site sits in Sublette County and lies approximately 1.5 miles east of the Bridger-Teton National Forest boundary.
Cimarex officials and their partners, Air Products and Matheson Tn-Gas, broke ground on a key component of the plantThursday afternoon, a separate helium refining facility located about 18 miles east of the plant.
The plant will take the helium gas that is separated at the Riley Ridge facility and refine the product to about 99.9 percentpurity before it is trucked to market.
The Riley Ridge facility will produce as much as 400 million cubic feet of helium per year -- which would be about 10percent of the nation’s current helium production -- once operations begin in 2011.
Helium is used to inflate birthday balloons, but also plays a key ingredient in such technologies as rocket science, magneticresonance imaging, the manufacture of computer chips and semi-conductors, cooling fiber optics and welding, among otheruses.
Groundwork for the Cimarex plant began last year and workers began assembling equipment on the site in May, Stinson said.
Construction ramped up Aug. 1 and will continue until winter sage grouse stipulations halt work Nov. 15, he said.
Stinson said the company has taken pains to protect the viewsheds along Riley Ridge and to work with nearby landownerssuch as longtime rancher Dan Budd to minimize impacts to local residents.
“We’re at maximum disturbance and at our maximum worker level of about 250 people, so there’s a lot of activity up therenow,” Stinson said. “But this is about as bad as it will get.”
Zero emissions
The sour natural gas found in the Big Piney-LaBarge area of southwest Wyoming contains about half of the country’s knownhelium reserves.
The new plant will tap into helium reserves in the Madison formation -- a proven resource for natural gas and helium -- muchthe same way the nearby Exxon Mobil Corp.’s Shute Creek Plant does.
But while Exxon’s plant -- the world’s largest helium production facility -- vents carbon dioxide into the atmosphere,Cimarex’s facility will reinject all the by-product gases such as C02 and deadly hydrogen sulfide back into the sourceformation.
That means the plant will have much lower emissions.Appeal of Record ol Decision
EXHIBIT “C”
http ://trib.comlnews/state-and-regionallarticle Sb 1 55c5d-7e44-5f6e-8f75-d4bdOec9334f.ht... 3/17/2011
‘.1 yoming nenum piant construction on tracic rage . 01
“Nothing will leave this plant except by pipeline ... we’re doing this with virtually zero emissions,” Stinson said,
Waste gases from the plant’s five producing gas wells won’t be depressurized, Stinson said. Instead, the gas will be reinjectedunderground as is, thus saving on energy and other costs.
The five wells are located on two well pads sited on both sides of the recovery facility.
Earlier this summer, contractors completed the drilling of the approximately $28 million reinjection well at a depth of about16,500 feet.
As part of the project, a methane pipeline and a helium pipeline are also being constructed, along with a 230 KV dedicatedpower transmission line.
Stinson said the methane pipeline will tie into the existing Williams Co. pipeline system and move south through Calpet tothe Opal Hub.
The helium line will tie into the APMTG refining plant south of Big Piney.
The company received a special-use lease from the state Board of Land Commissioners in August 2008 that paved the wayfor the construction of the recovery facility on a 34-acre tract of state school trust lands.
The board’s lease included a long list of conditions and stipulations, including wildlife restrictions negotiated by theWyoming Game and Fish Department designed to protect the Riley Ridge elk herd, which numbers around 200 animals.
The company also agreed to pay $1.5 million into a mitigation fund that would be tapped for habitat enhancement projectsand radio-collar research efforts if the plant displaces the elk herd.
Mobil first discovered gas in the Riley Ridge area after drilling exploratory wells in the deep Madison formation in 1961.
But the produced gas contained a low heating value and high concentration of C02 and hydrogen sulfide, which hindered thefield’s development.
Stinson said the Cimarex plant is expected to have a life span of from 40 to 50 years.
Once completed, the Riley Ridge plant will employ about 28 full-time workers and the APMTG helium refining facility willrequire about a dozen people.
The Riley Ridge plant is expected to play a significant role in the nation’s helium reserves because the federal governmentwill be selling its strategic helium reserves in west Texas over the next few years.
The reserve at Bush Dome in Texas currently provides for about half the U.S market.
The government began stockpiling helium in the reserve during the days of military airships between World War I andWWII. The reserve provided helium for missiles and NASA rockets during the Cold War.
Contact southwest Wyoming bureau reporter Jeff Gearino at (307) 875-5359 or gearinotribcsp.com
http://trib.coni/news/state-and-regional/article_5bI 55c5d-7e44-5f6e-8f75-d4bdOec9334f.ht... 3/17/2011
..
:Ielium-producing plant on track Page 1 of 2
trib.com
Helium-producing plant on track
By MEAD GRUVER - Associated Press writer J Posted: Tuesday, June 15, 2010 12:00 am
CHEYENNE -- Cimarex Energy Co. has started building a plant in western Wyoming that’s expected to substantially increaseU.S. helium production.
Helium isn’t just used to inflate birthday balloons and giant cartoon characters in the Macy’s Thanksgiving Day Parade. Thelighter-than-air gas also is important for magnetic resonance imaging, manufacturing computer chips and launching rockets.
Groundwork for the Cimarex plant began outside Big Piney last year, and assembly of the plant began on the site in May.Denver-based Cimarex expects production of helium and methane to begin next year.
The plant will produce as much as 400 million cubic feet of helium a year, or around 10 percent of current U.S. private-sectorhelium production, said Scott Stinson, manager of the project at Riley Ridge.
The recession has sapped global demand for helium, but Stinson remains bullish.
“We think it’s going to continue to go up from here,” he said. “It has a lot of uses.”
Sour natural gas from the Big Piney-LaBarge area contains about half of the known, natural helium reserves in the U.S. Thetrick is separating the area’s valuable methane and helium from substantial quantities of carbon dioxide and hydrogen sulfide.
Carbon dioxide is a greenhouse gas and hydrogen sulfide a dangerous toxin.
The world’s largest helium production facility, Exxon Mobil Corp.’s Shute Creek Plant not far from the Cimarex site, pumpshydrogen sulfide back underground and sends carbon dioxide by pipeline to central Wyoming, where it’s used to repressurizeold oil fields.
The Exxon plant also vents carbon dioxide into the atmosphere -- about 3.6 million tons a year, according to the WyomingDepartment of Environmental Quality.
The Cimarex plant will have lower emissions by pumping hydrogen sulfide and carbon dioxide back underground on site,Stinson said.
“We are processing the same gas that Exxon at Shute Creek is processing, but we are doing it in a radically different fashion,”Stinson said. “We’re doing this with virtually, for all intents and purposes, zero emissions.”
Waste gases from the plant’s five gas wells won’t be depressurized, he said, but reinjected underground at the same pressure atwhich it came out of the ground, saving energy and costs.
The plant’s helium will be refined for market at a separate, nearby plant being built by Air Products and Matheson Tn-Gas.Methane from the plant also will be sold.
Wyoming’s helium supply is expected to become even more significant after the federal government finishes selling off itsstrategic helium reserve in west Texas over the next several years. The reserve at Bush Dome currently supplies about half ofthe U.S. market and one-third of the global helium market.
The government began stockpiling helium in the reserve during the days of military airships in the 1 920s and 193 Os. Thereserve remained important during the Cold War, when it provided helium for missiles and NASA rockets.
Congress approved selling off the reserve in 1996 and sales to the private sector began in 2003. The U.S. Bureau of LandManagement, which manages the reserve, initially expected to sell off the reserve completely by 2015.
“We will not be doing that because demand has dropped. You can’t make people purchase a product if they don’t want it orneed it,” said Leslie Theiss, manager of the BLM’s Amarillo Field Office, which oversees the reserve.
The latest projection for selling off the reserve is 2020. Cimarex is looking ahead to that date and beyond.
“That’s not a long-term supply,” Stinson said. “When it runs out, it runs out.”
http://trib.comlnews/state-and-regionalJarticlel7fal 69b-d4a2-5294-99e0-a23802032e48 .h... 3/17/2011
Jelium-producrng plant on track Page 2 of 2
The Cimarex plant, he said, will have a life span of 40 to 50 years.
http://trib.com/news/state-and-regionallarticlel 7fal 69b-d4a2-5294-99e0-a23802032e48 .h... 3/17/2011
United States
Department of
Agriculture
Forest
Service
Intermountain Region 324 25th
Street
Ogden, UT 84401
801-625-5605
Caring for the Land and Serving People Printed on Recycled Paper
File Code: 1570 Date: May 5, 2011
Peter I. Wold
President CERTIFIED MAIL – RETURN
Wold Oil Properties, Inc. RECEIPT REQUESTED
139 West 2nd Street, Suite 200 70101060000191174912
Casper, WY 82601
Dear Mr. Wold:
We have received the appeal you filed on behalf of Wold Oil Properties, Inc. You appealed the
decision by Bridger-Teton Forest Supervisor, Jacque Buchanan, approving the Record of
Decision (ROD) for the Wyoming Range Oil and Gas Leasing.
By letter dated May 4, 2011, Supervisor Buchanan has advised me she has withdrawn this
decision. Since the decision has been withdrawn, your appeal is dismissed without further
review (36 CFR 215.16 (a)(7)).
This constitutes the final administrative determination of the United States Department of
Agriculture under 36 CFR 215.18 (c).
Sincerely,
/s/ Marlene Finley
MARLENE FINLEY
Appeal Deciding Officer
cc: Jacque A Buchanan