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Fed-Up Ranchers Lock Out Drillers

Bank Of America Investment Ranchers who have spent generations coexisting with the oil and gas industry in the heavily drilled San Juan Basin now want to send a message to other Westerners whose land sits on valuable gas deposits: "Don't end up like us."

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Investment Opportunity Miles of rutted roads, trespassers and toxic hazards have irked landowners here for decades, but many of them believe producers have become more cavalier in recent years.

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Banc Of America Investment "We may be fighting a lost cause," Devil's Spring Ranch owner Don Schreiber said. "What (we) want is to bring this to the nation's attention. We might help save someone else's land."

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Banking Investment At the heart of the problem lies a legal quirk common to many Western states: Property owners often don't own the natural gas or minerals below their land. And the law grants energy companies broad rights to drive drilling rigs in to get at those minerals.

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Investment Solution Strategic The drilling has been going on for decades, but land owners from the Southwest to Montana say that new interest in domestic energy has brought a more intrusive side of the industry to the fore.

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Investment Banking Services Many complain that the federal Bureau of Land Management is failing to enforce the laws that protect their interests and they want that to change.

Bank Investment On Nov. 14, after years of fruitless complaints to the BLM's Farmington office, three New Mexico ranchers changed the locks on gates that led to more than a dozen wells and tried to restrict the number of keys producers can have. They said they hoped to force companies to pay attention to their complaints and to obey existing regulations.

Alternative Investment El Paso Gas, one of the 18 companies with wells on the ranchers' grazing allotments, promptly sued one of those ranchers, Treciafaye "Tweeti" Blancett.

Online Investment Services A spokesman said that the company had done nothing wrong and that the ranchers had no right to limit access.

Accompany Essential Investment The three families complained that the energy companies allowed too many people on their grazing land, created open toxic pits that killed cattle and wildlife, and failed to close gates, allowing livestock to roam.

Investment Company The families also presented the BLM a videotape documenting an open pit containing contaminated water on their land. Based on that evidence, the agency issued one operator a notice of violation and required the company to clean up its act.

Investment Management Solution "They run wild on our private property," said rancher Chris Velasquez, who says he's had four cattle hit by vehicles on his 18,000-acre ranch and three more poisoned by chemicals around the gas wells. "They act like they own the whole countryside."

Investment Management Services While the lockout was condemned by an industry spokesman as a tactic to get press attention, it had the desired effect.

Guide Investment Stock On Thursday, the parties arrived at a compromise. El Paso agreed to install a key-card system that gives designated employees unfettered access while allowing the Blancetts to monitor who enters their property.

Investment Manual Solution An El Paso official acknowledged that Blancett had complained about conditions in the past.

Investment Stock "El Paso is in full compliance with all grants from state and federal agencies," said Mel Scott, a spokesman at the firm's Houston office. "We will continue to work closely with the BLM in New Mexico and area landowners to address their concerns and issues as we always do."

Essential Investment Solution Ranchers across the interior West are paying attention to the little revolt staged by Schreiber, Velasquez and Blancett, because they could be facing the same kind of problems soon.

Citicorp Investment Services "Farmington is where a lot of other folks in the West will be in five years," said Jay Tutchton, an attorney with the University of Denver Law Clinic. "What's happening there puts the lie to the industry's promise of sensitive development."

Fool Guide Investment Motley Since he took office in 2001, President Bush has made the expansion of domestic energy sources one of his administration's top priorities. Under the direction of the former oilman, federal agencies have pushed energy exploration and drilling on dozens of federal properties, including national parks and monuments, to reduce the country's dependence on foreign suppliers.

Fidelity Investment Services However, the biggest impact will fall on the dusty lowlands of the interior West, such as New Mexico's San Juan Basin, western Colorado's Piceance Basin and Wyoming's Green River Basin, where an estimated 160 trillion cubic feet of gas lies locked in rock underground.

Investment Management The Rockies, gushed one Colorado School of Mines professor, are "a Persian Gulf of gas."

Francisco Investment San Energy companies are also scrambling to tap the Powder River Basin of northern Wyoming and Montana, where in January the BLM is expected to approve 51,000 new coal-bed methane wells.

Mellon Investment Services That angers Wyoming rancher Jill Morrison, who has followed the saga of the Aztec ranchers for three years and applauds their act of defiance.

Finance Investment "There's a limit to how much money you can spend on lawyers and how much time you can spend on bureaucrats who won't do anything before you take the matter into your own hands," Morrison said.

Investment Manual Science "I don't have problem with oil and gas extraction," she added. "But this is a renegade industry that can't be trusted, and the government is complicit because they're letting companies get away with just about everything. That's why people are locking gates."

Investment Advisory Services New Mexico Oil and Gas Association president Robert Gallagher called the resistance an "illegal gimmick to get press."

Advice Investment There are about 900 permit holders in San Juan County where the lockout occurred, he noted. But only three ranching families have locked their gates.

Guide Investment "Where are the other 897 ranchers?" Gallagher says. "They work through their problems with us constructively. Some of them were 50 years in the making. We can't fix everything overnight."

Chase Investment Services Steve Henke, field manager of the BLM's Farmington office, defends his employees' regulation of one of the nation's biggest gas fields.

Firm Investment By some estimates, the San Juan Basin provides 7 percent of the nation's natural gas. Henke said there are 19,000 active wells in the basin, with thousands more planned. He said his office responds to problems as quickly as it can.

Financial Investment Services The decision to lease rights to the oil and gas under the San Juan Basin happened decades ago, Henke said. "We can't turn back the clock."

Investment Securities Earlier projects used conventional oil and natural-gas wells to get at the riches underground, but the boom of the past two decades, fueled by tax credits to energy companies, has been in coal-bed methane, which taps the gas locked in coal seams.

Property Investment Services The scope of the development is staggering.

Calculator Investment Each square mile of land in much of the basin can host up to 24 regular and coal-bed methane gas wells, some tapping deep sandstones and others extracting methane from shallow coal beds. Each requires a drilling pad to be bulldozed out of the dry earth, a compressor to suck out the gas, and roads to get crews there and back.

Northwestern Mutual Investment "These wells are dirtier, closer together, they're loud as hell, and companies are in such a hurry they do sloppy work," Tutchton said. "In Farmington, those ranchers are looking around and wondering whether it's possible to have other uses in a coal-bed field."

Brokerage Investment Added Schreiber: "It's like we're being eaten to death."

Domain Name Investment None deny that the energy companies have the mineral rights to extract gas from their property and grazing allotments, Blancett said.

Investment Putnam But San Juan Basin ranchers have long complained that industry causes erosion, contaminates groundwater, spreads weeds and fails to fix the roads it damages. They also say the contractors and subcontractors who crisscross their lands often fail to close the gates behind them, allowing livestock to roam.

Bank Investment Ohio Savings Henke said problems are inevitable given the scale of activity.

Advisor Investment "With 1.3 million acres and 19,000 wells, we will have occupancy problems," Henke said. "I'm not running from that fact. But when we find out about them, we take care of them."

America Bank Bank Investment The BLM hands out hundreds of notices of industry violations a year. But there is little follow-up or enforcement of any mandated fixes, and fines are rare, Tutchton said.

Club Investment On Nov. 5, Henke's office cited Energen Resources Corp. for failing to fence and line a pit full of contaminated water. The company was ordered to stop work while 2,250 barrels (90,000 gallons) of water was pumped out and the violation was fixed.

Global Services Investment A company spokesman declined to comment on the matter.

Investment Online But the BLM only acted after it was handed videotapes and other evidence collected by the ranchers themselves. There are about 350 other wells on 38,000-acres Blancett ranch.

Cigna Retirement Investment "We are having to do the BLM's job," Jane Schreiber said of the recent activism.

Investment Return The frustration has driven Blancett, a staunch Republican and Bush stalwart, into what she laughingly calls an "unholy alliance" with environmental groups such as the Durango-based San Juan Citizens Alliance, which has criticized oil and gas development in the San Juan basin.

Investment Consulting Services And while Blancett won this latest fight, she says she is not finished.

Estate Investment Real Trust "We are going to be here after those boys are gone," Blancett said. "They better get ready for a long fight."

Chase Corp Investment Services By Electa Draper and Theo Stein
Denver Post - 11/26/2002

Topic: Petroleum Industry

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