Who Owns The West? Oil & Gas Leases in America's West

"I think there's a huge question mark about whether there's ever going to be an economically viable resource that anyone will want to produce...It's really pretty small potatoes."

— New Mexico BLM Director, Linda Rundell, on energy development in Otero Mesa (Cart 2004).

Quick Facts: Federal Land in Otero Mesa

Acres leased: 514,741
Acres leased (01/2003-05/2004): 14,551
Acres that could be leased with minimal protections: 1.4 million
Gas in Otero Mesa could supply U.S. for: less than 16 days (industry estimate) (Albuquerque Journal 2004, USDOE Natural Gas 2004)

For less than 16 days of natural gas, the BLM has proposed drilling in a 2 million acre-portion of the Chihuahuan Desert in New Mexico that includes a 1.2 million acre fragile grassland known as Otero Mesa. New Mexico Governor, Bill Richardson, leading an unusually diverse coalition of citizens, recently announced his opposition to the plan (BLM Draft EIS 2000 2-38, 2-39, Cart 2004).

Otero Mesa Interactive Map

Map Note: Otero Mesa area outlined in red depicts 1.2 million acres of sensitive grassland that is part of a 2 million-acre area on which BLM has proposed natural gas drilling operations. The operations could result in 140 wells drilled (National Atlas 2003, Energy Inventory 2003, New Mexico Wilderness Alliance 2004).

A Rare Desert

According to New Mexico Governor, Bill Richardson, the Chihuahuan Desert "is one of the most biologically diverse arid regions in the world." The Desert is home to 23 percent of the world's 1,500 cactus species, the highest percentage of any of the western hemisphere's ecoregions (Richardson Consistency Review 2004). The World Wildlife Fund has listed the desert as one of its "Global 200," described as "a science-based global ranking of the Earth's most biologically outstanding terrestrial, freshwater and marine habitats" (WWF 2004).

The BLM has expressed its own concerns about drilling in the area. The BLM has written that Otero Mesa includes "one of the largest contiguous grasslands left in the region... Loss of grasslands due to clearing for pads and roads would lead to fragmentation of habitat [for antelope]." In addition, the BLM has written that increased traffic along roads in another portion of the Otero Mesa area "would increase the potential for direct and indirect effects on wildlife. Loss of woodland habitat would displace many species of birds and other wildlife. Loss of grasslands would reduce populations of small mammals, which provide a prey base for raptors." And the BLM has noted that "threatened and endangered wildlife species also could be significantly impacted if production activities occur within 1,600 feet (456meters) of occupied habitat" (BLM Draft EIS 2000, 4-75, 4-76, 4-77, 4-31).

An Environmental Working Group analysis of government leasing and drilling records shows that the oil and gas industry already pressures the mesa — a summary of current leasing activity in Otero Mesa is shown below.

Oil and Gas Lease Holders in Otero Mesa and Surrounding Area

In Otero Mesa, 277 companies and individuals hold 781 active leases on 514,741 acres of land. The table below shows who holds active leases, and provides links to comprehensive information on leases held across the west by individual companies, and political contributions made by companies over the past three election cycles.

Rank	Name	City/State
1	Yates Petroleum Corp	Artesia, NM 88210	236	156,313
2	Marbob Energy Corp	Artesia, NM 88210	25	58,875
3	Nadel & Gussman	Tulsa, OK 74103	26	53,785
4	C L & F Resources LP	Houston, TX 77060	20	52,312
5	Threshold Development Co	Fort Worth, TX 76102	20	52,312
6	Chase Oil Corp	Artesia, NM 88211	20	52,312
7	Echo Production Inc	Graham, TX 76450	46	37,289
8	Devon Energy Corporation	Oklahoma City, OK 73102	76	35,267
9	Marathon Oil Co	Houston,	44	26,048
10	ChevronTexaco Corporation	San Ramon, CA 94583	38	21,487
See all lease holders in Otero Mesa

Source: EWG analysis of leasing and drilling records in 12 western states, contained in the Bureau of Land Management's Land and Mineral Records 2000 database, acquired by EWG May 15 2004.

Flip-flop on Drilling

Nonetheless, BLM recently proposed a land use plan that would open vast portions of Otero Mesa to drilling with limited protections for land, water and critical habitat. The plan would result in an estimated 140 wells drilled over the next 20 years, with as many as 105 going into production (BLM FEIS, 4-3; 4-56).

The decision represents a significant weakening from BLM's initial draft environmental impact statement in October 2000. In that first statement, for example, the BLM proposed that there be no surface use of land in sensitive grassland areas in Otero Mesa and that 779,093 of the roughly 2 million acres would be open to drilling under standard leasing terms and conditions — the weakest protection for lands available for oil and gas leasing (BLM FEIS 2003, S-2; BLM Draft EIS 2000, 2-28). BLM also proposed that 160,435 acres would be open to leasing with no surface occupancy, meaning that oil and gas companies would have to drill beneath these lands using directional drilling from remote well pad locations (BLM Draft EIS 2000, 2-28).

But under BLM's final environmental impact statement, issued in December 2003, the grasslands would largely be open to leasing, with lessees able to impact five percent of the leased land at any given time (BLM FEIS 2003, S-2). In addition, BLM doubled, to 1.4 million, the acreage that would be open under standard leasing terms and conditions (BLM FEIS 2003, 2-24). And BLM stated that only 40,526 acres would be open with no surface occupancy — a reduction of 75 percent (BLM FEIS 2003, 2-24).

Oil, Gas, Political Cash?

Why did BLM alter its plan so dramatically? A recent report by The Campaign to Protect America's Lands (CPAL) suggests that the change might be the result of political influence by the Yates family, which has leased more acreage in the Otero Mesa area — and nationwide — than any other entity. EWG's analysis of campaign contribution data from the Center for Responsive Politics shows that Yates Petroleum gave $234,000 — all to the GOP — over the last three election cycles.

In addition, CPAL noted that Deputy Secretary of the Interior, J. Steven Griles, is a former lobbyist for Yates Petroleum. In 2001, Yates Petroleum paid then-lobbyist Griles $40,000 to lobby BLM to "secure funding for BLM staffing." This phrase usually means ensuring that an official at BLM will create or revise a land use plan to allow an oil or gas company to drill, CPAL reported. After becoming Deputy Interior Secretary, Griles met on December 6, 2002 with BLM Deputy Director Jim Hughes and BLM Chief of Staff Conrad (Con) Lass to discuss the "Otero Oil & Gas Issue." In addition, Griles currently receives $284,000 per year from his old lobbying firm, National Environmental Strategies (NES), as part of a buyout agreement. NES has represented Yates for several years (CPAL 2004).

Richardson Leads Opposition

Governor Bill Richardson is leading an unusual coalition of ranchers, environmentalists, hunters and property-rights supporters in opposition to the Otero Mesa plan. "The federal government just got notice that, if they want to drill in Otero Mesa, this governor and this state are going to fight them," Richardson said at a rally in Albuquerque earlier this year (Cart 2004).

Recently, Richardson sharply criticized BLM's proposal in an official review. "I have found numerous inconsistencies with state laws, rules, policies, programs, and plans, particularly those that relate to protecting the Chihuahuan Desert and New Mexico's ground water," he wrote (Richardson Consistency Review 2004).

In a supplement to the proposed plan — and in response to Richardson — BLM recently proposed that 35,000 acres of the grasslands be off-limits to drilling. In the December 2003 plan, BLM had said that the 35,000 acres would be closed to drilling now, but reevaluated for drilling every five years (BLM Otero Supplement 2004, 3; Herrera 2004).

Small Amounts of Energy

How much gas does BLM hope to develop by weakening protections for sensitive habitat? Not much. "I think there's a huge question mark about whether there's ever going to be an economically viable resource that anyone will want to produce," said Linda Rundell, the BLM's state director. "It's really pretty small potatoes" (Cart 2004).

BLM has declared that the area has a "medium and low potential for oil and gas" and that oil and gas resources would be developed "on a small scale" (BLM FEIS 2003, 4-2).

A 2003 study by the New Mexico Bureau of Geology and Mineral Resources (BGMR) indicates just how low the potential for oil and gas could be. According to the BGMR, the entire state of New Mexico has a minimum of 1.48 billion barrels of oil and between 68 and 89 trillion cubic feet (TCF) of natural gas. Portions of both the oil and gas are likely not economically recoverable (Broadhead 2003).

To put these figures in perspective, U.S. oil consumption in 2000 was 19.7 million barrels per day, meaning that the entire state of New Mexico would provide the nation with only about 75 days of oil. The U.S. used about 23 TCF of natural gas in 2001 — a figure that is expected to rise to 35 TCF per year by 2025. Thus, at 2001 levels of consumption, the entire state of New Mexico would provide the nation with about three to four years of natural gas. The Otero Mesa is only a small portion of the state of New Mexico. Thus, the Otero Mesa would likely produce only a fraction of the state's already small supply of oil and gas (USDOE Natural Gas 2004; USDOE Oil Consumption 2004).

Governor Richardson wrote that 110 wind turbines could produce the same amount of energy produced by the likely number of oil and gas wells in Otero Mesa (Richardson Consistency Review 2004).

References:

Albuquerque Journal (Albuquerque Journal). 2004. Corrections. January 20, 2004, B1. The correction noted that an earlier story should have quoted "George Yates, president of Roswell-based HEYCO, as having said that the New Mexico side of the [Otero Mesa] basin could hold as much as 1 trillion cubic feet of recoverable natural gas" (brackets EWG's). The earlier article should be cited as follows: Soussan, Tania. 2004. Activists Want Land Protected. Albuquerque Journal. January 11, 2004, B1.
Broadhead, Ronald F (Broadhead). 2003. Remaining Oil and Natural Gas Resources of New Mexico. New Mexico Bureau of Geology and Mineral Resources. Accessed online June 3, 2004 at geoinfo.nmt.edu/staff/
broadhead/documents/ RemainingoilandgasinNM_002.pdf.
Bureau of Land Management. 2000. Draft Resource Management Plan Amendment (RMPA) and Environmental Impact Statement (EIS) for Federal fluid minerals leasing and development in Sierra and Otero Counties. Accessed online at http://www.nm.blm.gov/lcfo/white_sands_rmpa_eis
/white_sands_rmpa_eis.html.
Bureau of Land Management. 2003. Proposed Resource Management Plan Amendment and Final Environmental Impact Statement for Federal Fluid Minerals Leasing and Development in Sierra and Otero Counties. Accessed online June 3, 2004 at http://www.nm.blm.gov/lcfo/white_sands_rmpa_eis
/white_sands_rmpa_eis.html.
Bureau of Land Management. 2004. Supplement to Proposed Resource Management Plan Amendment and Final Environmental Impact Statement for Federal Fluid Minerals Leasing and Development in Sierra and Otero Counties. Accessed online June 6, 2004 at http://www.nm.blm.gov/lcfo/white_sands_rmpa_eis
/white_sands_rmpa_eis.html.
Cart, Julie (Cart). 2004. Bush Drilling Plan Brings Foes Together; Ranchers, Hunters and Environmentalists Decry a Bid to Draw Natural Gas from New Mexico Wilds. The Los Angeles Times. February 11, 2004.
Herrera, Pete (Herrera). 2004. BLM Agrees to Governor's Otero Mesa Public Comment Proposal. Associated Press. May 20, 2004.
New Mexico Wilderness Alliance, Coalition for Otero Mesa. 2004. Accessed online at http://www.oteromesa.org/.
Richardson, Bill. 2004. Governor Bill Richardson's Consistency Review of and Recommended Changes to the United States Department of the Interior, Bureau of Land Management's Proposed Resource Management Plan Amendment and Final Environmental Impact Statement for Federal Fluid Minerals Leasing and Development in Sierra and Otero Counties. Accessed online June 4, 2004 at http://www.oteromesa.org/.
U.S. Department of Energy (USDOE Natural Gas). 2004. Natural Gas Fundamentals from Resource to Market. Accessed online May 24, 2004 at http://www.energy.gov/engine/content.do?BT_CODE=NATURALGAS.
World Wildlife Fund. 2004. Global 200: Blueprint for a Living Planet. Accessed online June 4, 2004 at http://www.panda.org/about_wwf/where_we_work/ecoregions
/global200/pages/home.htm and http://www.panda.org/about_wwf/where_we_work/ecoregions
/global200/pages/regions/region131.htm.