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Ranchers Join Fight To Limit Drilling at Otero Mesa
The Albuquerque Journal (subscription required) ^ | July 31, 2003 | Tania Soussan

Posted on 07/31/2003 10:42:25 AM PDT by CedarDave

Thursday, July 31, 2003

Ranchers Join Fight To Limit Drilling at Otero Mesa

By Tania Soussan Journal Staff Writer


    Otero Mesa ranchers and a group that campaigns to protect private property rights are joining environmentalists in a fight to limit new oil and gas drilling in a remote but highly valued expanse of southern New Mexico.
    "What's right is right," said G.B. Oliver III, executive vice president of the Paragon Foundation and president of Western Bank in Alamogordo. "Our goal is the same."
    The biologically rich grassland, which could hold significant natural gas reserves, has attracted national attention.
    Environmentalists say new drilling and the roads that go along with it would damage one of the last remnants of healthy Chihuahuan Desert grassland in New Mexico and reduce wildlife habitat. Oil and gas drillers have said the BLM's restrictions would pose an economic hardship.
    Directors of Alamogordo-based Paragon, devoted to defending private property rights, voted this week to get involved on behalf of the area ranchers and to work with the New Mexico Wilderness Alliance. The ranchers and the foundation are mainly concerned with the potential for ground-water contamination and damage to rangeland.
    "There's some areas out there that should be out of the drilling because they're vulnerable," said Bob Jones, a rancher with public land leases on Otero Mesa and Paragon Foundation president.
    "It's a matter of survival for all of us," he said. "If we can't get them stopped, we're through. All we get out of it is destruction."
    The ranchers and Paragon are the latest voices that have joined the fight to protect Otero Mesa this year.
    New Mexico Gov. Bill Richardson has already asked Interior Secretary Gale Norton to protect the area from expanded drilling until a significant wilderness area is set aside.
    The U.S. Bureau of Land Management is developing new rules to guide oil and gas development in the area, between Las Cruces and El Paso.
    The BLM plans to limit surface disturbance in big chunks of healthy grassland. Only 5 percent of those blocks of land could be occupied by roads, well pads and other facilities at the same time.
    Ranchers and the Paragon Foundation don't want to ban all drilling, Oliver said. They only want the area developed in a way that protects ground water and the land.
    "I'm not going to let 'em destroy that," said Oliver, whose bank has loaned money to Otero Mesa ranchers.
    The ranchers have been wary of new oil and gas development for a long time, but recent actions of one company triggered their anger.
    Threshold Development Co. of Fort Worth dumped dirty water into a reserve pit at an Otero Mesa site where it plans to begin drilling soon.
    The BLM issued a violation notice and ordered the company to remove the water, which it did. But the ranchers say a nasty sludge remains at the bottom of the pit.
    "There's still muck," said rancher Jonna Lou Shafer. "The black stinky stuff is still in the bottom."
    A test by Sandia National Laboratories found more than seven times the total dissolved solids normally in fresh water and the presence of E. coli and coliform bacteria.
    The president and land manager for Threshold were out of town Wednesday and no one else at the company could comment.
    The well pad and pit are on Shafer's BLM allotment on Crow Flat, about 28 miles northeast of Dell City.
    Shafer said she wants Threshold to pump out the remaining sludge and install a new liner. She said she's also worried about soil contamination because the company was dumping water on the pad site and dirt road.
    The ranchers are considering blockading the road to the well site to prevent Threshold from moving in a drilling rig until it finishes cleaning up the sludge, Oliver said.

Copyright 2003 Albuquerque Journal



TOPICS: Business/Economy; Culture/Society; Government; News/Current Events; US: New Mexico; US: Texas
KEYWORDS: drilling; energy; energyproduction; enviroactivists; environment; naturalgas; oilandgas
A test by Sandia National Laboratories found more than seven times the total dissolved solids normally in fresh water and the presence of E. coli and coliform bacteria.

I wonder if they also tested the ranchers stock tank and watering hole.

1 posted on 07/31/2003 10:42:26 AM PDT by CedarDave
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To: CedarDave
Paragon working with environmentalists??????

My weird-shit-o-meter just pegged. I'm gonna go crawl in my bomb shelter.
2 posted on 07/31/2003 10:49:13 AM PDT by FreeInWV
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To: CedarDave
In other news, the united States is still dependant on terrorist sponsoring nation Saudi Arabia...
3 posted on 07/31/2003 10:55:04 AM PDT by Dr Warmoose
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To: CedarDave
Maybe we should study the effects of cattle ranching on the environment.

Most people have a view of oil production that comes out of old movies. There are ways of drilling in sensitive areas that take up very little space, and the oilfields in these cases can be almost pristine.

And oil companies these days are aggressive about cleaning up spills. I have seen them in action, and within hours of even a major spill you wouldn't know there had ever been a problem.

A runoff pond is not going to destroy the grasslands. In fact, even major production will not destroy a grassland. Endangered species live quite comfortably alongside production wells, as do every other kind of critter. In our area, for a number of years we were having to jump through hoops to protect kit foxes. But the kit foxes already lived in the oil fields, in fact I have spotted them in town. Oil production, especially modern production, endangers nothing.
4 posted on 07/31/2003 10:57:27 AM PDT by marron
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To: Grampa Dave; BOBTHENAILER
Please pass on to your PING lists.
5 posted on 07/31/2003 10:59:34 AM PDT by CedarDave (The Dems look for a shadow on the brightest day, call it the dark of night and blame George W. Bush)
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To: CedarDave
None of those ranchers would be grazing those grasslands, would they?...
6 posted on 07/31/2003 11:06:18 AM PDT by talleyman (Caviar emptor (a warning from the sturgeon general))
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To: talleyman
What grass? There ain't none. Ever driven between El Paso and Alamogordo??
7 posted on 07/31/2003 11:12:17 AM PDT by CedarDave (The Dems look for a shadow on the brightest day, call it the dark of night and blame George W. Bush)
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To: marron
And oil companies these days are aggressive about cleaning up spills. I have seen them in action, and within hours of even a major spill you wouldn't know there had ever been a problem.

Some are and some aren't. Depends on the corporate culture and the local regulatory agency. The big boys are pretty good about that stuff, but some independents just trying stay alive on a 5 bbl/day stripper well will dig and cover if it makes the difference between operating and shutting down.

8 posted on 07/31/2003 11:16:20 AM PDT by CedarDave (The Dems look for a shadow on the brightest day, call it the dark of night and blame George W. Bush)
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To: CedarDave; Gabrielle Reilly; Grampa Dave; SierraWasp; Ernest_at_the_Beach; farmfriend; The Hose
The Otero Mesa is just one more example of enviro extremism hindering a valid, safe, relatively harmless search for natural gas. It Is a friggin' travesty.

A national data base for these lawsuits needs to be established and you are right, anybody who has ever traveled that area would immediately recognize the frivolous nature of this mess.

9 posted on 07/31/2003 1:06:20 PM PDT by BOBTHENAILER (One by one, in groups or whole armies.....we don't care how we getcha, but we will)
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To: CedarDave
What grass? There ain't none. Ever driven between El Paso and Alamogordo??

Well there are few blades on the side of highway 54.

10 posted on 07/31/2003 1:09:02 PM PDT by Recon by Fire
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To: BOBTHENAILER; AAABEST; Ace2U; Alamo-Girl; Alas; amom; AndreaZingg; Anonymous2; ApesForEvolution; ...
Rights, farms, environment ping.

Let me know if you wish to be added or removed from this list.

11 posted on 07/31/2003 5:15:43 PM PDT by farmfriend ( Isaiah 55:10,11)
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To: CedarDave
Threshold Development Co. of Fort Worth dumped dirty water into a reserve pit at an Otero Mesa site where it plans to begin drilling soon.

I've never seen one filled with Culligan water. I guess I must have missed the latest regulation printed in CFR.

12 posted on 07/31/2003 5:19:38 PM PDT by Dog Gone
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To: CedarDave
Someone clue me in here. Why would this be a private property rights issue? The drilling would be on BLM land, right?
13 posted on 07/31/2003 5:34:03 PM PDT by Double Tap
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To: Double Tap
Ranchers and oil companies always fight -- unless the rancher owns the mineral rights and leases them to the oil company for $$, and even then they fight over royalties. In this area most of the mineral rights are federal and the surface can be private, state or BLM. If the rancher has made improvements at his own expense, he doesn't want those damaged. And surfaces damages do occur -- anything from a rig or support truck hitting a cattle guard to having someone drive off the right of way. I know - I've seen it. I try to stay on the pads though -- those nasty mesquite are just too much for my truck tires. Last week I had to patch two because of leaks.
14 posted on 07/31/2003 7:05:31 PM PDT by CedarDave (The Dems look for a shadow on the brightest day, call it the dark of night and blame George W. Bush)
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To: CedarDave
Oh, I know all about landowner/leaseholder issues. My father runs several stripper well operations and I help him out on occasion.

But this appears to be an issue of ranchers running livestock on BLM land not wanting oil companies to be able to exercise legal leases. That is not a private property rights matter, IMHO.

15 posted on 07/31/2003 7:11:42 PM PDT by Double Tap
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To: Double Tap
I think you nailed it -- there is very little grass there to start with, and taking even a small chunk for pads or roads will mean they have to reduce the number of cows or artificially feed them (which I'm sure they're doing anyway since the monsoons haven't come so far this summer).
16 posted on 07/31/2003 7:43:42 PM PDT by CedarDave (The Dems look for a shadow on the brightest day, call it the dark of night and blame George W. Bush)
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To: Dr Warmoose
In other news, the united States is still dependant on terrorist sponsoring nation Saudi Arabia...

The U.S. buys oil from Saudi Arabia not natural gas. The Otero Mesa area is a potential natural gas field, even if it turns out to be a huge producer it will not effect the U.S.'s oil imports from Saudi Arabia or anybody else.

17 posted on 07/31/2003 8:04:42 PM PDT by FreeLibertarian (You live and learn. Or you don't live long.)
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To: FreeLibertarian
The U.S. buys oil from Saudi Arabia not natural gas.

I fully recognize that. I also recognize that natural gas and oil also serve as fuels for electric generating plants. When the price of one goes up, then those plants that can use the other, do so.

Natural gas is enjoying great populatity right now despite its relatively high price because the EPA makes oil burning that much more expensive. Given domestic source of both natural gas and oil, the costs of electrity generation drop which usually serves as a great way for domestic industries more competitive in the world market. With more oil available, the increased supply would reduce the demand for the more expensive natural gas. With the fickle situation of the Middle East, oil futures laden with risk aversion tend to run higher making natural gas consumption higher, decreasing the supply...

Natural gas only plays a part in the energy equation.

18 posted on 07/31/2003 8:21:18 PM PDT by Dr Warmoose
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To: Dr Warmoose
I fully recognize that. I also recognize that natural gas and oil also serve as fuels for electric generating plants. When the price of one goes up, then those plants that can use the other, do so.

Oil is far too expensive to use as a fuel for electrical generation except under extreme or emergency conditions; for example portable generators use diesel fuel because of its availabilty for rapid deployment situations. Oil is not even considered as a fuel for site built power plants except for emergency backups, for example during a disruption of the gas supply dur to pipeline problems.

New electrical generation power plants use natural gas in a gas turbine configuration because of the ability to bring the plants online very rapidly, the overall efficency of the gas turbine design, and their extremely low emmissions. The gas turbine can be used most effectively in a demand management or "peaking" profile. Oil is far too expensive to use in a similar configuration except on a local basis primarily as diesel generators. Typically this occurs during demand curtailment periods when extremely high demand charges are in effect. Even those applications are gradually being converted to natural gas sources as new equipment and distribution systems become available.

Almost all base load power plants use coal as the fuel source because of it low cost.

A very few antiquated oil burning power plants still exist nationwide but they are never used except on an emergency basis and are being phased out as rapidly as possible. They are far too expensive to operate. Natural gas is enjoying great populatity right now despite its relatively high price because the EPA makes oil burning that much more expensive. Given domestic source of both natural gas and oil, the costs of electrity generation drop which usually serves as a great way for domestic industries more competitive in the world market. With more oil available, the increased supply would reduce the demand for the more expensive natural gas. With the fickle situation of the Middle East, oil futures laden with risk aversion tend to run higher making natural gas consumption higher, decreasing the supply...

Natural gas only plays a part in the energy equation.

The price of oil would have to drop to pre-1973 levels and remain there for an extended period of time before it would become viable as an alternative source for cost effective electrical generation. Even then a huge investment in infastructure modifications would be required. Obviously neither of those things is going to happen.

The price of natural gas has risen because we have greatly increased its usuage for the previously mentioned "peaking" generators. Even if all EPA regulations concerning oil burning were revoked oil would not be a competitor for natural gas for electrical generation purposes.

19 posted on 07/31/2003 11:44:50 PM PDT by FreeLibertarian (You live and learn. Or you don't live long.)
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To: farmfriend
BTTT!!!!!
20 posted on 08/01/2003 3:08:45 AM PDT by E.G.C.
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To: FreeLibertarian
Oil is far too expensive to use as a fuel for electrical generation except under extreme or emergency conditions;

I really don't know where you get that information. I remember that the South Texas nuclear power plant was shutting down a reactor and that was why Austin customers were supposed to pay more for electricity. Articles galore show that oil is marginally cheaper than natural gas.

A very few antiquated oil burning power plants still exist nationwide but they are never used except on an emergency basis and are being phased out as rapidly as possible

Then what is this business with Florida having the majority of their plants capable of burning both oil and gas and only one burning coal (and the other is in Georgia)?

21 posted on 08/01/2003 4:53:40 AM PDT by Dr Warmoose
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To: Double Tap; farmfriend; CedarDave; Dog Gone; Grampa Dave
But this appears to be an issue of ranchers running livestock on BLM land not wanting oil companies to be able to exercise legal leases. That is not a private property rights matter, IMHO.

You're right, the complaining ranchers have "grazing leases" from the BLM. This is not a property rights issue.

If I remember the acres/steer ratio in this area it is around 160 acres per steer for feed purposes. In addition, if any of these ranchers did own their minerals, they would be falling all over themselves to see the production on their land. The wells in this area drilled and tested are well in excess of 1 million cubic feet of gas per day (1mmcfpd). At today's prices a rancher with minerals could stand to make between $12,000 to $20,000 PER MONTH, from a drill pad and access roads that would, at best, take up 1 acre for the pad and maybe an acre or two from the necessary two-track access/pipeline roads.

Anybody here think they can come close to that with livestock?

22 posted on 08/01/2003 6:26:36 AM PDT by BOBTHENAILER (One by one, in groups or whole armies.....we don't care how we getcha, but we will)
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To: Dr Warmoose
I really don't know where you get that information. I remember that the South Texas nuclear power plant was shutting down a reactor and that was why Austin customers were supposed to pay more for electricity. Articles galore show that oil is marginally cheaper than natural gas.

Experience, many of those plants are using Control Systems that I designed and programed.

Shutting down a reactor is the type of unusual event that I refered to previously. As you can see from your link the price for electrical generation from nuclear power is much lower than other sources. "In cents per kilowatt-hour, averaged 1.45 for coal, 2.41 for oil, 2.84 for natural gas and 0.5 for uranium in 1999".

The Austin customers power bill went up because they were forced to revert to an older "legacy" base load plant that was not as efficent as modern units. Many legacy units were built before the 1973 oil crisis and are dual fuel (oil/gas) units. Those plants normally fire the units on oil for a short period of time at least once a year to insure that everything is in working order and to cycle the fuel oil through the storage tanks. This is the type of unusual event to which I previously refered. Running one of those units for an extended period of time certainly would raise the power bills.

Another factor in the operating cost that does not show up in the cost per BTU is the time required to bring a legacy unit online. Legacy units can require many hours to bring the boilers to operating temperature and then "roll up" the steam turbines. No electricity is produced during this period of time although fuel is being consumed. This cost is reflected in the cost per KWH but not BTU.

Then what is this business with Florida having the majority of their plants capable of burning both oil and gas and only one burning coal (and the other is in Georgia)?

The breakdown that you found does not show the mix of units at each site. Natural gas turbine combined cycle plants for base load operation and simple cycle gas turbines for peaking are now the industry standard. Those units do not burn oil but are often built at sites where existing oil/gas base load units are already in place. That is why your table shows those sites to be oil/gas.

The demand for gas turbines is so high that until a little over a year ago when the economy softened G.E., the primary manufacturer was gving a 12 year lag time between order and delivery. That has decreased recently but the wait time is still several years. In general as the new gas turbine units are placed in service the older oil/gas units are placed on reserve duty.

Many years ago FPL invested heavily in Nuclear Power for its base load operations. As you can see, they have a mix of nuclear, coal, gas turbine, and oil/gas units. The coal unit being in Georgia doesn't mean much. Florida Power & Light is building Wind Turbine farms in New Mexico and selling the power to PNM.

I can't remember the last time that anyone built a conventional base load oil/gas type power plant. As far as I know none have been built since about 1970. Those units are still in place but rarely used but I do know of three natural gas fired base load units built in 1941 that are in daily use. Those are a special case due to special circumstances. The recent increases in the price of natural gas have made the producers more willing to use oil for extended periods of time, almost doubling this year, but this is still a small percentage of overall consumption.

I beleive there may still be some strictly oil fired units still in service in the N.E. U.S. but I doubt they see much service.

As far as this all applies to the original Otero Mesa story the ranchers just want to insure that the drillers/producers don't destroy a very fragile ecosystem while bringing the natural gas to market. This can be accomplished by minimizing the footprint of the drill sites. Directional drilling techniques should do the job.

If the Otero Mesa was in full production tomorrow you might see your electric bill drop slightly but its effect on the US's oil consumption would be minimal at best.

Here are some links with more data if you are interested.

http://www.eia.doe.gov/fuelelectric.html

http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html

http://www.fe.doe.gov/coal_power/special_rpts/market_systems/appc.pdf

23 posted on 08/01/2003 7:40:54 AM PDT by FreeLibertarian (You live and learn. Or you don't live long.)
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