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A years-long fight to protect a pristine Wyoming landscape from oil and gas development appears over, with a Texas energy company and a national conservation group today announcing they have worked out a multimillion-dollar deal to sell and retire a set of contested drilling leases.
Once the deal is finalized to sell them to the San Francisco-based Trust for Public Land for $8.7 million, the leases covering 58,000 acres in the pristine Hoback Basin -- including roughly 20,000 acres inside west Wyoming's Bridger-Teton National Forest -- will be permanently retired, according to the group.
Houston-based Plains Exploration & Production Co. (PXP) has valid leases, some of which are 20 years old, to drill as many as 136 natural gas wells on 17 well pads in and around the national forest. PXP's drilling plan, which dates back to 2005, was vigorously opposed by environmentalists, and the Forest Service and PXP have been haggling for more than two years over what stipulations and mitigation requirements should be included in the drilling permits, which have yet to be issued.
But the Trust for Public Land cautioned today that it is still raising the money needed to purchase the leases, collecting about $4.5 million to finish the transaction, which according to the group must be completed by Dec. 31.
"I am delighted that we have reached an agreement, but we are not finished yet. We must raise an additional $4.25 million by Dec. 31, or the Hoback will again be in jeopardy," said Deb Love, Trust for Public Land's Northern Rockies director.
The Trust for Public Land has set up a
website for those wishing to contribute to the buyout effort.
Among the contributors so far is GOP billionaire Joe Ricketts, a Wyoming resident who has pledged $1 million to the lease purchase effort. Ricketts said today in a statement that the buyout represents "a historic opportunity to permanently protect an invaluable natural resource."
A news conference announcing the deal is scheduled for this afternoon in Jackson, Wyo., about 30 miles north of the Hoback Basin area in question. Wyoming Gov. Matt Mead (R) and representatives with the Trust for Public Land, among others, are expected to attend.
"This is an outstanding outcome for the people of Wyoming -- a true 'win-win' resolution," Mead said in a statement. "It respects both the wishes of local residents and the legal rights of leaseholders."
Finding common ground
Supporters also say the agreement builds on the Wyoming Range Legacy Act, sponsored by Sen. John Barrasso (R-Wyo.) and signed into law in 2009 by President Obama.
That law permanently removed 1.2 million acres in and around the Bridger-Teton forest from energy development, but it grandfathered more than a dozen existing drilling leases covering roughly 120,000 acres, including some of those PXP planned to use.
About 85 percent of the acreage covered in the lease-purchase agreement is within the boundaries covered by the Wyoming Range Legacy Act.
"From the first day the Wyoming Range Legacy Act was passed, PXP has repeatedly stated our willingness to consider a buyout of our lease position if a valid offer were tendered," said Steve Rusch, PXP's vice president of environmental, health and safety, and government affairs. "Today's announcement fulfills that pledge."
Rusch, who said the mixed long-term outlook for natural gas prices has shifted PXP's focus to "higher-priced oil," insisted the company could have drilled in the Wyoming Range in an "environmentally sensitive manner."
But the buyout proposal, he said, "represented an opportunity that was advantageous for all parties involved."
"Throughout the history of this project, we have focused our efforts on collaborating with stakeholders willing to seriously engage on the issues," Rusch said. "The Trust for Public Land reached out to PXP, and subsequent discussions exemplify the types of successes that can be realized when diverse parties seek to find common ground."
Long, contentious fight
PXP's plans had been a source of controversy since the company first proposed drilling in the 3.4-million-acre Bridger-Teton forest, whose combination of majestic mountain vistas, big-game wildlife, and proximity to both Yellowstone and Grand Teton national parks makes it one of the West's most iconic landscapes.
The Forest Service released a draft environmental impact statement (EIS) in December 2010 that, among other things, outlined mitigation measures to protect forest resources, including restricting construction and operation activity in moose crucial winter range between November and April, and elk calving areas between May and June.
The Forest Service received about 60,000 comments to the draft EIS, and the vast majority were against the drilling project.
PXP made a significant effort to address the public concern.
In late 2010, PXP and two advocacy groups -- Wyoming Sportsmen for Fish and Wildlife and the Wyoming Outfitters and Guides Association -- announced they had negotiated an agreement under which the company would be allowed to drill the wells but would not apply for any additional drilling permits, and would pay more than $6 million to protect wildlife habitat and monitor air and water quality in the area (Land Letter, Dec. 16, 2010).
The agreement included a commitment by PXP to permanently remove from drilling 28,240 acres inside the Bridger-Teton forest where the company has a valid drilling lease west and north of the Hoback River, and to set aside a 4,000-acre corridor for big-game migration and livestock grazing.
In addition, PXP committed to establishing a $4 million Fish and Wildlife Habitat and Population Fund that would be used "to offset potential impacts to fish and wildlife habitat" caused by the project. And the company agreed to pay $1.1 million for a study to establish baseline water quality data that could have been used to determine whether the drilling activity is polluting groundwater, and $400,000 to help the Wyoming Department of Environmental Quality monitor air quality in the region, including Sublette County, a heavily drilled area of the state that has been plagued in recent years by wintertime ground-level ozone pollution.
Despite the extensive nature of the agreement, it was sharply criticized by high-ranking staff members of former Wyoming Gov. Dave Freudenthal (D), and it did not sit well with some Wyoming conservationists, including Dan Smitherman, a spokesman for Citizens for the Wyoming Range, a coalition of residents and business owners opposed to the PXP drilling proposal.
They questioned whether the agreement required PXP to do much beyond what the Forest Service would have required the company to do anyway, such as establish baseline groundwater quality data.
But Smitherman said in an interview today that the lease buyout plan is a good solution, and that they are "optimistic" the rest of the money needed to complete the transaction will be raised by year's end.
"I'm ecstatic, there's no other way to put it," Smitherman said of the deal. "It's certainly the best outcome. We had a Wyoming problem, and we got Wyoming people involved, and we have a Wyoming solution. It just doesn't get any better than that."