Magazine

So Much for Those Wide Open Spaces


By Hal Clifford

Dan M. "Buck" Brannaman sits easily on a skittish chestnut quarter horse, his gray eyes smoldering. "It's not a matter of writing a check and making me go away," he says evenly. "If it was about money, I wouldn't be ranching. My ranch is torn to hell. They have literally shut down my cattle operation."

A ride over a nearby hill reveals the source of Brannaman's anger: A 600-acre draw has been rearranged by earth-moving machines. Several small reservoirs have been gouged into the creek bottom. On the surrounding hillsides, a half-dozen drill pads have been carved out, each big enough to build a house on. Lengths of drill pipe rust on a staging area bulldozed into a pasture. Dirt roads slice haphazardly across the dry grassy slopes. The drilling company, Paxton Resources LLC of Gaylord, Mich., hasn't reseeded the disturbed areas, and Brannaman won't let cattle graze there, since the animals would worsen the ongoing erosion and hasten the loss of topsoil.

What's behind--or, strictly speaking, underneath--all this destruction is coal-bed methane, a form of natural gas. Although Brannaman, 39, owns the surface rights to his 1,100-acre ranch near Sheridan, Wyo., like many landowners across the West he does not own the mineral rights--and under the 1872 Mining Act, those take precedence. If the owner of a mineral right wants access, the surface owner has to grant it--and there's the rub for ranchers.

Americans are hungry for natural gas, and now the technology exists to extract that gas from coal, which lies beneath the 20,000-square-mile Powder River Basin in abundance. By some estimates, the basin contains 39 trillion cubic feet of recoverable gas, enough to supply the U.S. for more than a year. As a result, surface owners here find themselves at the mercy of a new energy boom. Coal-bed methane (CBM) has become the latest energy play in northeastern Wyoming, a region that bases its economy on energy production--principally open-pit coal mines--but has never seen anything like the intensive development that CBM is bringing to the landscape. What is happening here could spread to other coal-rich parts of the country as the technology is perfected and demand for gas rises.

CBM drilling lays down a web of industrial development over a previously wide-open, lonely landscape. In the process, it is drastically changing life for many of northeastern Wyoming's ranchers and hunting outfitters. Drillers traditionally compensate surface owners here for disturbance to their land, but landowners still face the prospect of seeing their ranches turned into gas fields, and even the best-run field isn't the ranch it once was.

BURIED DEEP. To extract methane, drillers sink wells into coal, which lies a few hundred feet beneath the surface. That's a much cheaper proposition than drilling for traditional natural gas, often buried thousands of feet deep. Water is then pumped from the coal, reducing the pressure in the coal bed and releasing the methane in much the same way that popping the top on a soda can release the dissolved carbon dioxide.

Almost 11,000 CBM wells have been drilled in the Powder River Basin, most during the past two years. Well pads are spaced 80 acres apart on the open, rough prairie; the well heads are housed in garden shed-size hutches. Each pad is serviced by a power line, a gas-collection line, a water-disposal pipeline, and an access road. "Now, what does that sound like?" asks Deborah G. Steward, coordinator of the CoalBed Methane Counties Coalition, a five-county government agency based in Buffalo, Wyo. "Kind of like an 80-acre ranchette."

That's precisely what has ranchers here upset. CBM development has practical effects for ranchers, shrinking pastures and disturbing water supplies. But it has an aesthetic and emotional effect, too. In this part of the High Plains, ranches run to 50,000 acres or more. People who work them tend to value elbow room--lots of it.

Peter J. Dube bought his spread, a relatively small 4,700 acres, in 1995, planning to guide visiting hunters on it. The rough country, with steep hills and hidden draws, shelters trophy mule deer and antelope. Most of the mineral rights beneath Dube's property, however, are owned by the U.S. Bureau of Land Management (BLM), and Dube expects an onslaught of drilling rigs soon.

"IT'S GONE." The BLM owns 10% of the surface rights in the Powder River Basin but 56% of the mineral rights. Once an environmental study is completed next July, ranchers expect a second wave of development as the BLM leases its gas for drilling. As many as 50,000 CBM well pads are projected in the basin by 2010, and 139,000 may eventually carpet what is now mostly open land.

Some of the privately held mineral rights on Dube's ranch already have been developed by CMS Oil & Gas, one of dozens of drillers in the basin, some wildcatters, some major energy companies. The result makes him gnash his teeth. "When I bought it, there was nobody out there," says Dube, 40, who sports a white snap-button shirt and a droopy mustache. "Now you ride up there, it's crisscrossed with roads, there's trucks everywhere. The very thing that everybody wants to get to, the solitude and the peace, it's gone. And you can't get it back."

There isn't much dewy-eyed sentimentality about nature in the Powder River Basin. Motel lobbies are plastered with snapshots of sportsmen posing with their trophies. Nor is this wilderness; it has been grazed by sheep and cattle for more than a century. Still, it is possible to stop on a back road, gaze 10 or 20 miles in every direction, and see little sign of man.

Gas-drilling companies concede that their work is intrusive. "It's a difficult situation, because there's no good way for me to deal with a rancher who has lived out in the middle of nowhere all his life and likes it that way," says Terrell A. Dobkins, vice-president for production at Pennaco Energy Inc. (PN), a subsidiary of USX-Marathon Group (MRO). "I can't just go away." Besides, he says, "development in the Powder River Basin has done some really good things. It has increased income dramatically for the people who own the mineral rights, for the state, and for the federal government." The state of Wyoming will earn $26 million in taxes from CBM in 2001.

Drilling companies--there were 130 operating in the basin this past summer, although that number has fallen along with the price of natural gas--negotiate "surface damage agreements" with landowners. Owners who don't want to negotiate can't stop drillers, who under federal law hold a superior property right, so almost all ranchers do make a deal. Terms vary widely, depending on how eager each party is; some deals may pay ranchers tens of thousands of dollars annually, others only a few hundred. If an owner also controls some or all of the mineral rights, he or she is in for a share of royalties, too. Some ranchers in this position have been quite happy to lease out their minerals and welcome drillers. "I'm all for it," says Jack Cooksley, a retired rancher who has seen 22 wells drilled on his land near Ucross.

The Wyoming Outdoor Council, a small environmental group based in Lander, filed several administrative challenges in 2000 to stop CBM development, arguing that the Bureau of Land Management never adequately planned for it. The council is awaiting a final ruling. But most ranchers in the Powder River Basin accept that CBM is here to say. "This country is not going to tolerate rolling blackouts," says Miles P. Keogh, manager of the 27,000-acre Fence Creek Ranch near the Montana border. "When we have blackouts and brownouts, people say: `Who cares about northeastern Wyoming?' It's a desert in their opinion." Keogh has negotiated what he says is a good deal with First Sourcenergy Wyoming Inc., a Colorado drilling company. But he admits: "It's not going to be the same old ranch you rode out on and there was nothing on it." Clifford, based in Telluride, Colo., often writes about energy and natural resource issues.

EDITED BY Edited by Harry Maurer


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