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Oil Drillers Fight To Tap Otero Mesa

By Tania Soussan
Journal Staff Writer
    Otero Mesa at first glance is a dusty and desolate chunk of land just this side of the Texas border.
    But it has inspired a broad coalition of conservationists and others to rally for its protection while oil and gas drillers fight tenaciously— with powerful political clout on their side— for the right to sink wells into what might be a lucrative new natural gas field.
    Why all the fuss?

For the Record: This story has been corrected to quote George Yates, president of Roswell-based HEYCO, as having said that the New Mexico side of the basin could hold as much as 1 trillion cubic feet of recoverable natural gas. Yates added, ³Itıs far too early in the exploration process to estimate the basinıs ultimate potential.² The story also has been corrected to show that two dry wells drilled in the Otero Mesa area last summer do not belong to HEYCO.

    National and New Mexico environmental groups argue Otero Mesa is a place of stark beauty where wildlife thrives, rare Chihuahuan Desert grasslands remain intact and people still can find solitude. It's a place that should be protected before it ends up looking like the oil fields around Carlsbad or Farmington, they say.
    The oil and gas industry says the nation needs new domestic oil and gas production to reduce its reliance on foreign sources and to keep prices low for consumers. They believe Otero Mesa holds a potentially huge new reserve of natural gas.
    The area— about 1.2 million acres between Carlsbad and El Paso— also is a symbol of the national debate over oil and gas drilling versus environmental protection on public lands.
    "It seems to have become like the ANWR of the Southwest," said Bureau of Land Management state director Linda Rundell.
    While Otero Mesa has not been as much in the news as the Arctic National Wildlife Refuge, it has attracted attention from The New York Times, been featured in a BBC News broadcast, and referred to as "New Mexico's fabled Otero Mesa" in Mother Jones magazine.
    "It's one of the places that tells the story about the impact of the Bush energy policy," said Pam Eaton, of the Wilderness Society, in a telephone interview.
    Otero Mesa has been on the radar of White House policy advisers. It was one of 15 exploration and production areas that the oil and gas industry asked the Bush administration's Task Force on Energy Project Streamlining to help open to new drilling.
    The Bush administration advocates opening more federal land to oil and gas development. Sen. Pete Domenici, R-N.M., chairman of the Senate Energy and Natural Resources Committee, and Rep. Steve Pearce, R-N.M., support drilling on Otero Mesa. Gov. Bill Richardson, however, has opposed new oil and gas development there until a significant wilderness area is set aside.
    Last week, the U.S. Bureau of Land Management released a plan to guide oil and gas development on Otero Mesa. The industry says the plan is still too restrictive, while conservationists say it falls far short of protecting the area. Protests and legal challenges, potentially based on an alleged lack of public involvement, are expected.
Breaking ground
    George Yates, president of Roswell-based HEYCO, in 1997 drilled the first exploratory well in the Otero Mesa grassland that piqued the interest of the oil and gas industry.
    When he and others asked the BLM to put more land up for lease in 1998, Rundell— a wildlife biologist and then manager of the BLM's Las Cruces office— put on the brakes.
    There were no environmental restrictions on the books at the time, so she started a new planning process and called a halt to new leases.
    Rundell, who left the Las Cruces office and spent some time as the BLM's associate state director in Alaska, returned to New Mexico in 2002 to find the debate over Otero Mesa raging.
    "I was amazed at the level of controversy," she said. "It's very hyped up. It's almost like mass hysteria on both sides."
    One reason Rundell doesn't understand the ferocity of the debate is that the BLM believes Otero Mesa has "pretty low potential" for oil and gas.
    She said the industry's actions back up what the BLM geologist says.
    Yates' company has not yet developed its existing leases, two new wells drilled by other companies last summer were permanently plugged when they came up dry and the 69,000 acres or so of leased state land in the area is not being developed, Rundell said.
    Yates has said there could be as much as 1 trillion cubic feet of gas just on the New Mexico side of the basin, compared with remaining known reserves of about 16.5 trillion cubic feet in the rest of the state. Bob Gallagher, president of the New Mexico Oil and Gas Association, has called Otero Mesa "potentially one of the largest new gas finds in the western United States."
    But the industry acknowledges there are a lot of unknowns about what lies below Otero Mesa in the Orogrande basin. The basin lies between the Guadalupe Mountains and El Paso, extending across parts of New Mexico's Sierra and Otero counties and Hudspeth County in Texas.
    Much more exploration is needed, but companies are not willing to take the financial risk unless they know they will have the access they need to make it economically viable, Yates said.
    "The one thing we do know is it has all the (geologic) ingredients needed to be a good oil- and gas-producing basin," he said.
    Yates said he sunk lots of money into early exploration. Now, he's fighting for a chance to get a return on his investment.
    "We bought the car," he said, "but somebody took the steering wheel. We can't drive it."
    He and Gallagher agreed there is a chance no companies will ever sink another well on Otero Mesa.
    But "that's truly not the issue," Gallagher said. "The issue is those lands ought to be managed as multiple-use lands."
    The industry says new technology makes it easier to tap oil and gas reserves without hurting the environment, and they say it will be possible to reclaim the grasslands of Otero Mesa once drilling is complete. Environmentalists, however, say reclamation won't succeed because the grasslands are fragile and the soils shallow.
    Steve Capra, associate director of the New Mexico Wilderness Alliance and a key organizer for the 21-member Coalition for Otero Mesa, said he doesn't think there's much oil or gas in the area.
    "Be that as it may, they'll destroy the place trying to find it," he said.
Limited drilling
    The BLM's new oil and gas management plan— which covers both Otero and Sierra counties— limits the industry to drilling 140 exploratory wells, of which a maximum of 84 could be producing wells, over the next 20 years.
    By comparison, the BLM's plan for the San Juan Basin near Farmington envisions almost 10,000 new wells over the next 20 years.
    Capra said that doesn't belittle the potential damage that a relatively small number of wells could cause on Otero Mesa.
    "Farmington is practically a national sacrifice area. ... The landscape has been demolished," Capra said. "Down on Otero Mesa, it's a wild landscape. It's never been touched basically."
    Eaton said Otero Mesa is a special place. "It has incredible wildlife. It has wilderness characteristics. It has grasslands and sort of an ecological integrity that is being eroded elsewhere in southern New Mexico."
    The New Mexico Conference of Churches, which represents 460 churches and more than 600,000 New Mexicans, also wants to protect Otero Mesa's "natural beauty," said the Rev. Barbara E. Dua, the organization's executive director.
    "We have a commitment to the environment and to preserving the land," she said. "Otero Mesa is one of the few wilderness places left and it should be preserved."
    Otero Mesa has very little development— a network of dirt roads, some ranching and a few inactive oil and gas wells. Pronghorn sometimes seem more common than people. There are old petroglyphs, remains of a 19th century Butterfield stagecoach stop and more than 200 bird species.
    It looks stark now, but area ranchers say a good summer rain could bring back knee-high grass.
    "We're seeing Otero Mesa in difficult times because we've had such a drought," Capra said. "But in good times, it shines."
    Environmentalists have conducted detailed inventories and believe much of the Otero Mesa area should be protected as wilderness, but the federal government so far has disagreed.
    "It's very rural," Rundell said. "A lot of people, myself included, like that kind of desolation, but it doesn't meet our criteria for wilderness."
    Environmentalists say the BLM caved in to industry complaints that the draft plan, released three years ago, was too restrictive.
    The draft, for example, limited new oil and gas wells in large blocks of grassland to within 150 yards of existing roads.
    The industry said the restrictions would force the use of costly directional drilling.
    In its final plan, the BLM opted instead to protect the grasslands by requiring that drilling projects be coordinated to minimize new roads and only 5 percent of each development unit could be occupied by roads, well pads and other facilities at the same time.
    Environmentalists say the 5 percent plan is inadequate, partly because the land disturbance would be spread out over a broad area and also because reclamation would be virtually impossible.
    The battle over Otero Mesa is far from over.
    The public has until Feb. 9 to file protests, and Bill Richardson has 60 days to review the plan and make sure it is consistent with state policies, such as land use or environmental rules.
    Rundell said she's confident the governor will not find any conflicts with state rules, but environmentalists believe Richardson, a former energy secretary, has some power to throw a wrench in the works.
    Meanwhile, the Wilderness Alliance has rented the KiMo Theatre in Albuquerque and chartered buses to bring people from southern New Mexico for a free afternoon of speakers, live music and public comment on Jan. 31.
    The point is to let President Bush and the state's congressional delegation know how New Mexicans feel about Otero Mesa, Capra said. "It's really about reclaiming our state."