Thursday, June 10, 2010

Rio Grande Sun--Commission Sides With Landowner Over Drilling (Rio Arriba County)

Normally I try to make very up-to-date posts. This article is about a week old but, as it is very close to home, I decided to post it.

Landowner does not want Texas oil/gas company to drill on his property
By Joe Crawford
SUN Staff Writer
Thursday, June 3, 2010 1:09 PM MDT

A Texas oil company was lectured on being “neighborly” last week as its request to drill on a northern Rio Arriba County ranch was rejected.

For the first time ever, the County Commission exercised its power to deny an application for an exploratory oil and gas well by Approach Resources — at least for now. An unusual procedure by the Commission killed a motion to approve the request but did not formally deny it, meaning it could possibly be resurrected at a future meeting.

Approach plans to start drilling for oil and gas south of Tierra Amarilla next month. The Commission has already approved eight other applications for the company to drill wells in the area since March, when a nearly two-year standoff between the County and the company ended. The negotiation process has so far included a County-wide drilling moratorium, a lawsuit from Approach and hundreds of hours of legal work billed to the County by its attorneys.

The application the Commission rejected May 27 was on a ranch owned by Jerry Barela, the first landowner to ask the Commission to deny Approach’s request to drill on his land. Barela said he was concerned about the operation harming his cattle if the animals consumed contaminated water or other harmful chemicals left by the oil company.

“It’s just not for us,” he said.

As it has done with previous Approach applications, the County Planning and Zoning Department did not recommend approval or denial of the request. Instead, County Planner Louise Pocock only recommended conditions the Commission should include if it approved the application.

Barela said he had recently tried to sell his 964-acre property, but a deal fell through when a prospective buyer was told Approach wanted to drill there. Barela doesn’t own royalties to the mineral rights on his land, and he said he would not profit if Approach struck oil or gas. The state Surface Owners Protection Act requires only that Approach put down a bond in case of damage to the land — the oil company is not legally required to get the landowner’s permission before drilling if it owns the mineral rights to the land. Approach has leased 90,000 acres of mineral rights in the area that includes Barela’s land.

With the previous eight applications, there was no protest from the landowners. Barela’s neighbors, the Spill family, spoke in favor of allowing Approach to drill on their land, where five of the new wells are to be located. One of those family members, Ed Spill, said he hoped to make money if Approach struck oil or gas.

Commissioner Felipe Martinez, who represents the area where the new wells are to be drilled, berated Approach representative Brice Morgan for not communicating enough with the Barelas. Jerry Barela said he received a couple of letters from the company, but there had been little dialogue between he and Approach employees.

“I’m just very, very disappointed,” Martinez said. “We have to strike a balance here, and the first thing we have to do is you have to be neighborly.”

Martinez paused.

“I don’t know — maybe it’s just out of arrogance,” he continued.

After Martinez’s monologue, Morgan stood up and asked to respond, but Commission Chairman Alfredo Montoya told him he wouldn’t be allowed to speak. Morgan declined to comment as he was leaving the meeting, instead referring questions to Approach’s vice president for land, Ralph Manoushagian, who refused to comment.

The Commission never actually voted on whether to approve the application. Commissioner Elias Coriz made a motion to approve the request, and then Martinez and Montoya remained silent. Eventually Martinez said he didn’t intend to second the motion, and Montoya declared the motion failed. The application could still come before the Commission in a future meeting, Montoya and Pocock said after the meeting.

Once the motion failed, Coriz also voiced his contempt for Approach’s public relations practices, but he said he motioned to approve the request because he felt the Commission had already researched the situation well and decided to approve other applications.

“I made the motion because we’ve done a lot of homework,” Coriz said.

The County’s oil and gas ordinance, adopted last year, requires the Commission to use similar criteria to evaluate drilling applications to that it uses to decide whether to allow new subdivisions and businesses. The Commission must base its decisions on whether a development would comply with the County’s Comprehensive Plan and County ordinances, and if a development is compatible with surrounding land uses. Possible costs for roads, utilities and fire response should also be considered, according to County ordinance.

The oil and gas ordinance does state the Commission should consider “any Surface Use Agreement between the Surface Property Owner and the Operator.” But neither that ordinance or the Comprehensive Plan specifically address whether the Commission could deny an application because a landowner doesn’t approve.

Even if the application was not formally rejected, a delay could possibly keep Approach off the Barela land permanently.

Approach has already agreed with the County to drill only between May and September so as not to disturb the area during hunting season. If the County postpones its decision long enough, Approach would not have a chance to drill this summer, when Manoushagian has said the company plans to determine the presence — or lack — of oil and gas in the area. The results of the exploratory drilling this summer will determine whether Approach will proceed with any other drilling in the area next year, Manoushagian has said.

Immediately after effectively rejecting the Approach application, the Commission approved a request by Titan Energy Corporation to drill on a ranch west of Coyote along State Road 96. That ranch is owned by Sergio Morfin, who has argued in favor of the drilling. Coriz and Martinez said they favored the Titan application partly because the oil company was working with the landowner’s blessing.

The conversation about Approach and Titan eventually led Martinez and Montoya to reveal their more general beliefs and attitudes about the oil industry.

“I really think God never intended for oil to be extracted from the depths of the earth,” Martinez said, explaining how using the resource seemed unnatural to him. “Short of burning it, there is really nothing that we can do with it.”

Montoya spoke more specifically about the County.

“I just can’t wrap my hands around how this industry can be compatible with our culture, our customs and our traditions,” he said.

Tax revenues from the oil and gas industry pay for a large chunk of the County government. An interim budget presented to the Commission May 27 projected the County would take in $7 million — more than a third of its total projected revenues — from oil and gas next year.

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