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Out to Lunch with Jim Felton: Land Man
In this series of interviews, I talk to Summit
County residents about how they feel and think about politics. This
week I talked to Jim Felton, who was the communications manager for
Breckenridge Ski Resort close to ten years, but for the past two years
has been commuting to Denver to work as a "land man" for a natural gas
exploration company. Felton described his company as gas finders - the
farmers - who sell energy to wholesalers, who then sell to the grocery
stores of energy like Xcel.
Talty: The oil business is
different than the ski business?
Felton: Energy is not a discretionary purchase like a lift ticket. I'm
a land man which means I go out and help negotiate an agreement whereby
we would be permitted to drill, and there are not a lot of pure gas
finders out there. A lot of the companies grow by acquiring smaller
companies, of course there are the Enron's of the world that market the
energy. In our industry, we're price takers, we have to pretty much
take what marketers will offer us for gas. The price makers are what
are called the downstreamers, we're an upstream company, we find it and
literally get it into the pipeline.
Talty: And the current laws and
policy aren't helping this exploration?
Felton: Vague laws, poorly enforced - they are the stock and trade of a
number of the environmental groups that try to assail everything this
industry is trying to accomplish - in a country that has the highest
regulatory standards of any place on the planet. And I'm working for a
company that from the top down has 50 years of prudent operational
experience and has been lauded for the care it takes to handle its
operations and the landowners that share the property. Nonetheless we
are constantly hounded by environmentalist that don't want to win, but
want to keep the struggle alive.
Talty: Isn't a lot of the conflict between the surface land owners who
find out someone owns, and is going to mine, the minerals underneath?
Felton: There's perfect analogy in Summit County. When someone moves
into a subdivision and is told it's natural forest all around them,
that you'll have a trail out the backdoor forever. Then two years
later, there's a bulldozer scraping a parcel behind them. And they say
wait a minute, they were never told, or they never looked into it
themselves, that the land behind them was not forest service land. Most
people in this county were they to look at their deed don't know who
the owner of the mineral estate (under their property) is.
Talty: Conflicts happen when a
gas company that owns this estate wants to put a well right by
someone's house?
Felton: It's akin to living in a place like Iowa saying, there's a corn
field right next to my house. Can you take that to Nevada? The minerals
are where the minerals are. There has been some foresight in this
country about the importance of energy.
Talty: But wouldn't have been
better for us, if companies, like the ones that dredged up the Blue
River, put it back the way it was?
Felton: As we are required to do now. We have to post a bond everywhere
we go. In every industry, there's the five percent that violate a trust
or a notion of fairness, that require the other 95 percent ... that
require a law. They would be cutting their cost by not doing what they
should.
Talty: So that law is good for
the good guys?
Felton: Every business has to operate in the context of public policy,
and sometimes it like Gulliver, where the regulations just lash you to
the ground. One of the most effective tools we've had as an industry is
prying these regulators out of their offices to go to the field and see
first hand how it is done. I think one of the most powerful tools to
show the omnipresence, the importance of energy, is to have an energy
fast day. A day without energy. You can't turn on the lights, can't
turn up the heat ...
Talty: Are you saying
regulation is preventing the extraction of gas?
Felton: What I'm saying is that everything has a cost. The BLM
guidelines call for issuing a permit in no longer than 40 days. You
know what the average is? Almost 180 days. We have a case where the
BLM's regulations for assessing the potential impacts of this project
call for a document that should be no longer than 15 pages, it's now
over 100. The process should take no more than two or three months
we're now into 20 months.
Talty: What are their concerns?
Felton: They are legitimate concerns. They are assessments about what
should be done for weed control, dust control, threatened and
endangered species, water and air quality. These need to be measured
and managed, but there are a number of problems with the process. The
different regulatory agencies require this to be done sequentially, not
concurrently. And remember there's not just the BLM, but Division of
Wildlife, the state and county will be involved, and sometimes the Army
Corp of Engineers. Many instances, you're dealing with a dozen
regulatory agencies, many of whom are asking virtually the same
questions but require a different methodology to get the information
together.
Talty: That process could be streamlined?
Felton: Absolutely. Another instance - if you are in an area where
there has been a history of energy development, in all likelihood there
would be several upwards of a dozen or more similar studies. But none
of the information is gleaned from those studies for your project, so
there's a redundancy that's incredibly inefficient. What people forget
about the BLM is that their charter is for multiple use - to provide
the most benefit for the most people. That's a high ethical standard of
what we should all be thinking with all our actions. Somehow that has
been misconstrued as a mechanism for protecting all lands, and I'm
talking about federal lands that are not parks, are not wilderness
areas. We are not talking about drilling in Yellowstone.
Talty: Here we are in a Republican administration that's pro oil and
gas and they are cutting people from the forest service and the BLM.
Shouldn't we have more federal employees to get these projects moving
quicker?
Felton: If this administration is pro energy development, I'd hate to
see one that is anti. It has been a challenge. We have people on fixed
incomes that are going to have to chose between heat and food or
prescription drugs, and we have companies that have identified likely
mineral resources, in a time when we have low storage levels, and we
can't get that to market. Whose interests are being served? These lands
are for the public benefit. We have been told by some BLM offices that
half of their resources go toward preparing for litigation. Of course,
that too is incredibly inefficient. Every time there is a knee-jerk
decision to appeal or sue - there was an instance in Idaho where there
were over 400 public meeting, over 1.5 million comments, and they were
sued for not providing enough public comment. These are suits that are
outlandish. Whose interests being served? Our children, the country's?
Talty: Environmentalists feel the same way. Clinton's Roadless Rule was
criticized by groups that don't like it, who charged there wasn't
enough public comment - not enough that think the way the opposition
wanted. Places without roads, shouldn't we try to keep them roadless,
because there aren't that many left?
Felton: I, by and large, subscribe to that. Part of the problem with
these sort of federal decrees is that one size fits all. And you've got
to push these decisions down to the people, locally. I can take you to
a place in Wyoming that is an example of great environmental
protection, and I can also show you a picture of it 100 years ago where
it looks like Titusville, Penn. It was oil leaking on the ground,
wooden derricks all over the place. Our own solipsism as a species is
that these are pretty short term footprints in the grand scheme of
things. All this promise of the coming hydrogen economy is becoming
less and less valid in the view of a lot of people because it requires
energy to separate the elements, to create the hydrogen. If we were
going to generate the energy of one gas well that takes up the dirt of
a nice sized garage, it would take an acre of windmills.
Talty: So we should go along
with the proposed energy policy of the president, drill in ANWAR?
Felton: I could propose legislation that would make the whole battle
for ANWAR immaterial. There is estimated to be five times the gas
reserves below 15,000 feet than above. How come less than 1 percent of
the wells drilled in energy rich Wyoming are below 15,000 feet? It's
too risky - the pressures and the temperatures at that level are so
extreme that the equipment literally melts. If you're looking at
policy, it would take public and private monies to develop the
technologies. The USGS says there are some basins that they suggest
would have decades of supply. When you look at the national context,
demand has grown 34 percent and supply has grown 17. If you look at how
we're going to met the demand, some of the new energy policies make
sense.
Talty: When we see a president
that turns back the standards on CO2, how can we trust that energy
development policies are being made that will protect the environment?
Felton: To often it's characterized as either or. When you take people
out on field trips and you literally see elk and deer scratching their
asses on the well, you're starting to say, we're doing okay here. The
benefit outweighs the cost. Who's not for taking care of the
environment in which we live?
--October 8, 2003 |
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