NY TIMES 3/15/13 - On Western Lands a Free-Market Path

Mar 15, 2013
EcoFlight provided the aerial perspective for this article for the NY Times:
The New York Times

March 15, 2013

On Western Lands, a Free-Market Path

REDSTONE, Colo. — Deep in the jagged heart of central Colorado lies one of the world’s most beautiful backyards: a rugged and wild quilt of national forest where elk roam and bobcats hunt. It is public land, and as the song says, made for you and me. But the rights to drill it for oil and gas belong to private companies.

Stories of fiercely loved lands like this one often chart a predictable path. Residents opposed to drilling lodge protests with the government, and when that fails, they head to court. But recently, environmental advocates have begun banding together with ranchers, hunters and rich landowners with a novel tactic to preserve the landscapes of the West: they buy out their opponents.

For years, conservation groups across the country have hammered out deals to preserve private ranches and old homesteads as parks and open space, rather than see them sold off to become mini-malls or subdivisions. But the federal government is the biggest landlord in the West, and one cannot simply buy a forest or mountain to keep it from being drilled.

Instead, conservation groups are trying to buy the mineral leases that oil and gas companies purchase from the federal government at regular energy auctions, sometimes for as little as $2 an acre. Conservation groups pay the companies a premium to buy up the leases. Then elected officials draw up laws to ensure that nobody else will be able to drill there in the future. And the land is forever enshrined as open country, locking away whatever resources may lie beneath.

The groups have had some early successes. Along the Montana-Canada border, conservationists raised $10 million in a deal with Canadian officials to persuade companies to abandon their rights to mine for coal and gold along the North Fork of the Flathead River, which flows to Glacier National Park. Oil companies on the American side of the border also gave up additional drilling claims.

In Wyoming, the Trust for Public Land and groups of fishermen, steelworkers and others raised $8.75 million to buy out the oil and gas leases on 58,000 acres of forests and mountains. They held benefit concerts, auctioned a guitar signed by Johnny Depp and brought in $100 donations from people across Wyoming and the country. Mostly, their effort leaned on the largess of benefactors like Hansjörg Wyss, a Swiss billionaire who gave $4.25 million.

“It is a template of how to do this,” said Chris Deming, who managed the buyouts for the Trust for Public Land. “We were able to take a very businesslike approach. That’s key.”

But here in the Elk Mountains of Colorado, the free-market path has been as twisting and as unpredictable as a hike into the harshest wilderness.

For five years, few people, if any, who hiked and hunted and fished and cycled around the 220,000 acres of rumpled national forest known as the Thompson Divide knew it had been auctioned off for energy development. After 61 leases were auctioned in 2003, nothing really happened. Ranchers led their cows to summer pastures on the land. Guides led hunters into the mountains, toward herds of migrating elk and deer. The companies did not survey the land, build roads, file for drilling permits or take any other steps that usually draw a region’s attention.

Around 2008, environmental lawyers and activists discovered the land had been opened to energy development. Residents quickly knitted together a coalition of liberal and conservative local governments, ranchers, hunters, anglers and environmentalists to devise a way to prevent the drilling.

“It would absolutely devastate us,” said Bill Fales, a rancher whose 200 head of cattle spend their summers munching grass on the forest lands that are now open for drilling.

So the residents cobbled together promises of money from local landowners, the cattle association and others, and they made their offer to the oil and gas companies. They would pay $2.5 million to buy the leases, the same per-acre price that the energy producers paid at auction.

“We want to reimburse industry. We want to make them whole,” said Zane Kessler, the executive director of the Thompson Divide Coalition, which is leading the efforts.

Of the eight companies with major stakes in the land, only three responded, and they said no, Mr. Kessler said. SG Interests, a company based in Houston, has filed six drilling permits on the land, and said that the $2.5 million offer did not represent the true value of the gas locked in the layers of shale beneath the ground.

“This is a business for us,” Eric Sanford, the company’s Colorado operations and land manager, told a meeting of community members recently. “We plan on doing it productively and economically.”

The companies have not made formal counteroffers, Mr. Kessler said, but some have suggested that the gas underneath the land could be worth $1 billion. Now, even as the companies make preparations to drill, they have said they are still willing to negotiate.

Like the conservation efforts in Wyoming, reaching a deal would require additional help from Washington. Because federal land can be auctioned off again if an energy lease expires, advocates need legislation to permanently protect the land from future drilling, and to ensure that the rights they hope to buy would forever stay in their hands. Senator Michael Bennet, Democrat of Colorado, has drafted such a law, but has not yet introduced it.

As both sides skirmish, the 10-year life span of many of the gas leases is nearing an end.

Nineteen of the leases are set to expire on May 31, with others running out in July and August. The companies holding the leases have asked the government for more time, but after nearly a decade, some residents hope that the federal Bureau of Land Management will simply let them lapse. At the second presidential debate, President Obama said that energy companies hoping to drill on public lands had to “use it or lose it,” and residents have said it is time to turn the land back over to the public.

Mr. Kessler is still holding out hope for a permanent deal.

“The coalition is willing to raise whatever is necessary is possible to buy these leases out,” he said. “We’re in the 11th hour. These leases expire in two or three months. Our offer is still on the table.”

Matthew Staver for The New York Times

Randy Melton led a group to work with the horses on his ranch in Redstone, Colo.