Energy boom coming to North Park, Colorado

[Oak]

Walden hears rumble of energy boom
North Park braces for clash over sage grouse, drilling territory

By Todd Hartman, Rocky Mountain News
Published November 8, 2008 at 12:05 a.m.


The bulky industry pickup trucks bounce across the sage-splashed surface like the local antelope - in quick bursts, a few at a time.

They're prowling the wide-open grounds surrounding the tiny north-central Colorado town of Walden, trying to firm up what a Houston-based energy company believes to be a major oil discovery here. It's one that could bring a wave of drilling to a region eager for an economic jump-start.

Many of the 1,500 locals are ecstatic. Walden's little hotels are filled with engineers and surveyors. The Moose Cafe is crammed at lunch hour. The Conoco store rings up fast food and fill-ups. Big rigs of all designs lurch down the streets toward the vast lands of North Park, spilling in all directions outside this isolated clump of human bustle.

"We're a resource-based community," said Mike Blanton, a Jackson County commissioner and convenience store owner, reflecting on the region's history of lumber mills and coal mines. "And this is getting us back to where we need to be."

But groups representing hunters and conservationists are more cautious. They cherish North Park - a million-acre expanse surrounded by spectacular mountains and wilderness - for its wildlife and scenery. They acknowledge the fruits, but warn of the fallout, of yet another pocket of Colorado facing the Rockies' ongoing energy boom.

One company in particular, EOG Resources, formerly known as Enron Oil & Gas, is exploring 100,000 acres of public and private land, hoping to develop what it believes is a find of 10 million to 80 million barrels of oil thousands of feet underground.

The U.S. produces 5 million barrels of oil per day, according to the U.S. Energy Information Administration, but in an era when every drop is precious and valuable, the possibilities of North Park are immense.

Just what impact that might have on North Park's game herds, as well as one of Colorado's largest populations of a threatened high prairie bird known as the sage grouse, isn't clear. Locals are downplaying any coming energy rush as minor compared to elsewhere on the Western Slope, such as the drilling explosion reshaping Garfield County to the south.

But conservationists aren't resting on that assumption. They're eager to engage with EOG, the federal Bureau of Land Management - which oversees federal lands in North Park - and the state Division of Wildlife, to ensure the treasured sporting grounds of the region aren't overrun by new roads, drill rigs, trucks, waste pits and pipelines.

A western coalition of hunters, anglers and some businesses called Sportsmen for Responsible Energy Development has made North Park a priority for protection. They see the region as an opportunity to conduct farsighted environmental planning to map out how drilling might best be done - before a tidal wave of development rolls through.

"The big thing is to get on top of it before it gets trashed, like Pinedale," said Bill Dvorak, of the National Wildlife Federation, during a recent tour of the region.

Pinedale, in southwest Wyoming, has become symbolic for environmental groups combating the torrid pace of natural gas drilling the Rockies. The once-placid town has become one of the heaviest development sites in the West, with more than 2,000 gas wells crowding nearby energy fields.

So dramatic has been development in Pinedale that some studies suggest it has reduced wildlife populations and changed migration patterns. The once-barren corner of Wyoming has even seen drilling-linked air pollution spikes that forced EPA warnings more common in big cities like Denver and Los Angeles.

So far, there's little sign North Park could ever see activity at that scale. And some locals are annoyed at the suggestion: "I think a lot of people are jumping to conclusions as to how much of an impact this is going to be," said Jackson County's administrator, Kent Crowder, clearly irritated with activists sounding alarms.

Back to the future

North Park is no stranger to fossil fuel extraction. The region was home to coal mines and has been drilled steadily for oil and carbon dioxide over the decades of the '50s, '60s and '70s. Even today, a handful of pump jacks extract oil from the McCallum Field, an area that first produced in the 1920s.

So far, any new boom is potential only, as companies do the up-front work to determine whether - and how much - to invest. Executives weigh commodity prices, geology, technological advances and regulatory restrictions in making decisions.

But early rumblings are there. Colorado oil and gas regulators have issued dozens of permits to drill in recent years in North Park. In 2008, the state has issued 23 drilling permits, with nine more pending. Of those, 13 involve EOG. The company was also granted two permits in late 2007.

The company keeps its findings close to the vest but did share some with the The Jackson County Star this spring. It has been acquiring energy leases for six years and continues so-called seismic testing to get a better handle on how much black gold hides below.

"EOG considers the North Park play . . . to be in the early stages of an exploratory project," said company spokeswoman Elizabeth Ivers, in an e-mail exchange with the Rocky Mountain News. "EOG cannot yet determine the success or potential development time frame for the area."

But in a letter to stockholders in February, company CEO Mark Papa called the North Park Basin "another promising . . . crude oil play."

EOG is not alone in its interest. Four other companies were awarded drilling permits this year, and another has permits pending with state regulators.

Even so, with so many variables, it's hard to predict the intensity of development. Oil fields are drilled and developed differently than natural gas fields. And improved technology would make for a lighter footprint, company officials and local leaders say.

"We're not looking at a Garfield County scenario," Blanton said of one of Colorado's fastest-growing regions for gas drilling and the source of numerous concerns from locals weary of truck traffic, pollution, housing shortages and transient workers. "It's a totally different scenario from my understanding."

Thom Kerr, a manager with the Colorado Oil and Gas Conservation Commission, cautioned that the fast-dropping price of oil - it has fallen about 50 percent since a summer peak - and the economic slump that's behind it could blunt any big plans in North Park.

Though the region has potential, he said, "I don't anticipate any great rush, especially in light of prices."

Human need vs. habitat

Hunters and other outdoor advocates aren't taking any chances. When $4 a gallon gasoline returns, and other options for drilling increasingly run dry, North Park won't be immune, they say.

Technology is a doubled-edged sword, too, they note. It was improvements in coaxing natural gas from tight-sand formations in northwest Colorado - and increasing demand for the fuel - that led the industry to pour into once-sleepy Garfield County and the Roan Plateau region around Rifle in the last several years.

"Industry's hungry right now," said Randy Hampton, a spokesman for the Colorado Division of Wildlife.

Perhaps of greatest concern in North Park is the fate of the sage grouse, a sagebrush-dependent bird that studies in Wyoming and Montana have shown can see population losses near drilling sites. In northwest Colorado, such studies aren't complete, but "we're starting to see stuff that raises a flag," Hampton said.

The birds, known for their elaborate mating dance, depend on mating sites called leks. Drilling too close to leks leads the birds to avoid the sites, researchers say.

With North Park home to 20 percent of Colorado's sage grouse population, conservationists are paying close attention to protecting the creature.

"For a species on the decline, this seems to be an important piece of habitat, really a stronghold," said Corey Fisher, a Montana-based activist with the sportsmen group Trout Unlimited.

The grouse's tenuous standing isn't lost on landowners, oil companies including EOG, and government agencies. All are under pressure to keep sage grouse numbers high enough to avoid federal Endangered Species Act protections now under consideration by the U.S. Fish & Wildlife Service. If those rules were to kick in, tougher limits on development in sage grouse habitat could take effect.

In North Park, state wildlife officials have already persuaded BLM to delay leasing key sage grouse habitat to drillers while research continues and regulators consider how best to protect the birds.

Some work also is on hold while BLM updates land management plans to consider new wildlife data.

EOG's Ivers said the company is engaged in aiding the grouse and plans to help pay for state-run study of sage grouse in North Park.

"It's on everyone's radar," said Joe Stout, a Kremmling-based BLM planner. "All the agencies involved are trying to get a handle on what's needed to protect the species."

Locals in Walden say they care just as much about wildlife as conservationists outside the area. They hunt and fish, and want protections, too. But, some say, they don't need outsiders getting in their way of energy drilling.

"You get the environmental groups that want to stick their noses into our business and make up scenarios," Blanton complained. "I own a business in town. You struggle to make it eight months out of the year, and hope you make it off the other four. This (energy development) is going to help business.

"I'm an outdoorsman, that's why I live here. The Front Range thinks we're their playground, but there are people who live here year-round, and they need to make a living, too."

About the town

The small town of Walden sits in the middle of Jackson County, one of Colorado's least-populated, with 1,476 people, according to mid-2007 figures from state demographers.

Once a hub of natural resource production, including timber and coal, Walden is sustained largely by hunting and outdoor recreation, with people attracted to the remote Mount Zirkel Wilderness and Routt National Forest. Some ranching also remains in the region.

It's well known as a place to spot otherwise elusive moose. The town sits amid North Park, a high glacial plain at the headwaters of the North Platte River in north-central Colorado. Historically a Ute hunting ground, the area is just 20 miles from the Wyoming border.