BLM plan allows for 4,250 wells on oil and gas project

CASPER — The Bureau of Land Management released a final environmental review Friday of a closely-watched oil and gas project proposed for the heart of Wyoming. 

The BLM’s preferred plan would allow the company to drill 4,250 additional wells, but it would require Aethon Energy Management and Burlington Resources Oil and Gas Company to undertake water management tests, decrease disturbance of critical sage grouse habitat and increase the use of directional drilling wells on multi-use well pads, according to the final environmental statement. The agency will not render a final decision on the project until after receiving comments from the public and the governor. 

The federal environmental review comes on the heels of state regulators’ decision to deny the company’s request to release higher volumes of discharged water as part of the proposed expansion. A recent letter, obtained by conservation groups through a public records request, also revealed the company violated its existing permit by contaminating the nearby Alkali and Badwater creeks. 

Aethon Energy applied to install 4,250 new wells on about 327,000 acres of land — the majority of which are public — about 40 miles east of Riverton. The company aims to produce 254 million barrels of oil and 18.16 trillion cubic feet of natural gas over the project’s estimated 65-year lifespan, according to the BLM. 

Under the federal National Environmental Policy Act, the bureau is required to consider how development on public land could impact the environment. In its final environmental impact statement released Friday, federal regulators weighed multiple “alternatives” for the project, ranging from approving, rejecting or amending the proposed project to ensure the activity would not compromise water and wildlife. 

The BLM will accept public comment on the environmental impact statement for 30 days. The governor will also have 60 days to conduct a consistency review. After receiving feedback, the bureau plans to offer a final decision on the project. 

“Aethon is pleased to see that progress is being made towards finalizing the Moneta Divide (Environmental Impact Statement),” a spokeswoman for the company said in a statement to the Star-Tribune. “Aethon is in the process of reviewing the newly released document and awaits the May 2020 Record of Decision as communicated by the BLM.” 

The release comes one month after Wyoming Department of Environmental Quality state regulators revised a draft permit, maintaining existing limits on discharged water at the facility and imposing routine water sampling requirements to prevent pollutants from flowing into the nearby Boysen Reservoir Basin.

As part of its effort to expand oil and gas operations in Natrona and Fremont counties, Aethon Energy also requested approval from the state to discharge upward of 8 million gallons of water per day, a 400% increase from the current limit. 

The company’s request to expand the discharge facility was met with widespread protest from conservationists and nearby landowners. Many feared the contaminants in the briny water would pollute Alkali and Badwater creeks or eventually flow into the Boysen Reservoir Basin. 

Following months of public outcry, state regulators elected to retain the previous limits in its draft permit due to the lack of a functioning water treatment unit at the facility. 

But several conservation groups are still not satisfied. In a 24-page addressed to Wyoming Department of Environmental Quality on Tuesday, the groups outlined enduring concerns over Aethon’s failure to comply with its existing permit. 

“Although substantially improved over the earlier version, the revised draft permit still allows unlawful, unacceptable and environmentally damaging amounts of salts and other pollutants to enter Boysen Reservoir and its tributaries,” according to the letter submitted by Wyoming Outdoor Council, Powder River Basin Resource Council, Natural Resources Defense Council and National Audubon Society. “The existing discharge of wastewater from the Moneta Divide oil and gas field has violated state water quality standards, causing significant damage to Alkali and Badwater creeks.” 

Wyoming Department of Environmental Quality found black sediment deposits, foam and oil accumulation in the nearby Alkali and Badwater creeks in violation of Aethon Energy’s existing state permit, according to a Dec. 17 letter. 

“Aethon is addressing the matter with the (Wyoming Department of Environmental Quality) and will continue to operate in compliance with the existing and future WDEQ permits for Moneta Divide,” a spokeswoman for Aethon Energy said in a statement.

As for the BLM’s final environmental impact statement, Wyoming Outdoor Council Communications Director Alan Rogers said the group still has concerns with the potential threats the project poses to the water, but also sage grouse. 

“We will be reviewing the BLM’s environmental impact statement more thoroughly, but there are initial concerns related to the impact on sage grouse,” Rogers said in a statement. “The BLM’s recommended plan would disturb more than 550 acres of important sage grouse nesting area, and allow disposal wells and related infrastructure within priority habitat.” 

Meanwhile, some public officials in Fremont and Natrona counties have said the state’s decision to tighten the allowable discharged water volumes for the company hurts county governments reliant on oil and gas revenue. Aethon Energy estimates its proposed expansion could generate up to $375 million in federal, state and county mineral taxes. 

Oil and gas companies have long been embattled in permitting wars with regulators and the public due to disagreements over discharged water. The Moneta Divide project stretches back to 2012 when it was initially proposed by Encana Oil and Gas and Burlington Resources.