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Salazar Calls Anadarko Utah Project 'Template' for Industry

Interior Secretary Ken Salazar last Tuesday signed a record of decision (ROD) giving Anadarko Petroleum Corp. the green light to proceed with a major natural gas development project in eastern Utah.

The ROD, which Salazar signed at a Kern River Gas Transmission facility in Salt Lake City, UT, approves The Woodlands, TX-based producer's plan to drill nearly 3,700 new wells in the Greater Natural Buttes area of Utah's Uinta Basin over a 10-year period. Anadarko currently has 2,200 wells in the region, producing 500 MMcf/d. It projects that gas production will increase to a total of 1 Bcf/d with the new wells.

In April Interior's Bureau of Land Management (BLM) issued Anadarko a favorable final environmental impact statement for its long-pending plan to develop gas in the Uintah Basin (see NGI, April 16). The final EIS resulted from an agreement among Anadarko, BLM, the Environmental Protection Agency, environmental groups and Native American tribes.

At the signing event Salazar said oil and gas companies and environmentalists should view the Anadarko project as a "template" for resolving project differences. Perhaps the most "impressive" aspect of this project "is the collaboration among the federal agencies, industry, the conservation community and our state, local [and] tribal partners to bring an environmentally responsible approach to these energy initiatives.

"The world today should step back and just simply say, 'Wow. How did they do this? How did the oil and gas community, led by Anadarko and the county commissioners and the tribes, come together with the environmental community to allow this project to go forward in a way that has the kind of support that you see here today,?'" Salazar said.

Both Salazar and BLM Director Bob Abbey applauded Anadarko's efforts. "Anadarko is one of those companies that get it. Their personnel understand it's not always about the bottom line, that by reaching out to affected interests, they can move forward with much-needed projects," Abbey said.

Brad Holly, Anadarko general manager, agreed that the approval was a "shining example of what we can achieve if we all work together constructively." This is a "big event for Utah and for our company," Anadarko spokesman John Christiansen told NGI. The project will create more than 2,900 jobs at peak construction, involve more than a $10 billion investment over the next decade, and generate nearly $5 billion in state, federal, local and tribal royalties, according to the producer.

Even though gas prices are at rock bottom, Holly said Anadarko has a plan to make its project economic. "We have a cryogenic facility [in the Greater Natural Buttes area], and we have another train coming on in the third quarter of this year, so we'll be able to cryogenically process the gas up to 550 MMcf/d" and sell it as liquids, "which greatly enhances our economics," he said.

Sen. Orrin Hatch (R-UT) called the ROD a "step in the right direction." However, he added, "we've still got a long way to go; the fact is that much more has to be done to open up more of our state's land to development."

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