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Feds OK Major Gas Project for Utah's Uintah Basin

Natural gas wells on Utah's federal lands could nearly double under a major new development plan created with the cooperation of the Environmental Protection Agency (EPA) and Kerr-McGee and including best practices to reduce air pollution.

"We have to find sensible ways of allowing natural gas development to move forward at the same time protecting air quality," Interior Secretary Ken Salazar said in announcing the plan Thursday.

Under the plan, 3,675 new gas wells would be permitted on Bureau of Land Management (BLM) and Forest Service lands leased by Anadarko Petroleum Corp. subsidiary Kerr-McGee Oil & Gas Onshore. Utah now has 4,005 gas wells in operation on federal lands.

Up to 6 Tcf of gas could be produced from the project over 10 years, Salazar said.

"This project has the potential to create hundreds of jobs for Utah, infuse millions of dollars into local communities and help power our economy with natural gas as part of our nation's comprehensive energy portfolio," Salazar told reporters during a teleconference.

The new drilling undertaken by Kerr-McGee would mostly be in-fill development in Uintah County's Greater Natural Buttes area south of Vernal, UT. New gas wells would be drilled among about 1,000 already in operation in the Natural Buttes area. Of the 163,000 estimated acres included in the drilling plan, about 8,000 are previously undisturbed, according to the Interior Department.

Gas development in the Uintah Basin has created pollution that at times is the worst in the country, Salazar said. The project had been delayed in part because of air quality concerns in the Vernal area. In the first two months of this year the Uintah Basin had 23 days where ozone levels exceeded the acceptable levels of pollution. Five of the days were considered "very unhealthy" for people, he told reporters.

However, Kerr-McGee's mitigation plan includes several unique pollution controls that it plans to implement. Among other things the producer agreed to use natural gas instead of diesel on its drilling rigs. Additional controls would be retrofitted to existing wells and installed on new wells, a move that usually is not required in BLM-regulated gas fields, Salazar noted.

The Environmental Protection Agency (EPA) worked with Interior and the BLM to move the project to approval. Salazar admitted that BLM and EPA officials had at times pulled in different directions. However, working with Kerr-McGee, they found a "collaborative path" to resolve the issues.

Kerr-McGee agreed to a continuous monitoring and maintenance program, which may be adapted if the expected pollution limits aren't achieved, said BLM Director Bob Abbey. The Anadarko subsidiary's willingness to retrofit existing gas wells and compressors to new pollution standards was considered a key to achieving the agreement, he added.

The gas drilling plan's framework could become the "norm" for drilling on federal land, which likely would more rapidly permit wells using best practices to reduce air pollution, said Salazar. "We are going to work to institutionalize this type of collaboration between the BLM and EPA to ensure that future proposals receive prompt and thorough reviews and are not delayed by unnecessary bureaucracy," said the Interior chief.

Republican Sen. Orrin Hatch of Utah said the project could generate 2,500 jobs during peak construction and help to reduce reliance on foreign fuel. "With gasoline now reaching $4 a gallon, it is critical to develop cheaper alternatives, such as natural gas, that burn cleaner, lead to more jobs, strengthen our economy and ease the pain at the pumps for Utahns," said Hatch.

Within the next few days BLM plans to publish an air quality supplement to the Draft Environmental Impact Statement (EIS) for the Greater Natural Buttes Gas Project. The BLM's Draft Vernal Resource Management Plan/EIS for the region was issued in 2007 (see Daily GPI, Oct. 16, 2007).

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