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Groups Appeal BLM Decision on Mancos Drilling

Two environmental groups are asking the Interior Department's Bureau of Land Management (BLM) to reconsider its decision to allow WPX Energy Inc. to drill unconventional natural gas wells into the Mancos Shale play in northwest New Mexico's San Juan Basin.

In a 23-page statement to Interior's Board of Land Appeals (IBLA), WildEarth Guardians and the San Juan Citizens Alliance assert that the BLM's district office in Farmington, NM, failed to consider the air quality impacts from -- or a "no action" alternative to -- WPX's Middle Mesa project.

"Drilling for oil and gas has already taken a tremendous toll on the air we breathe, the water we drink and the outdoors that we depend on," WildEarth spokesman Jeremy Nichols said. "This latest proposal threatens to push us over the brink, giving industry unfettered permission to undertake massive fracking at the expense of our environment."

According to the groups' statement, WPX -- which was spun off from Williams at the end of 2011 as an independent explorer -- plans to drill year-round for five years, performing hydraulic fracturing (fracking) at 53 well sites near the Navajo Reservoir on the San Juan River.

David Evans, district manager for the BLM's office in Farmington, told NGI's Shale Daily that he signed a finding of no significant impact (FONSI) statement for the Middle Mesa project on Dec. 1, 2011. He added that the decision was in full force and effect.

"Should we decide to allow year-round drilling, we can go forward with that," Evans said Wednesday. "There's no stay against the decision."

On Feb. 6, WPX said it was cutting its capital expenditure program for 2012 because of persistently low natural gas prices (see Shale Daily, Feb. 8). The company also said it would cut up to three drilling rigs as it trains its focus on the production of oil in the Bakken Shale and natural gas liquids (NGL) in the Piceance Basin.

Despite those moves, Evans said WPX was moving forward with its Middle Mesa project. "We are working with them on the next stage of environmental assessments for the APDs [application for permit to drill] specific to different locations there," Evans said. "It will really be a site-specific analysis of the impacts."

Evans added that although the San Juan Basin is the second-largest natural gas basin in the United States with 24,000 wells, drilling in the Mancos Shale has yet to pick up steam.

"Although [the Mancos] is clearly identified in our reasonable foreseeable development scenario, we haven't had the activity that we had projected," Evans said. "We had projected about 4,000 wells drilled in that formation. [The oil and gas companies] are just now starting to get the information associated with [the play]."

WPX spokesman Kelly Swan could not be reached for comment Wednesday. A decision from the IBLA is not expected until the end of the year.

Northwest New Mexico's annual production has declined in each of the last five years, falling from 1.07 Tcf in 2006 to 814.54 Bcf last year, according to New Mexico Energy, Minerals & Natural Resources Department data. Production peaked at 1.12 Tcf in 1999.

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