Northwestern New Mexico is prepping for a new oil and gas boom in a region that’s pumped out natural gas for decades and where those resources were once thought fully developed.
The boom could be similar to what’s happening in southeastern New Mexico’s Permian Basin, and the Bakken Shale in North Dakota and Montana, according to oil and gas experts.
Improved horizontal drilling technology and hydraulic fracturing provide drillers an economical way to reach oil and gas reserves in tight shale formations in the San Juan Basin, said Dave Evans, district manager of the Bureau of Land Management’s Farmington Field Office.
The office is preparing for the boom by analyzing potential drawbacks to air quality, water resources, riparian areas and wildlife habitat from potentially hundreds of new wells. The agency is asking for public comments about the concerns during a scoping period that ends April 28. The agency will use the comments to prepare an environmental impact statement, as required by federal law, and to amend the district’s 2002 resource management plan.
“The plan amendment will address increased exploration, mostly in the Mancos Shale/Gallup formation on BLM land in the Farmington Field Office and on split estate lands,” Evans said. “We also provide guidance to the Forest Service, Jicarilla Apache and Navajo tribe.”
The office oversees 1.3 million acres of minerals on BLM land and another 3.6 million acres of split estate, where the surface land is owned by another entity or private party. About 90 percent of the BLM land is already leased for mineral development.
An estimated 30 billion barrels of oil are in the shale, though not all of it will be recoverable, according to industry information published during a San Juan Basin energy conference last year.
Canada’s Encana Corp. and Tulsa, Okla.-based WPX Energy both are developing oil wells in the San Juan Basin and planning to invest millions to drill more this year. Encana has leased 160,000 acres of mineral rights in the San Juan Basin. WPX Energy announced plans to put $160 million in developing oil plays in 2014 on its 60,000 leased acres in the San Juan Basin.
Evans said new drilling could mean an extensive increase in roads and pipelines. The scoping period and follow-up public meetings give the public a chance to “see what this could look like and tell us about potential issues.”
The Mancos/Gallup shale formation starts at about 7,000 feet underground, Evans said. He said drinkable groundwater supplies end at about 2,500 feet below ground. “The shale formation is well below any usable waters,” he said.
But increased well drilling around the United States in the last five years has heightened public concerns over the impact on water, air and human health from fracking. Fracking, or hydraulic fracturing, is a technique in which water and other chemicals are forced through a well bore hole to open up rock and release the trapped hydrocarbons.
Evans said he is confident any new drilling won’t harm groundwater resources.
“We’ve been stimulating wells for more than 50 years in this area,” he said. “We have not had any groundwater contamination. We have a good history with this.”
The impact of potentially thousands of new wells on groundwater isn’t the only concern, according to Mike Eisenfeld, New Mexico energy coordinator for the nonprofit San Juan Citizens Alliance. Eisenfeld said in the new hunt for oil, some companies are flaring off the natural gas that first comes up the pipe. He said that hurts air quality and wastes a natural resource.
Eisenfeld said there’s also potential impact on cultural resources such as Chaco Canyon, which is in an area companies want to drill.
Eisenfeld said back in 2003, when the last resource management plan was finished, it didn’t take into account the shale oil because no one thought it could be tapped economically. But they’ve known for five years now that the new technology made the oil lucrative. He said the BLM should have started planning for the impacts sooner.
Eisenfeld said the group doesn’t oppose oil and gas drilling in the region, “But if they really want to partner with communities up here, they need to be smarter about how they plan for full field development.”
New oil shale drilling could restore the San Juan Basin’s fortunes. The region has seen a dramatic downturn in the last couple of years due to suppressed natural gas prices, Evans said.
One way to measure the downturn is in the number of drilling permits issued by the agency. At its peak, the agency was issuing 800 to 900 permits a year, Evans said. About 40 drilling rigs were running in the region.
Currently, only seven rigs are drilling, and last year the Farmington Field Office issued only 110 permits. “We plugged nearly four times the wells as were drilled,” Evans said.
He believes as coal-fired power plants switch to natural gas and an oversupply of the resource is used up, drilling will increase in the San Juan Basin.
Evans said the scoping meetings are the first in a long process, with a final decision on amending the resource management plan not expected until late 2016.
Contact Staci Matlock at 986-3055 or email@example.com. Follow her on Twitter @stacimatlock.