US wildlife service considers regulating oil, gas production on refuges like Aransas

Aug. 2, 2014 at 6:09 p.m.
Updated Aug. 2, 2014 at 11:12 p.m.

AUSTWELL - From late October to mid-April, a valued natural resource - the only wild flock of endangered whooping cranes - can be found wintering on the Blackjack Peninsula.

But under the surface of the peninsula is yet another valuable resource: a mixture of oil and gas.

The man who balances the natural resources on and under the Aransas National Wildlife Refuge is Felipe Prieto.

Prieto is a wildlife biologist with more than 20 years of work on the refuge. As the liaison between the refuge and oil and gas operators, he also has studied the energy industry.

"You have to know enough to know when they're feeding you bull," he said. "And at times, you have to convince them why a precaution is necessary. Sometimes, you're a biology 101 teacher."

About once a year, Prieto and oil and gas managers from across Texas get together to talk about new technologies in mineral production.

"You have to be open and accepting of all that is going on in the world today because conservation requires that. You don't exist in a little corner by yourself," Prieto said.

About half of the nation's 562 refuges have oil and gas development. As in the case of Aransas, the land for most refuges was purchased without the mineral rights, either because they were not for sale or prohibitively expensive.

Houston-based Hilcorp Energy Co., the sole owner of Aransas' lease, has a good track record with the refuge. But many refuges are not so lucky, said U.S. Fish and Wildlife Service Deputy Director Steve Guertin at a hearing this year on oil and gas.

At the Lower Rio Grande Valley National Wildlife Refuge, 20 miles north of McAllen, cleaning up abandoned well sites and removing oil and gas equipment cost taxpayers about $1.2 million, he said.

Currently, the U.S. Fish and Wildlife Service has the same rights as any other surface landowner, which have historically been at the mercy of the mineral rights owner.

On refuges, the noise, traffic, lights and possibility of pollution that accompany drilling operations are pitted against the goal of refuges - the conservation of wildlife and habitat.

Complicating the issue further is the fact that surface owner rights vary from state to state.

The wildlife service wants a predictable and consistent approach to regulating oil and gas development, Guertin said.

Productive relationship

The Aransas National Wildlife Refuge has seven active wells and more than 80 inactive wells, a reminder of the refuge's long history of oil and gas development.

Before the wildlife service purchased the coastal area stretching from Austwell to Rockport in 1937, Conoco Inc., then called Continental Oil Co., owned the mineral rights. The rights are now owned by Hilcorp Energy Co., which began drilling on the refuge in 2010.

Because Hilcorp owns the entire 47,163-acre St. Charles Ranch lease, the refuge has only one company to work with. Hilcorp is one of the largest privately held energy companies in the U.S., operating across the Gulf Coast and in Alaska's Cook Inlet on Kenai National Wildlife Refuge.

"Since we began our activities, we have coordinated in a positive and collaborative manner with the refuge's staff and greatly appreciate their willingness to work cooperatively with us on this endeavor. Hilcorp has extensive experience conducting operations in sensitive areas," Justin Furnace, corporate manager of Hilcorp external affairs, wrote in an email Thursday.

Having only one company to work with makes it easier for the refuge to keep tabs on drilling activity. Working with a bigger company with a namesake to look after is also beneficial. But perhaps the greatest advantage the refuge has is Prieto's watchful eye.

"I'm looking for the fact that they are complying with everything we discussed. I want to be assured of that. If I find something different, I ask about it," said Prieto, the oil and gas manager of Aransas National Wildlife Refuge and Matagorda Island.

Plans for each of the seven wells Hilcorp has drilled on the refuge are outlined in a special use permit. The permits dictate the pad size of the well site - no bigger than 320-by-320-feet - that no lights may be used at night on tank batteries or completed wells and that a large mat be placed under the actual rig to protect the surface from spills.

"We've made pages of conditions. One of the conditions is that they maintain the roads," Prieto said.

Drilling only occurs on the interior of the peninsula, away from the coast where the whooping cranes winter. The refuge also keeps oil and gas production off the 5,000 acres of public use area. And while whooping cranes are wintering in Aransas - from Oct. 15 through April 15 - no drilling is allowed.

"We continue to work closely with the refuge's staff to assure our activity is conducted in a minimally intrusive manner. In fact, our operations only take place six months out of the year," Furnace wrote.

Oil and gas industry traffic on the refuge does not use the same roads or entrance as the public. The only sign of oil and gas production visitors traveling the 16-mile tour loop see is a tank battery outside the entrance to the refuge, which handles production from San Antonio Bay.

Last year, a Hilcorp employee discovered an inactive well bubbling up fluid.

"We right away began discussions. And they right away began hauling off this waste and disposing of it properly. We now have monitoring wells in place and have sampled the soil," Prieto said.

How it can go wrong

While Louisiana is on the stronger end of pro-surface rights, Texas falls somewhere down the center.

"We're kind of in the middle leaning toward the side of less surface protection," said Bobby Maiden, an associate attorney with McKay and Coffey in Victoria.

In Texas, unless it stipulates otherwise in the lease, mineral owners have "reasonable use" of the land surface to get to their minerals.

"Because what's the point of owning mineral rights if you can't access them? So, that's why the law steps in and says you can use the surface to get to your minerals, but it has to be reasonable use," Maiden said. "But what is reasonable is kind of hard to say."

At the Lower Rio Grande Valley National Wildlife Refuge, three abandoned wells threatened contamination of East Lake, a roosting and nesting habitat for long-billed curlews, thousands of migrating geese, ducks and endangered piping plover.

The wells were drilled in 1948, but the operator could not be found in the early 1990s, according to a service case study. For 15 years, the refuge asked the state to plug the abandoned wells. The Texas State Railroad Commission completed the work in 2011, spending more than $1 million, a cost that was passed on to taxpayers, according to the case study.

"Do I think further regulation of oil and gas activities would benefit the refuge? Absolutely. Most of the regulations we have are basically very broad and don't cover the specifics of oil and gas standard procedures such as reserve pits, abandonment, removal, cleanup and restoration," said Romeo Garcia, the oil and gas specialist for the refuge.

Unlike other federal land management agencies, such as the U.S. National Park Service and the U.S. Forest Service, the Fish and Wildlife Service doesn't have basic rules to safeguard against drilling activities beyond the individual state requirements and lease terms.

The service wants to change this but hasn't proposed any specific approach for managing nonfederal oil and gas operations.

In February, the service issued an advance notice of proposed rule-making seeking public comment about regulatory options for management of nonfederal oil and gas production on refuges.

The agency received about 80,000 comments and is in the process of reviewing the comments before deciding how to continue, said Scott Covington, refuge energy program coordinator.

"We don't want to stop companies from accessing their minerals on our land. That has never been our goal," Garcia said. "We believe oil and gas activities should be closely regulated, and companies should be held accountable for anything compromising the integrity of the refuge."

What's to come

The public comment period closed in July, and no further steps are scheduled.

Public Employees for Environmental Responsibility, an environmental watchdog group, has called the state of service regulation "embryonic."

"At this rate, the (Barack) Obama presidential library will be built by the time these regulations are ready to be adopted," said Jeff Ruch, the executive director of Public Employees for Environmental Responsibility, in a statement. "With scores of refuges at risk, the Fish and Wildlife Service should not be slow-walking needed protections."

But oil and natural gas explorers and producers are calling the want for more regulations unjustified, unnecessary and beyond the reach of the service's legal authority.

While the Aransas refuge has a healthy relationship with operators now, Prieto said he worries about the day Hilcorp sells its mineral rights. The rights might be broken up into smaller pieces among mom-and-pop shops or subsidiary companies that can be closed if things go wrong.

"Let's say you own a small ranch, and you build a relationship with the oil company, and you get the proverbial letter in the mail that says, 'We are no longer going to develop this field; we have sold our assets to such and such.' Well, man, you have to start over with this company," Prieto said. "That's what it's like. It's the same for us. We have to start over. We have to make sure they understand our concerns, our needs - all of that."



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