We live in a country that is currently very heavily dependent on oil and gas. We heat our homes, cook our food, run our vehicles and power our economy with vast quantities of the stuff. But while we have the option of importing oil by the billions of barrels from elsewhere in the world, natural gas extraction impacts us much closer to home. As a volatile, gaseous compound, gas is inherently difficult to transport. Thus, the vast majority of natural gas is extracted from "fields" on our own continent, piped through and between Mexico, the United States and Canada.

The evidence now shows that supplies of natural gas mined in traditional fields has begun to decline. For that reason, a relatively newer source of gas has become of greater importance to the energy industry - gas extracted from in and around coal seams, on both public and private lands. This "coal bed methane" lies trapped by water, in the vicinity of the coal beds, sometimes quite near the surface. The technology for recovering the gas is relatively simple: pump out the water trapping the gas, pump out the gas. But the controversy surrounding this activity is anything but simple, involving tremendous disagreements over property rights, potential water and air pollution, and a number of socioeconomic concerns.

It is because of these disagreements that the Center convened the conference. As with other resource-based issues, there’s both an economic upside and an environmental downside. Both private and public lands are slated for development, with the sub-surface rights to minerals held in complicated ownership patterns. And in deciding what rights industry may or may not have, the jurisdictional power of local, state and federal governments is called into question.

We need reliable sources of energy. There are many - and the numbers are growing - who oppose energy development, particularly on public lands. By practicing good responsible stewardship, we can ensure that energy development is a temporary environmental impact on the lands. As coalbed methane development moves forward, we will continue meeting with industry, landowners and conservationists to discuss how we can work together to meet our stewardship responsibilities to develop the public lands in an environmentally sound manner.

If we are successful by working together, we will have the satisfaction of knowing we have made a real, lasting contribution to our Nation’s quality of life and energy resources.

U.S. gas production peaked in 1973, nearly 30 years ago. Louisiana, Texas, and the Gulf of Mexico have historically provided most of America's gas. These areas are now struggling to keep production from falling; Texas, for example has to complete 15 new wells each day to stay even. Half of America's gas is now coming from wells drilled in the last three years; if we stopped drilling for a year, experts believe US gas production would fall 30%. In short, drillers are on a "treadmill," the slope of which is increasing every year.

The only areas in the U.S. where gas production is increasing are the Rocky Mountains and the deep water Gulf of Mexico. In the last ten years, the U.S. has become the world's largest importer of gas, buying half of all the gas produced in Canada.

Per capita we are now consuming a dumpster's worth of gas each day. Indeed, 285 million Americans use more gas than 3 billion people in Europe and Asia. These fundamentals suggest that Montana's estimated 5 trillion cubic feet of coalbed methane reserves are only going to get more valuable. Given the limited amount of take away gas pipeline capacity (which has caused 40% of the wells in the Powder River Basin to be shut in), Montana can take the time to "do it right." States like Colorado and New Mexico that have seen rapid coalbed development have typically been behind the curve from the very beginning. Montana could be different, if the political will exists.

Today, Montana only produces .4% of U.S. gas. Even a tenfold increase would leave Montana a relatively small player in the nation's gas business. The Big Sky state shouldn't suffer delusions of grandeur. You can't save California, even if you wanted to. This argues again for taking the time to get the ground rules--particularly on water quality and surface impacts--right before proceeding. Looking ahead, gas prices may spike again this winter, and the nation's enormous gas "appetite" is bearing down on the Rockies.

With two-thirds of U.S. petroleum already consumed, and half the nation's gas gone, it makes sense for Montana to think long and hard about its energy future. You are self-sufficient in coal and could be self-sufficient in gas for many decades. What's the rush to ship it all to Minnesota? Prudent gas development could be a benefit to the state, but an industry this large and profitable needs appropriate regulation.

A typical coalbed well will yield $1 million in gross revenues, so there's enough money to protect the environment, farmers, ranchers, and water quality. As for the "split estate" problem...it is a legislative outrage and historical tragedy that can only be rectified by the generosity of oil and gas producers. Why should their stockholders be the only ones that benefit from gas development on private property? With $1 million in revenue per well, gas producers could should share some of it with the landowner. A few percentage points of gross revenue, similar to what wind farm developers pay, would make a huge difference in how coalbed methane is perceived.

Coalbed methane is a plentiful, clean burning natural resource and an important and valuable domestic resource in meeting the nations energy demand. CBM is a particularly valuable economic resource in the Western United States and is an important source of income and jobs to westerners and revenue to local, state, and national governments. A unique challenge posed by CBM development is the speed at which change is occurring. Parties are forced to deal with issues of produced water, conflicts between landowners and those who lease mineral rights, impacts of development on communities, demands for governmental and regulatory services, and other issues in a very compact time frame. Environmental impacts associated with CBM development include the construction of roads, drill pads, water disposal sites and related facilities; noise from pumps, compressors, and traffic that disturb residents and wildlife, air pollution; disruption of areas that were previously isolated from development or valued for undisturbed vistas and solitude; and impacts on water quality and supplies.

While there are many similarities in the challenges facing CBM development throughout the West, each basin is a unique mix of CBM resources, water quality and quantity, existing development, competing land uses and designations, government requirements, and other factors. Advocates of collaborative decision making, sustainable communities, increased communication and consultation, cooperation among different levels of government, and balanced decision making suggest that parties come together in each basin to identify problems, develop innovative alternatives for solving problems, and build support for implementing solutions. Coalbed methane production may only occur for 10-20 years in a community, but the consequences of the way in which development occurs will likely last much longer. CBM development poses serious risks to communities, including possible long-term damage to water supplies, wildlife, solitude and scenery, property values, and lifestyle. A commitment to sustainability suggests a careful examination of the long term consequences of resource development, including a comparison of the costs and benefits of CBM development with other energy resources, such as renewable resources, to examine what kinds of resource development would be in the best long-term interest of Western communities.

The Natural Resources Law Center has prepared a CD rom of reports on coalbed methane, including a CBM primer, case studies of the San Juan and Powder River Basins, and presentations from its April 2002 conference. For a free copy of the CD please contact the Center at NRLC@spot.colorado.edu or call 303 492 1286 or write NRLC, University of Colorado School of Law, Boulder CO 80309 0401.

As ranchers in Wyoming’s Powder River Basin, we have experienced extensive development on and around our home for the last several years. Since we do not own all the minerals under our surface we have what is called a split estate, where the mineral estate is severed from the surface estate. Under these conditions, our ability to control what takes place on our surface by the operator who wants to drill for his gas is severely curtailed.

Conflicts between mineral companies and landowners and other concerned citizens has been costly to industry because it slows the permitting process, and involves the companies in lawsuits that would not be necessary if they were required to operate in a more sensitive manner.

While we are not opposed to this development we feel that a certain amount of regulation by the state of Wyoming and a mandatory surface use agreement for land owners would be appropriate.

There is a tremendous opportunity for Montana to realize economic growth in an environmentally sensitive manner - coalbed natural gas development. In the Powder River Basin in the southeast portion of the state, the potential revenues to the state exceed 4 billion dollars over the next 20 years.

The coalbed natural gas development industry is very conscious of its role and responsibilities to protect the environment and all of the parties who beneficially use the resources within the development area. Not only is industry concerned with development but the State, through its Departments of Environmental Quality, Oil and Gas Conservation and Natural Resources and the federal government through the BLM, Forest Service and the EPA are concerned and are mandated to protect the beneficial users within the development area. There are regulations in place that prohibit any degradation to the environment, specifically water and air quality. These regulations determine how the permits to develop coalbed natural gas are issued, how the industry is monitored and what mitigations are necessary to correct aspects of the development that may have any potential to affect the existing quality of life.

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