Regulatory Burdens and Limits on Natural Gas

With the nation mired in a natural gas crisis, it’s instructive to recount the story of the Orogrande Basin, situated just north of the Texas-New Mexico border, which holds, according to experts, over a trillion cubic feet of natural gas.

The Harvey E. Yates Company (HEYCO), based in Roswell, New Mexico, was one of several independent companies exploring the basin in the late 90s. After years of study and persistence, HEYCO found gas in a section called the Bennett Ranch Unit. Based on extrapolations from existing wells, company president and CEO George Yates said HEYCO’s discovery could hold about 70 billion cubic feet of natural gas, no doubt a significant find. HEYCO was awarded a permit to drill–the gas lay underneath federal land–and expected to begin production.

Everything seemed on course, until HEYCO confronted a serious problem.

FACT: That problem was a maze of bureaucratic restrictions, enforced with help from environmental extremists, which blocked HEYCO, and many companies like it, from producing much-needed natural gas.

The New Mexico-based environmental extremist group Chihuahuan Desert Conservation Alliance (CDCA) said that, “oil and gas development just does not belong” on federal land. The list of CDCA-supported requirements and obstructions is endless, but here are a few gems: In 1998 the Bureau of Land Management proposed a prohibition on HEYCO’s drilling activities from January to July. The reason? Raptor breeding season. In addition, the Fish and Wildlife Service demanded HEYCO adopt a routine policy of surveying for any migratory bird nests every year from March through August. Upon discovery of a nest, HEYCO was required to remove any equipment within a quarter-mile. HEYCO was then required to give the agency three weeks’ notice before moving any dirt near its work sites. To make matters worse, the BLM complained that HEYCO’s proposed natural gas pipeline would trample yucca (a type of grass), contributing to “grassland habitat fragmentation.”

Said company representative Steve Yates: “It becomes so difficult to comply with [the restrictions] that it’s just not worth drilling anymore.”