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The Bureau of Land Management has officially reversed approval of the proposed 5,750-well expansion to the Uinta Basin’s Monument Butte oil and gas field, putting the project’s future into further doubt after Utah state director Greg Sheehan ordered a more thorough environmental review.
The Monument Butte expansion had already been stalled for years thanks to relentless challenges filed by WildEarth Guardians, and the field’s principal developer Ovintiv USA recently announced it was selling an 85,000-acre stake in the field where it has idled at least 200 wells.
This week, the BLM’s Utah state office released its latest decision, this time to conduct additional environmental analysis, examining greenhouse gas emissions associated with the energy the project would produce.
“This is a major victory for public lands and our climate,” said Jeremy Nichols, WildEarth’s climate and energy program director. “This proposal opened the door for a costly increase in drilling and fracking at a time when we need to be keeping oil and gas in the ground. We’re pleased the Biden administration has agreed to reconsider this decision.”
The group contends full-field development on the 120,000-acre field could unleash up to 60 million metric tons of carbon dioxide and other greenhouse gasses a year, resulting in a climate impact equivalent to that of 17 coal-fired power plants.
Even without the Monument Butte expansion, oil production in the Uinta Basin has hit record levels, driven by resurgent energy prices and a new rail connection to Gulf Coast refineries, according to the Division of Oil, Gas and Mining. This summer, 12 drill rigs were operating in the basin — up from zero during the pandemic — boring new wells that promise to boost production even more.
And if Utah’s proposed Uinta Basin Railway gets built, production could increase threefold. In this light, the rescission of the Monument Butte project’s approval is hardly a speed bump in the basin’s output of hydrocarbons.
The Utah governor’s Office of Energy Development, now led by Duchesne County Commissioner Gregory Todd, said it did not know enough about the recent decision to comment Tuesday.
The company formerly known as Newfield Exploration drilled much of this field south of Myton, straddling the Duchesne-Uintah county line, in the 2000s. But today many of the wells sit idle, although 1,000 remain in production, according to Matt Kovich, the Uinta Basin production manager for Ovintiv, Newfield’s successor.
At a July gathering of industry leaders in Duchesne, he said Ovintiv was the Greater Monument Butte to an unnamed “capable buyer with a laser focus to develop that unit,” while homing its attention on Ovintiv’s remaining 130,000 acres of leases elsewhere in the basin.
With headquarters in Denver and Woodland, Texas, Ovintiv is the company created by Newfield’s 2018 merger with Encana. It has been a top oil and gas producer in the Uinta Basin, with major operations in North Dakota, Texas, Oklahoma and Canada, where it has specialized in horizontal drilling.
“For us it was a focus on our core competencies,” Kovich said of the sale. “We are a multi-basin, horizontal drilling company. We’ve learned a ton in [Texas’s] Permian Basin. Now the focus is taking all that institutional knowledge and learning about multiple-stack development and putting it to work here in the Uinta Basin.”
The 120,000-acre Monument Butte project area is largely controlled by the BLM, while 11% is on state trust land sections scattered around the field. By 2009 Monument Butte had been fully developed as an oil field, prompting Newfield to seek authorization to increase well densities beyond the customary 40-acre spacing.
The Obama administration reviewed the proposal and in 2016 decided to allow for 5,750 new wells to be drilled over a 16-year period. Also approved were 226 miles of new roads and pipelines, along with upgrades to 318 miles of existing roads, 20 compressor stations, a gas processing plant, 13 facilities for managing hydrocarbon-tainted production water and 13 gas-oil separation plants.
That decision was “programmatic,” meaning it did not authorize any ground-disturbing activities, the BLM claimed. Actual construction would have to be approved through site-specific permitting down the road.
This was the BLM’s reason cited in 2017 for rejecting WildEarth Guardian’s initial request for reconsideration. Without any actual work on the ground being authorized, the environmental group lacked “standing” to challenge the decision, the agency ruled.
Siding with WildEarth, the Interior Board of Land Appeals, or IBLA, rejected that determination.
“That reasoning does not apply to the Project ROD [record of decision], which is a decision advancing the development rights of third parties and restricting BLM’s discretion to deny applications for permits to drills or rights of way filed in compliance with the approved project,” wrote in Administrative Judge K. Jack Haugrud in a January 2022 ruling.
That ruling threw the matter back to the BLM for more study — 13 years after the project was first proposed. But the original proponent has moved on and it’s not clear if Monument Butte’s incoming operator is even interested in drilling.
If oil and gas prices stay high, the answer will likely be yes.