Idaho gives Texas company second shot to exclude federal lands from natural gas field

IndustriesAssociated Press

A Texas company is getting another chance to persuade Idaho officials to exclude federal lands and potential royalties from what is believed to be a profitable natural gas field in the southwest part of the state.

The five-member Idaho Oil and Gas Conservation Commission voted 4-1 Friday to hold another hearing to gather additional evidence from Alta Mesa. The date of that hearing hasn't been set.

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The company wants to omit 187 acres of U.S. Bureau of Land Management land from a 615-acre drilling unit. The commissioners in September rejected Alta Mesa's request on a 3-2 vote but the company appealed, and commissioners opted to change course.

"I think we're making progress," said Alta Mesa representative Mike Christian after Friday's meeting. "This is a new issue to the state of Idaho."

Christian said the company is working on wells and infrastructure on other drilling units that don't contain public land. But the company is fighting hard on this drilling unit because of its precedent-setting possibilities combined with there being a lot of BLM-administered land in the area where Alta Mesa appears to believe natural gas is found.

"What this is about is should the BLM have veto power over private citizens?" Christian said.

Bureau of Land Management attorney John Hockberger told the commission that the agency would also like to have natural gas production start because it brings in money for the federal government, half of that going to Idaho. But he said federal laws require environmental analysis, and that takes time. The agency has said its schedule is for it to start offering leases by March, a date Alta Mesa argued was unrealistic.

"We're disappointed," said Dave Murphy, the BLM's Idaho chief of lands, minerals and water rights, following the decision.

In Idaho, landowners are due a percentage of royalties from natural gas found within sections that are usually 640 acres, but can vary, and is based on the percentage of the 640 acres they own.

One of the big unknowns in the drilling unit being contested is the extent and location of recoverable natural gas in the 615 acres. Commissioner Jim Classen said another hearing could help answer that question, possibly eliminating the BLM if the natural gas field didn't extend to under BLM land.

The lone no vote on Friday came from Vice Chairman Margaret Chipman, who has said the state getting half of BLM's royalties is a factor for her.

"Now the whole thing starts over so we'll see what happens," she said.

Chairman Chris Beck and commissioners Sid Cellan, Jim Classen and Ken Smith all voted to hold another hearing. Cellan and Smith previously voted to reject Alta Mesa's request to exclude the BLM.