One oil well drilled in Grand County in 2012 surprised Fidelity Exploration and Production.
“After first year’s production, no other well onshore in the lower 48 states produced as much as that one well,” said Jayne Gates, Fidelity Exploration and Production’s asset team manager for the Paradox Basin.
Oil well Cane Creek 12-1 produced between 600,000 and 700,000 barrels of oil in the first year of operation. Today, it still requires no pumping unit due to the oil continuing to free-flow to the surface.
Fidelity’s Big Flat Area 9-Well Oil and Gas Exploration Project involves nine oil and gas wells on 94.8 acres of public land managed by the Bureau of Land Management, not far from Dead Horse Point State Park and the Island in the Sky District of Canyonlands.
Gates said that oil and gas exploration has been going on for well over 50 years in the area 12 to 18 miles west of Moab.
“One of the wells we produce today was drilled in 1962 by another company,” Gates said.
However, due to the complex geology in the area, it wasn’t commercially viable to drill for oil until about two or three years ago, Gates said.
“Fidelity took a different approach in how we were drilling and completing wells,” Gates said. “We then had higher production rates and reserves from each well. We’re drilling horizontal wells, which allows us to access more reserves.”
Jody Robbins, who leads the drilling and completions team for Fidelity in the Paradox Basin, emphasized that they aren’t “fracking.”
“That’s an important distinction,” he said.
That means Fidelity is using less water than other conventional ways to drill for oil, Gates said.
“The total water we use per well is less than one-acre foot per month of water,” she said. “That’s about what a family of four uses in about a year.”
The water they use is to clean the wells and surface facilities.
Fidelity’s water source is from the City of Moab and the Grand Water and Sewer Service Agency.
Moab resident Bill Love is concerned about using culinary water for the oil industry.
“The Glen Canyon Aquifer cannot continue to support the mining, and oil and gas industry in Grand County,” Love said. “The extraction industry will need even greater quantities in the future. Fidelity expects to drill an additional 20 to 40 wells in the same area over 15 years. The water needs to be reserved for the culinary use of Moab residents and not used to benefit out of state companies or foreign owned companies.”
The BLM is now preparing a Mineral Leasing Plan (MLP) in the same area that Fidelity Exploration and Production has their producing wells.
The Canyon Country BLM District has been working on the 946,469-acre MLP since 2012. The parcels now being studied and considered surround Arches and Canyonlands National Parks.
The MLP is a result from the 2008 oil and gas lease sale, when climate activist Tim DeChristopher bid $1.8 million for 14 parcels of land north of Canyonlands National Park.
DeChristopher was removed from the auction by federal agents, taken into custody and served 21 months in prison. The U.S. Department of Interior canceled many of the leases, stating that parcels had been rushed into auction. The Obama Administration, under the 2010 Oil and Gas Leasing Reform, requested that the BLM Canyon Country District complete an MLP.
The Moab MLP will include an Environmental Impact Statement (EIS) and possible amendments to the 2008 Moab and Monticello Resource Management Plans (RMPs). The BLM-Utah office anticipates releasing a draft EIS for public review and comment in late 2014.
No new mineral leases will be allowed in the areas that are now under review until the MLP process is completed.
“Any existing leases, we’re still leasing,” said Rock Smith of the Moab BLM Office in an earlier interview. “There is as much activity as there ever has been. Oil and gas development is still occurring at historic rates.”
Fidelity Exploration and Production had valid existing leases prior to 2008 RMP and the work on the Mineral Leasing Plan.
“Therefore, these leases will continue to be managed under stipulations in effect when the leases were issued,” stated the BLM’s 2011 report, which stated no finding of significant impact from Fidelity’s project. “However, permits and authorizations issued on the leases will include mitigation measures to minimize resource impacts and conflicts with other uses based on consideration of the lease stipulations in the Resource Management Plan where appropriate.”
Liz Thomas, a field attorney with the Southern Utah Wilderness Alliance (SUWA), said that “this place is blessed with scenery unlike any other place in the world.”
“Maybe it’s not the right place to allow oil and gas development,” she said.
She acknowledged that many of the leases that Fidelity has in the Big Flat area near Dead Horse Point State Park and the Island in the Sky District of Canyonlands have been there several years, but more drill rigs are now visible.
“We continue to challenge the oil and gas lease sales in wilderness caliber public lands,” Thomas said.
“We don’t want to see an industrial development zone in that area.”
She said that SUWA continues to be involved, even after the parcels are sold, to make sure that stipulations are followed and that the natural resources in the area are protected as much as possible.
Thomas said that she appreciates how Grand County residents are getting involved and speaking up about oil and gas development in the area.
“It’s great that residents in the community have taken notice and have asked ‘Is this the kind of landscape they want near their homes and where they recreate?’” she said.
Marc Thomas, a member of Sierra Club’s Utah Chapter executive committee, expressed concern about increasing oil and gas development in the Big Flat area.
“Will seeing a plethora of oil and gas pads, pumps and pipelines become the new norm for tourists ferrying between Arches, Canyonlands and Dead Horse Point?” Thomas asked. “A big industrial zone smack between Arches and Canyonlands doesn’t advertise our tourist & recreation based economy very well. People don’t come here to visit oil and gas wells, and the industrial expansion currently underway will eventually impact who comes to visit and will close access to areas that were previously frequented.”
He also expressed concern about reclamation when the oil wells are exhausted.
“At some point, the wells run out or companies go bankrupt and the sites are abandoned,” Thomas said. “There’s no guarantee that money to reclaim the land will have been banked. Should that scenario come to pass, taxpayers will once again have to foot the bill, as with the Atlas Tailings Project, or else the land will remain indefinitely scarred and off limits to those coming after us.”
An area of concern in the BLM report referenced the location of site between Arches and Canyonlands national parks, which is considered a Class I air shed area, where only a small increase of air pollution levels would be allowed.
To mitigate air pollution, Fidelity will be building a pipeline to capture natural gas emissions from the wells.
“We’re investing $70 million to build the pipeline,” said Tim Rassmussen, a communications specialist for Fidelity.
The 24-mile long pipeline will capture gas now being flared in the Big Flat area and would connect gas wells north of Dead Horse Point State Park with an existing pipeline near Blue Hills Road. The pipeline would roughly parallel State Route 313 and the Dubinky Well Road.
“They’re venting and flaring natural gas into the atmosphere right now,” Thomas said. “I don’t think anyone is very happy about the pipeline, but it’s probably better than venting and flaring into the atmosphere.”
Fidelity now has five full-time employees in Moab and are hiring two more in the near future.
“If you factor in our contractors on the rigs and upcoming project, we’ll have 210 to 230 employees in the field at any time,” said Mark Curtis, Fidelity’s operation supervisor in Moab.
The increase of oil and gas development in Grand County during the last year has been an economic boon to county special service districts, such as the Grand County Transportation District, Grand County Solid Waste District and the Canyonlands Health Care District, which manages the Canyonlands Care Center
Monies earned by oil and gas development on federal lands are sent to the state and then shared with the counties to be used to provide residents with basic services, such as transportation, recreation and health care.
According to the 2012 Fiscal Year mineral lease distribution, Grand County service districts received less than $500,000. In the 2013 Fiscal Year, Grand County special service districts received $1.2 million. Between July and November 2013, which is part of the 2014 Fiscal Year, Grand County special service districts received more than $1 million.
Record dividends from wells near parks; some see increased threats to air, water and recreation
“After first year’s production, no other well onshore in the lower 48 states produced as much as that one well.”
What: Presentation by Fidelity Exploration and Production
When: Noon, Tuesday, Feb. 18
Where: Cayonlands by Night and Day, 1861 N. Hwy 191
Cost: $15 Chamber members, $24 non-Chamber members.
More information: Must RSVP. Call 435-259-7814 or email: firstname.lastname@example.org.
Please pre-pay with credit card; or have cash at the door.