Student Post: Coal Bed Methane Production in the Powder River Basin: Boom and Bust

The increased diversity of land uses has increased the complexity of effectively managing and balancing the varied interests associated with those uses. In the past, land and all of the rights to its use was often held by one landowner. Today, title to much of the formerly single owner held lands has been split among many landowners and partitioned into surface and subsurface rights. This reduction in size has brought people and their competing interests closer together. In the West, there is a battle raging over those divergent interests. Environmental, industrial, agricultural, and other interests have positioned themselves in their respective political corners.

The extraction, production and transportation of coal bed methane is one of those hot button topics in the West. The Powder River Basin in southeast Montana and northeast Wyoming is an area where a large amount of coal bed methane mining activity has occurred. However, activity in the region has reduced significantly in recent years due to the drop in the price of methane natural gas. Similar to the current oil boom in Western North Dakota, the Powder River Basin saw similar problems with the influx of large numbers of workers in areas that lacked sufficient infrastructure to support such populations.

Now, Wyoming and Montana are faced with concerns over wells that are no longer in use. Depending on the size and financial resources of the companies owning the wells, a long period of low natural gas prices could force smaller companies into bankruptcy leaving the states the burdens of plugging large numbers of “orphaned” wells. Orphaned wells are an environmental concern. The EPA suggested phased development of the area in order “to allow the agencies more time to conduct the necessary studies and monitor the impacts.” (text at 486) However, the BLM rejected the phased development plan due to its duty to prevent the drainage of leased federal minerals to private leases nearby and due to investment backed rights. Id.

What’s the hurry? Clearly, prices drive production and exploration, but it seems foolish to assume that prices won’t rise to profitable levels again. Is the boom and bust nature of the industry really necessary? Ideally, all of these competing interests should collaborate upon rational ways of developing land and communities that are safe and sustainable. The hurried nature of boom and bust does not leave time for making the complex decisions that will balance divergent interests.