New West Series
Companies Cash In on the Mountain West’s Potential for Energy Development
Even with the current boom, more than 90 percent of federal land tagged as having potential for energy development remains undeveloped. But for how long?By Court Weston, Guest Writer, 7-12-11
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| Whether developing solar farms or oil fields, companies are investing millions to purchase the land rights for thousands of acres throughout the Rocky Mountains. Photo Courtesy meesphotography.com. | |
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ABOUT THIS SERIES: Students from The University of Montana School of Journalism, with the help of American Public Media’s Public Insight Network, reported and wrote stories for New West on the energy economy of the Rocky Mountain region. The project originated as part of the Green Thread initiative at UM.
The days of oil and gas men crisscrossing the country, digging wells in hope of striking it rich, has become a far more high-tech, but still lucrative, business.
Although much of the money to be made is in oil and gas exploration, even when it comes to renewables, companies are betting fortunes hoping to lock up the key to energy development – the right plots of land.
One of those companies is Energy Investments, Inc. (EII), a Denver-based operation that currently controls more than 1 million acres in the Mountain West.
Founded in 1992 by former landman and Mobil Oil employee Stephen P. Chamberlain, the company leases acreage for oil and gas exploration across the United States with a distinct focus in the Rocky Mountain Region. The company also leases land for solar and wind energy development.
EII has competition. The Bringham Exploration Company is an independent exploration, development and production company working in the Williston Basin of eastern Montana and western North Dakota.
Russ Cunningham, the vice president of Exploration at BEC, explains what his company does: “Selecting locations for oil and gas wells is a complicated process that involves integrating numerous data sets, then synthesizing these data into a comprehensive interpretation. ... That, with experience, allows one to predict where commercial volumes of hydrocarbons may be present.”
The key aspect when it comes to land used in energy development is determining which areas are best suited for which energy resource.
Companies eyeing solar and wind developments face the task of choosing which areas of the country to bet on. According to the Bureau of Land Management (BLM), there are currently more than 22 million acres of public land that have solar potential and more than 20 million acres that have wind potential. The BLM budgets over $1 billion per year on energy development.
“The most important factor is the abundance of an energy resource in a given area,” said Phil von Hake, a communications consultant for Clean Technology and Green Future Issues. “For Colorado, the best wind resources are on the Eastern Plains, the best solar is in the South, and the best oil and gas resources are in parts of northern and western Colorado.”
After determining areas that may be ripe for energy development, the next step is figuring out how to gain access to work on the land.
“Who owns the land on top of each resource determines how to develop its energy resources,” von Hake said. “You’d apply for a BLM permit to work on publicly owned lands, while you’d deal with a private landowner to develop on their land.”
Those bids can be stunning in their amounts. According to the BLM, the record-high bid for energy development came in August of 2007, when one company put up $14,000 an acre for a 470-acre parcel of land in California.
Although government tax credits and state laws have helped spur renewable energy development, Cunningham said fossil fuels remain the main focus of energy development for investors like BEC and EII.
“You have to consider the existing infrastructure for energy storage and distribution,” he said. “Although the current media buzz words ‘renewable resources’ and ‘green jobs’ are popular, you must be aware of practical application.”
“Fossil fuels are currently the energy villains,” he said, “but the hard facts are hydrocarbons are so integrated into our society that they will be utilized for decades to come.”
Despite the concerns from some sectors of a lack of available public land for energy development, the Institute for Energy reports there are currently 68 million acres of federal lands open to energy development and not being used, meaning roughly 94 percent of the U.S.’s energy development lands are undeveloped.
With political leaders calling for a reduction in America’s dependence on foreign oil, the interest in domestic onshore oil and gas development has continued to grow. As those calls have continued, many have also said land available for energy exploration should be expanded.
This call prompts concerns from those who worry about continued reliance on fossil fuels.
“Instead of calling it ‘a shortage of land,’ I prefer to think of it as an over-abundance of energy demand, or even over-population,” von Hake said. “Planet Earth certainly isn’t getting any bigger, but the planet’s human population has been growing dramatically.”
Von Hake sees an alternative route to any energy crisis. He said that rather than looking for more land to use for energy development, we should place our focus elsewhere.
“Too much of this latest energy debate has been on the supply side,” von Hake said. “We never ask why we need so much energy in the first place.”
“If we ask ourselves that last question honestly, we could re-direct this effort toward upgrading, or even eliminating, our household appliances, better insulating our homes, ditching our gigantic truck for a much more efficient vehicle, and most importantly, thinking and acting more efficiently. That would end up leaving more of our wilderness, and more of our environment unpolluted.”
But even if von Hake’s plea for a focus on reducing energy use do not fall on deaf ears, questions of energy supply remain. Cunningham said this supply question should be a focus of those investing in energy.
“I think research should focus on energy storage and nanotechnology,” he said. “Energy storage in hydrogen fueled vehicles, electric vehicles and solar homes is crucial to move away from a hydrocarbon centric economy.”
As many companies are working on these technologies to address supply and consumer demand, investment firms like EII and BEC will be buying land rights and placing bets of their own.
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Comments
Certainly I would love to see environmental advocates demonstrate ways to cut our consumption of fuel for everyday living and keeping our country running. Do you know of any projects they have underway?