Rocky Mountain Deep: The Next Drilling War

By Andrew Goldstein

Still smarting from the Senate's rejection of drilling for oil in Alaska, the Bush Administration is gearing up for its next big energy battle. This week the Environmental Protection Agency will issue a crucial report on a plan to extract natural gas from an area in the Rocky Mountains four times the size of the proposed Arctic refuge site. The Administration says 25 trillion cu. ft. of natural gas is buried in Wyoming's Powder River Basin--enough to supply the U.S. for a year and worth up to $46 billion to energy companies. The Administration wants to green-light the drilling of more than 35,000 new methane wells in the basin by November. But environmentalists, along with local ranchers, are waging a fierce fight against the project. In the past, green groups have endorsed methane as a cleaner-burning alternative to coal and oil. But to get to the methane in the basin, drilling companies will have to unleash torrents of water from underground aquifers--up to 20,000 gal. per day per well--which could deplete the region's water reserves and, because much of the underground water has a high salt content, potentially destroy thousands of acres of farmland. Ranchers also fear that the roads, pipelines and power lines needed for the project will turn their open prairies into industrial wasteland.

Opponents got a boost last month when a draft report leaked from the EPA's Denver office called the project, which doesn't need congressional approval, "environmentally unacceptable." Aware that such a harsh verdict could delay the project indefinitely, Deputy Secretary of the Interior J. Steven Griles, a former energy lobbyist, asked the EPA to reconsider. The agency's final evaluation is expected this week. But there is another roadblock: the Interior Department's own board of appeals has ruled that three leases in the basin were granted illegally because the environmental impact of drilling for methane had not been properly studied. Interior officials tell TIME that the lease problem is "surmountable" and the objections are "resolvable." If so, Bush would finally have his energy jackpot. But the price would be steep--new fodder for critics who say the White House is willing to trample on the environment in order to serve the energy industry.

--By Andrew Goldstein