GREEN RIVER - A Canadian energy giant is seeking federal permission to drill 16 exploratory coal-bed methane wells on public lands managed within three federal oil and gas exploration units, according to federal officials.

EnCana Oil and Gas Inc. is interested in the Pappy Draw, East Pappy Draw and North Pappy Draw units.

The BLM released its environmental assessment of the project Aug. 13.

Officials with the Laramie-based Biodiversity Conservation Alliance criticized the proposal, saying the project site lies within a "core area" recently designated under the state's new sage grouse policy.

But company officials said Friday they were confident the project would meet the state's guidelines.

Paul Ullrich, community liaison for EnCana, served on the governor's Sage Grouse Implementation Team that helped write the state plan.

"Sage grouse are a consideration for us pretty much everywhere we operate" in most areas of Wyoming, said EnCana community relations adviser Randy Teeuwen.

On Aug. 1, Gov. Dave Freudenthal issued an executive order outlining the state's plan to protect sage grouse in Wyoming with an eye toward keeping the bird from being listed for protection under the Endangered Species Act.

The order didn't have any authority over the BLM, but BLM officials said earlier this month they would work cooperatively with the state plan.

The order consists of 12 guidelines and a map of "core" sage grouse habitat areas where drilling stipulations could be implemented. The order included a mandate for developers to demonstrate their proposed activity will result in no loss of sage grouse or sage grouse habitat.

Erik Molvar, a wildlife biologist with the Biodiversity Conservation Alliance, worried the Pappy Draw proposal could lead to a downward trend for sage grouse populations in the project area.

He said the proposed project is located within a core sage grouse area and would affect a sage grouse lek complex south of Crooks Gap in the Red Desert that contains one of the three largest sage grouse breeding complexes in the state.

"No sooner has the governor designated core areas for sage grouse conservation than the oil and gas industry is moving into them," Molvar said.

"The new state plan won't help the sage grouse a bit if the BLM allows drilling to move into core areas in ways that are clearly incompatible with maintaining sage grouse habitat," he said.

Molvar said the EnCana pilot project will include well densities greater than the one-well-per-square-mile threshold recommendation in the state plan.

"The BLM could have modified the project to have one well per square mile or less to comply with the governor's core areas, but instead they're moving ahead with a much denser project," he said. "There seems to be a great deal of inconsistency in the BLM's approach to sage grouse."

Teeuwen said the company is working under current sage grouse guidelines. "We're comfortable we can make a successful project there and do what we need to do to protect the bird," he said.

Three units

The BLM's environmental study said the coal-bed methane gas pilot project was originally proposed in June 2002 and subsequently, EnCana obtained the lease interests in the three units.

The project area encompasses about 76 square miles, or approximately 48,350 acres, of BLM-administered lands located 70 miles southeast of Lander in southeastern Fremont County and northeastern Sweetwater County.

EnCana officials said the project aims to explore the feasibility of coal-bed methane gas development on their leases and to evaluate whether large-scale development of the three units within the Pappy Draw field is economically feasible.

The evaluation would be determined through exploration and production involving 16 pilot coal-bed methane wells and three injection wells for disposal of produced water, according to plans.

Based on the results, the notice said EnCana would be able to determine the interaction between the wells, gas production volumes and the potential economics of development.

The environmental assessment estimated construction would require a force of approximately 40 workers.

The workers would likely commute from nearby communities including Rawlins, Wamsutter and Rock Springs. About eight miles of new roads would be required to access the project sites.

Coal-bed methane production has increased dramatically the last 15 years and now accounts for about a 12th of U.S natural gas production, according to federal figures. The majority of future coal-bed methane production is expected to come from western basins in Wyoming and other states.

The U.S. Fish and Wildlife Service is expected to decide before year's end whether to list the greater sage grouse under the Endangered Species Act, a move that could have huge impacts on Wyoming's booming energy industry.

The sage grouse's estimated 160 million acres of existing habitat across 11 Western states is half of the bird's historic range. The bird narrowly missed a federal listing in 2005.

Last week, the BLM announced a new sage grouse strategy that calls for special protections for the bird in the coal-bed methane-rich Powder River Basin in northeast Wyoming.

The new sage grouse strategy unveiled by the BLM's Buffalo Field Office calls for limiting oil and gas development to one well pad per 640 acres within a key, million-acre area of the basin - unless operators can convince the agency their project will result in no loss of sage grouse or sage grouse habitat.

Contact Jeff Gearino at (307) 875-5359 or gearino@tribcsp.com.