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Federal regulators give green light to Moneta Divide oil and gas project
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Federal regulators give green light to Moneta Divide oil and gas project

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Encana Water Treatment

Part of the land included in Aethon Energy's Moneta Divide oil and gas development. The federal government will allow the project to move ahead.

An energy company received approval to drill 4,250 additional wells in central Wyoming, under a final decision released Friday by the Bureau of Land Management.

The bureau’s record of decision allows Aethon Energy and Burlington Resources Oil and Gas Company to drill 4,250 additional wells as part of the closely watched Moneta Divide project.

The final decision does require the company to adhere to several resource management protections, including steps to protect groundwater, critical sage grouse habitat and air quality and more.

“I appreciate all the hard work and attention put into this project,” Duane Spencer, the acting state director for Wyoming Bureau of Land Management, said in a statement. “This team effort improves the quality of BLM analysis and helps the agency make informed decisions on complex projects like Moneta Divide.”

The agency issued a final environmental impact statement on Feb. 21 then collected comments from the public and the governor.

Aethon and Burlington applied to install 4,250 new wells throughout 327,000 acres of land — a checkerboard of private, state and federal land — about 40 miles east of Riverton. The companies aim to produce 254 million barrels of oil and 18.16 trillion cubic feet of natural gas over the project’s estimated 65-year lifespan, according to the bureau.

But the company’s request to expand was met with widespread protest from conservationists and nearby landowners. Many feared the contaminants in the briny water would pollute Alkali and Badwater creeks or eventually flow into the Boysen Reservoir Basin.

Under the federal National Environmental Policy Act, the bureau was required to consider how development on public land could impact the environment and cultural sites. In its final environmental impact statement, federal regulators weighed multiple “alternatives” for the project, ranging from approving, rejecting or amending the proposed project to ensure the activity would not compromise water and wildlife.

The final approved plan involves amending the Casper Resource Management Plan to protect the Cedar Ridge Traditional Cultural Property, a sacred Indigenous site.

“Aethon is pleased that the multi-year process to obtain the Record Of Decision on the Moneta Divide (environmental impact statement) is complete,” spokeswoman Stefanie Scruggs said in a statement.

Worries over water

The federal decision comes months after state environmental regulators decided to deny the company’s request to release higher volumes of discharged wastewater as part of its proposed expansion project earlier this year.

In its effort to increase oil and gas drilling in Natrona and Fremont counties, the energy companies also requested approval from the state to discharge upward of 8 million gallons of water per day, a 400 percent increase from the current limit.

But a letter, obtained by conservation groups through a public records request, revealed the company violated its existing permit by contaminating the nearby Alkali and Badwater creeks.

The Department of Environmental Quality found black sediment deposits, foam and oil accumulation in the nearby Alkali and Badwater creeks in violation of Aethon's existing state permit, according to the Dec. 17 letter.

Aethon told the Star-Tribune in February it was addressing the matter.

The Northern Arapaho Business Council had also opposed Aethon’s request to discharge more water, due to the potential damage to the Boysen Reservoir, the Wind River and surrounding tribal trust lands.

“Tribal members recreate, hunt, fish, and operate fishing and whitewater rafting businesses on these waters and surrounding lands,” the business council stated in a comment submitted to the Department of Environmental Quality last year. “Maintaining the environmental quality of these resources for current and future generations is essential.”

Following months of public outcry, state regulators elected to retain the previous limits in a draft permit issued in January, due to the lack of a functioning water treatment unit at the facility. The Wyoming Department of Environmental Quality has not yet issued a final discharge permit for Aethon, according to Keith Guille, the agency’s public information officer.

In addition to maintaining existing limits on discharged wastewater in the permit, it also imposed routine water sampling requirements to prevent pollutants from flowing into the nearby Boysen Reservoir Basin.

Yet, the Bureau of Land Management missed an opportunity to include more stringent safeguards for water in its final decision too, said Alan Rogers, communications director for the Wyoming Outdoor Council.

“Given the long history of polluted wastewater flowing from Moneta Divide into Boysen Reservoir, this seems like a missed opportunity,” he said in a statement. “The range of options for how the operator can dispose of wastewater is really broad, and there’s no set timetable for when treatment facilities need to come online.”

To Kelly Fuller, energy and mining campaign director at the Western Watersheds Project, the record of decision was “weak” and will not adequately protect Class I waters in the Wind River from being degraded.

“(The record of decision) allows the Moneta Divide Project to operate before the project’s treated water discharge pipeline is constructed and doesn’t set a deadline for putting that pipeline into operation,” she noted. “The treated water discharge pipeline is the BLM’s preferred method of water disposal, but there is no guarantee that it will ever be built at all.”

Meanwhile, some public officials in Fremont and Natrona counties have said the state’s decision to tighten the allowable discharged water volumes for the company hurts county governments reliant on oil and gas revenue.

Aethon estimates its proposed expansion could generate up to $375 million in federal, state and county mineral taxes.

Oil and gas companies have long been embattled in permitting wars with regulators and the public due to disagreements over discharged water. The Moneta Divide project’s environmental review stretches back to 2012 when it was initially proposed by Encana Oil and Gas and Burlington Resources.

The federal stamp of approval for the project does not mean the companies can begin drilling projects right away. For one, operators must apply for permits to drill for each well.

Furthermore, weak oil and gas market conditions throw the operators’ ambitious plan for future exploration and development into question.

When asked on Friday by the Star-Tribune if Aethon planned to begin development soon in the Moneta Divide project area. A spokeswoman said, “not at this time.”

Follow the latest on Wyoming’s energy industry at @camillereports

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Energy and Natural Resources Reporter

Camille Erickson covers the state's energy industries. She received her master's degree at Northwestern University's Medill School of Journalism. Before moving to Casper in 2019, she reported on business and labor in Minneapolis, Chicago and Washington.

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