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September 21st, 2018

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Energy News: Fracking Update
Nevada’s Ruby Mountains Targeted For Oil Lease Auction
By Frank X. Mullen

As the world’s oil prices continue to rise, Nevada’s Ruby Mountains are at the heart of a conflict over oil development in areas of the state formerly off limits to exploitation.

The snow-capped range is mostly in Elko County and is renowned for its beauty, abundant wildlife and recreational opportunities, including hiking, extreme skiing, bird watching and hunting. The higher altitude sections of the Rubies were designated as the 90,000-acre Ruby Mountains Wilderness Area in 1989. The isolated Seitz and Echo Canyons are further preserved as an ecologically special Research Natural Area.

The U.S. Forest Service, which manages the range, is preparing an environmental assessment for 54,000 acres of the area in preparation for auctioning off oil and gas leases. That has environmental groups and those who frequent the area up in arms.

“The Ruby Mountains are the absolutely inappropriate place to drill for oil and gas,” says Brian Beffort, director of the Toiyabe Chapter of the Sierra Club. “The range hasn’t got much (petroleum) potential to begin with, but it does have high quality habitat and recreational and Native American cultural resources.”

 Drilling in the Rubies would be done with hydraulic fracturing, also called fracking. The technology makes Nevada more attractive to oil companies that believe they can recover previously-unreachable oil trapped in shale formations miles underground. Environmental groups that oppose the process say the method threatens water supplies, pollutes the ecosystem and stimulates earthquake activity. In the case of the Rubies, environmental groups in opposition to oil leasing have joined forces with hunters, recreational interests and conservation organizations.

Beffort says it’s foolish to cling to “19th century technology” like drilling for fossil fuels when oil reserves are so limited and because extraction scars wild areas not only at the drill site, but by carving access roads and building support facilities. “It’s a better idea to develop our sun and geothermal resources,” he says. He notes that oil found in Nevada is low quality, used for machine lubricants and other low-end applications, and won’t ease the nation’s dependence on foreign oil for fuel purposes.

 Although the state traditionally hasn’t been a leader in oil production, no one knows what profit potential may lie in pools miles underground. Fracking technology, although expensive, has made those reserves more attractive in a state that already has some of the toughest fracking regulations in the nation. A legislative attempt last year to completely ban the method died in committee.

William Ehni, a geologic consultant who works with oil companies, told Nevada lawmakers considering the ban that the hydraulic technology could create jobs and provide more funding for schools. He testified that Nevada “is on the cusp of having a huge amount of income from exploration and development.” He cited a report from the Association of American State Geologists that found no evidence that the method harms water supplies and concluded its relation to increased earthquake activity is negligible.

“Hydraulic fracturing in the state of Nevada will enable the development of hydrocarbon resources that would benefit Nevada and its citizens financially,” he told lawmakers. “…The modern techniques that we use for fracking is probably cleaner and more safe than conventional techniques.”

Beffort says short-term economic benefits from fracking in Nevada are far outweighed by the inestimable loss caused by drilling. Nevada’s wild areas, he notes, must continue to be a valued resource for generations yet to come.

The Sierra Club, along with the Center for Biological Diversity and the Friends of the Nevada Wilderness, also are co-plaintiffs in a federal lawsuit that seeks to force the Bureau of Land Management to rescind oil drilling leases it sold last year. In addition, the suit asks a judge to forbid permits on an additional 296 square miles of public land in Nevada until the agency complies with federal law the groups say require a comprehensive examination of the potential effects of fracking.

But how much oil lies deep under Nevada’s desert?

The Silver State traditionally has been one of the lowest oil-producing states among the 31 in the nation. Oil production peaked in Nevada in 1990 with about 4 million barrels and dropped to about 700,000 barrels in 1999. Nevada’s wells produced about 427,000 barrels of oil in 2010, mostly from wells in Nye and Eureka counties. That was just 0.02 percent of the total oil production in the U. S. at the time, according to the Department of Energy figures.

Thus far, just seven fracking wells have been drilled in Nevada, where about 20 fracking permits have been issued, according to the Nevada Division of Minerals. Houston-based Nobel Energy operated two wells in Nevada, but pulled out of the Silver State after increased supply and lower oil prices made the ventures less profitable.

Although the Trump Administration is pushing for fewer regulations and greater oil production, history shows supply and demand, rather than who is in the White House, drives domestic oil production. With higher oil prices, U.S. production is at new highs and expected to increase this year. Gasoline prices also are rising, but demand remains flat. While production offshore and in oil-rich states is booming, it may be some time before Nevada becomes anything but a bit player in the nation’s oil patch.

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