"Meanwhile, Back at the Ranch....."

Big Oil's big 'problem' - excerpts from msn.Money
5/21/08
By Michael Brush

"US giants Conoco and Exxon have more money these days than they know what to do with, so they're handing it out to shareholders. What they aren't doing with it is much that will reduce the oil crunch."

“While many Americans struggle to fill their gas tanks, big U.S. oil companies are making so much money that they literally don't know what to do with it.

Instead of reinvesting more of their newfound wealth to increase supplies or develop emerging technologies that might one day reduce energy costs, they are giving much of the loot to shareholders already enjoying outsized gains.”

So writes Mr. Brush, forwarded to me by Sara Sleuth Sayer. I think she’s tired of my epic style of prose. “Shorter, Dad, shorter. Punch it up. Make it, ah….. shorter.”

Well, for anyone that remembers the whole reason we got into the whole moratorium, Mora Torium, Non-Moratorium Moratorium, business in the first place, we started (royal we, here) the Open Space Pilot Project to ‘encourage’ ConocoPhillips to drill new wells off of existing locations (well pads). Which they can do, it just a little more…….expensive. Or, as Conoco likes to say, “uneconomical.” Have to drill directionally in some instances; have to shut-in (turn off) the existing well while the new well is drilled and, darn it, these things all cost money. Neighboring oil company Devon, however, drilled 21 of 24 wells directionally in 2007. EnCana, and even Conoco, drill as many as 28 wells of the same location. But not here. Way over in Colorado, which is almost, uh, 17 miles away.

“The company (Conoco) made $11.9 billion in net income last year, and it will do even better this year. It plans to give it all back to shareholders, paying more than $3 billion in dividends and spending $10 billion to buy back shares.

That's a lot of cash, enough to take 9 cents off the price of every one of the 141 billion gallons of gasoline consumed in the United States in a year.

Michael LaMotte of JPMorgan Chase (JPM, news, msgs) questioned why ConocoPhillips wasn't devoting more than $15 billion to its capital budget. After all, ConocoPhillips production volumes declined in the last quarter, even without counting production lost when it got booted out of Venezuela.

Citing the juicy returns that energy companies get from finding and producing oil with crude prices are so high, LaMotte expressed exasperation. "I mean, clearly excess cash goes to buyback, but if I look at returns of a buyback program versus (capital spending), what's the thought process there?" he asked.

Conoco chief James Mulva, who places a big emphasis on cutting costs as a way to raise his company's stock, brushed off the protest. "We like the discipline of the share repurchase," he said. "If we find that we have more cash flow, it's not really going to be going toward capital spending."”

I just cannot understand finance, I guess. I’d rather talk about alternative energy, environmental responsibility, “Good Neighbor” initiatives.

“BP spent $688 million, or 4.5% of its capital budget, on renewable energy in 2006 (including a few other activities lumped in to this budget line). ExxonMobil spent nothing that year, says Juhasz. ConocoPhillips spent only 0.5% of its capital budget, or $80 million, on "emerging businesses," which includes alternative energy along with many other projects, says Juhasz.”

Never mind. I just cannot understand alternative energy, environmental responsibility, “Good Neighbor” initiatives, I guess. I’d rather talk about compensation.

“ConocoPhillips' Mulva earned $50.5 million last year, the bulk of which was performance-related. The top seven execs at ExxonMobil got $93.7 million last year including $16.7 million for chief Rex Tillerson.”

Now, don’t you just feel bad for Mr. Tillerson? I’d rather talk about politics.

“ExxonMobil spent more than $15.5 million on federal lobbying in 2006, says Juhasz, and ConocoPhillips spent $4 million last year -- no doubt a reason the two companies enjoyed the billions of dollars in federal tax subsidies the energy industry gets each year.”

Hmmm. Proportionally, it doesn’t really seem like they are overspending here, does it? That $4 million bears about the same ratio to them as a 42 cent stamp does to you when you write your congressman. Feel better?

“One problem is that so much of the world's rich oil reserves are in the hands of national oil companies, says Tom Nelson, a London-based energy sector analyst with Guiness Atkinson Global Energy Fund (GAGEX). Another is that much of known U.S. reserve is off limits for environmental reasons, says Charles Drevna, president of the National Petrochemical and Refiners Association. "Where do you want ExxonMobil or ConocoPhillips to put that money?" he asks.”

Well frankly, Mr. Drevna, I was thinking they could put it into drilling new wells from existing locations in the Open Space Pilot Project here at the Devil’s Spring Ranch – our original proposal. That is, if it’s not just too – uneconomical.

http://articles.moneycentral.msn.com/Investing/CompanyFocus/BigOilsBigProblem.aspx

"Believe, Care, Act"

Made To Stick
2/19/08
By Don Schreiber

Quick, picture the cartoon with that guy in the monk’s robe, scraggly beard, and a sign that reads, “The End Is Near”. But instead of just standing on a busy corner, he’s roaming the halls of a land use conference aggressively button-holing unsuspecting people and explaining, in detail, exactly why the End is indeed so Near.

I am that guy.

Or, at least I’m trying to be that guy. Here’s why; if I showed you that cartoon, minus the message on the sign, you could fill it out, right? And so could your mom and your boss and your neighbor. Everybody knows the scraggily beard guy’s message: “The End Is Near”.

What an amazing marketing success! One of the all time greats in idea delivery. We don’t all buy his idea, but there is no question what he is selling. Personally, I think he just has a context problem. If he walked onstage during a dense, uninspiring, negative lecture on, say, land use, we’d all stand up and cheer.

Unfortunately, I am also the guy giving the dense, uninspiring and negative land use lecture. Or was until I buttonholed a certain person named Ann Adams and she said, “Boy. You really need to go buy a book called, ‘Made to Stick’ and read it. Now.”

How’s that for a direct message? Sensitive guy like me, I could have had my feelings hurt. Hey, it took a lot of work to make that dense and un-
inspiring, negative lecture. But I knew she was right. Partly because my wife Jane kept tugging at my sleeve and whispering loudly, “You are informing people against their will!” and partly because a sensitive guy like me can just tell.

Ann’s uppercut to the jaw of my harangue could not have come at a better time. I was trying to defend our little family ranch in NW New Mexico from aggressive new oil and gas drilling on top of 50 years of unplanned oil and gas development. I desperately needed to get the immediate attention of anyone I thought could help us, most especially, the attention of the oil company. So I had compiled as many salient facts as I could into a 100+ page notebook and was passionately disgorging this material to anyone I thought might advance our cause. Ever try to get the attention of a company whose net profit was in the range of $35 billion last year? I said net profit. To help get the oil giant’s attention, I had targeted all our top public officials and was, in fact, on my way to Washington, DC when, thankfully, Ann got my attention a la the mule and the two-by-four.

I literally went directly from the conference to the bookstore to the airport and boarded the plane, book in hand. “Made to Stick: Why Some Ideas Survive and Others Die,” by Chip and Dan Heath, (Random House, 2007). I had sworn off self-help books back in the late ‘80’s when the “The One Minute Manager” had finally spiraled down to something like, “The One Minute Manager for Tasks That Take One Minute,” and I figured either we’d gone too far in that field or I’d read too much. So it was with some trepidation that I opened the book. Good thing I had my seat belt fastened.

Here I was on a red-eye to DC with meetings beginning the next morning and each page I turned was a story about what I was doing wrong according to the Brothers Heath beginning with the common, fatal flaw, “The Curse of Knowledge.” On the seat next to me was my 100+ page notebook, and it was 100+ pages because I had boiled it down to that! It represented 10 years worth of our experience trying to ranch in the oil field and I had tried to convey all the pain and heartache of watching the land disappear under one well pad after another and no one to stop it. Five major subject divisions and eight tabs of supporting documentation. It virtually radiated the “Curse of Knowledge,” and worse, I had spent big money having it spiral bound to look more professional and so couldn’t take a single page out.

As I said, I wasn’t entirely flat-footed about the fact that I was in trouble, presentation wise. A big clue had already come just days before meeting Ann at the conference when I had talked to Josh Rosen, Chief of Staff of the Lieutenant Governor. Josh told me I would make the presentation three times in a row; once to the Lieutenant Governor, once to the Energy and Natural Resources Cabinet Secretary and once to the Secretary of the Environment. Thirty minutes total for each, but that I should limit my remarks and let them each ask questions. “I can do it in 15 minutes,” I lied. “Oh, I wouldn’t go more than five or six,” Josh had replied. My first thought was to just talk faster, and for a while, I tried that with a kitchen timer. Honestly. I sounded like that disclaimer about the interest rate at the end of a used car radio ad. In the end, I did come up with a sort of summary but, in a testament to our state government trying to help even it’s most long-winded citizens, all three officials just stayed for the whole hour and a half trying to discern what the problem was and if there was really any way they could help. More due to pity than to my message, I think, they agreed to write a joint letter to the oil company encouraging restraint and voluntary environmental responsibility. Doesn’t sound like much, but to me it meant the world. I knew I wouldn’t get that extended time and pity in Washington.

In the hot shaft of that overhead light, I read furiously as Chip and Dan explained what all sticky ideas had in common: Simplicity, Unexpectedness, Concreteness, Credibility, Emotions and Stories. A kind of morbid fascination set in as I could see example after example in their book of ideas so well expressed, so sticky, that we all remember them decades later. John Kennedy’s famous call to “put a man on the moon and return him safely by the end of the decade.” The Heaths’ analysis: “Simple? Yes. Unexpected? Yes. Concrete? Amazingly so. Credible? The goal seemed like science fiction, but the source was credible. Emotional? Yes. Story? In miniature.” What they were explaining was wonderful to me, but how do you frame a land use argument like that? And, depressingly, I already knew what the Heath’s were going to point out much later in the book, “…here’s the thing: You’re not JFK.”

Even red-eye flights do end and 7:45 the next morning found me in Congressman Tom Udall’s office waiting to make my presentation to the Chief Counsel of the House Natural Resources Committee and it’s subcommittee’s staff director. I had wads of scribbled notes saying things like, “…lets put all the oil wells on the moon for the next decade, not on my ranch!” Well, I was only on page 142 and still lugging my 100 page notebook around like a life preserver. Luckily, again, I was preaching to the choir and they were both gracious and considerate of my rambling. I staggered out of there, found page 143 and plowed on, my meeting at Senator Bingaman’s office looming. More scribbling and searching for my highlighter.

That’s the problem with plowing on. Back on page 85, Chip and Dan had written about the “Gap Theory” of curiosity and I had missed the point that “…we need to open gaps before we close them. Our tendency is to tell people the facts. First, though, they must realize that they need these facts.” Jane to Don “You are informing these people against their will!” Don clinging to the 100 page life preserver of facts, his precious notebook.

But plow on I did and was now sitting with the Senator in his private office and describing our problem this way, “If the San Juan Basin was your body, our ranch would be just above your heart, and for over 50 years, the oil companies have been punching and punching holes all around there and gouging roads and pipelines so that your chest would look like a spiderweb connecting the well dots.” At least I wasn’t speed flipping through the notebook or talking like Don Pardo, but the Senior Counsel to the Senate Energy Committee and Bingaman’s Chief of Staff both looked a little pale.

Saved again by luck, (our youngest daughter used to work for the Senator and is remembered fondly), I got out of there with a mandate from the senator to his staff to assist us. Out of further prep time, I went directly to a meeting with the oil company’s Director of Federal Affairs. None of our kids had ever worked there, apparently, but she was professionally cordial.

Back to New Mexico, reading like a madman all the way, to meet Governor Richardson who had just dropped out of the presidential race so he could meet with me. That’s the way I took it.

By now I’m up in the 200’s of the book, and have paged back quite a bit to fill some of my own gaps in knowledge. “Made to Stick’s” task is really very ambitious if you think about how many ideas just don’t stick at all; how few are meaningful and lasting. In fact, a land use conference is a pretty good platform to see how even the professors and professional speakers among us miss the mark, widely. For those of us so challenged, the book contains “Clinics” throughout that examine a message and suggests alternate methods to convey that message accompanied by an explanation of what works, what doesn’t, and why. I was also encouraged to learn that tests showed that it was the “stickiness” of the message that mattered, not the gift of the speaker, JFK notwithstanding.

The book is full of fascinating behavioral tests that are revealing as to why some communication works, and most doesn’t. How intellectual exercise impedes the brain’s capacity to be open to ‘feelings’. How ‘feelings’ are critical to get someone to Care, Care being part of the three-legged stool of Belief and Action. Page after page of well production data and price calculation and rule interpretation ad nauseam in Don’s notebook. Hello?

So that when I saw the Governor, I had a 3 X 5 card with three simple sentences written on it, and a little picture, not the compendium of which I had been so proud. Not that you can skip making the compendium. That’s your research, those are the facts, ma’am, and you have to have those facts and they have to be true, if you are to be Believed. And, for me, the payoff from the Heaths was that if people Believed, and they Cared, then they could Act. I had actually worked for the Governor off and on, and I knew he would be cooperative, and he was. But my single 3 X 5 card presentation let me get the issues across cleanly and left plenty of time for questions without rushing.

The Three Sentences?

Of the 99 wells drilled on our ranch over a 50 year period, only 10% have been drilled from the same well pad.

In neighboring Colorado in 2007, 57% of all wells were drilled directionally.

Drilling directionally from the 99 well pads already on our ranch would let the oil company get it’s mineral, the state it’s taxes, and preserve the remaining open space.

The Picture?

An aerial photo of the maze of wells and roads and pipelines already existing.

Better, yes? A little short on the ‘feeling’ part, but the Governor has an existing ‘schema’ about all the drilling issues. You don’t know ‘schema’? Boy, as Ann would say, you better get this book, and I mean now. Schema is so important that it has 16 references in the Index and it’s a key element of both why people can understand you quickly, like my example with the Governor above, and how you can get people to open up to your idea, as I’m about to tell you.

Up to this point, I had been running around the country drumming up support for my idea to preserve open space. It was working, but, as we’ve seen, much of that was pity, or luck, or established connections. The message had been getting stickier, but the big showdown was to be a meeting on January 31 with the oil company and the BLM. Could we make the idea stick there where it really counted? By now, I’m at the end of the book in the Epilogue, and I’m still learning like crazy. The oil company had an existing knowledge of all the facts, a ‘schema’, infinitely more vast than my 100 page fact book. My facts came from their facts, so, getting them to Believe wasn’t a problem. That leg of the stool was as sound as it would ever be. But we needed to get them to Care, and that, my friends, is a tall order when you’re talking to executives and managers of one of the world’s biggest and most profitable corporations, and you’re just a family ranch.

It’s the night before the big meeting, I’m through with the book, and I’ve got to make this giant Care before I can make it Act. Jane and I have been going round after round with these guys for 10 years, always about environmental responsibility and stewardship and blah, blah, blah and I realized that the single reason we were so passionate was that we were trying to save the ranch for our kids. Jane had just bought a youth saddle for one of our granddaughters who is still too little to ride and I thought, “Why? At this drilling rate, there’ll be nothing left to ride on when she’s ready.” Our kids, and their kids, are the real owners of the ranch, but the oil company, the BLM, doesn’t know them. I also realized looking back through my notes of all those rounds fought, we had actually always won if you conceded the fact that they were going to drill anyway. We never thought we could stop them drilling in an established field; the fights were always about Where, and When and How, not If. I got out the scissors and duct tape and went to work. Oh, and Jane baked a cake.

At the presentation the next day, as everyone was jockeying for position at the conference table and exchanging preliminary pleasantries, Jane set down a white cake with the oil company logo in icing in one corner, our ranch logo on the opposite corner, and the letters “O S P P” in the middle, for “Open Space Pilot Project,” the name we have given the idea that both the oil company and our ranch could have their cake and eat it, too. She laid out little napkins and plastic forks, and placed a bunch of balloons next to it, saying nothing. It was the focus of lots of curiosity and conjecture, an unusual object to say the least.

The BLM asked me to begin, and I pulled out eight single sheets of paper, each with a picture and just a few lines of 42pt type so they would be visible from across the room. I duct taped them to the wall. Each page was one of the rounds we had fought with the company over the years and they all had the exact same format: Our Request, their Answer (always, ‘No’), their Reasons, and the Outcome (always positive for us). It revealed an unexpected pattern for us, and I know very unexpected pattern for them. The reason for the positive Outcome, I said, was that Jane and I had always made sure our facts were right then always asked for something reasonable (in our opinion to be sure), and then we never gave up. In one case, it was five years to get some damage repaired! The Outcome exercise didn’t involve any intellectual calculating, the simple stories were there for all to see.

The most common reason for saying ‘No’ to any of our requests was money. Whatever we wanted done was going to cost money and they were dedicated to saving money and returning a maximum profit to their stockholders. In fact, we had recently been paid $7,000 by the oil company for some surface damage. I reached into my bag and pulled out $7,000 in cash and laid it on the table in front of the senior executive and said, “Jane and I want to return this money to you. We would like to demonstrate that not all decisions can be based solely on money and that the Open Space Pilot Project is more important to us than money. Once the open space is gone, no amount of money can buy it back.” I think that got everybody’s feelings up in the air. I know mine were as I said goodbye to seven grand.

Finally, I took out five more single sheets of paper, again with just a few lines of 42pt type and the rest of the page a large photo of one of our kids. The copy said which kid it was, what they did, and what contribution they had made to either the ranch, or the Open Space Pilot Project, or both. I duct taped them into a line up. “When you say ‘No’, as you have done in the past, this is who you are saying ‘No’ to. Jane and I won’t be here that long. These kids, and their families, will be living with the surface destruction you cause.”

Simple, Unexpected, Concrete, Credible, Emotional and Stories. My 100 page notebook never saw the light of day. In the end, just 13 pieces of paper so sticky we had to peel them off the wall.

We talked about it for a little while, and the BLM ordered a moratorium on new surface disturbance and formed a committee of the oil company, the BLM and our ranch to see if we could work out some cooperative resolution with the goal of preserving open space.

Then we all had a piece of cake.

"Ohhhhh, doughnuts....."

"Rancher, driller reach accord"
1/20/08
By Don Schreiber

“Rancher, driller reach accord; Confrontation ends peacefully” was the Farmington Daily Times front page headline on December 7, 2001. I was that rancher, Burlington the ‘driller’, and the confrontation did end peacefully enough, the oil company bombarding me with doughnuts instead of bulldozers. That Sunday’s Daily Times editorial reviewed the situation and said, in part, “While oil and gas are still the biggest moneymakers in the area, tourism is gaining ground, accounting for 30 percent of the local economy.”

Our entire argument was about one well, the 418s, that Burlington wanted to drill on our ranch. Burlington was going to ‘twin’ the 418s, twin meaning drill it from an existing well pad, in this case, the 155M. Burlington’s road to the 155M was a disaster, the worst on the new Devil’s Spring ranch that my wife Jane and I had just bought. The 418s was the first well that Burlington ever drilled on the Devil’s Spring ranch with us as the owners. We thought they should fix the bad road before drilling a new well, and that they should pay us something for the 30 year disturbance we were facing.

They disagreed; we confronted.

It just didn’t make sense to me. While we didn’t own any mineral rights, we did for sure own the property and they were about to cause a whole new disturbance and double the traffic for the next 30 years. Wasn’t that worth something? And shouldn’t they have to fix an existing problem, the access road, before beginning to drill again? “Nope,” said Burlington’s construction supervisor at the time, Chuck Smith, with whom we were was negotiating. “Chuck, I can’t back down. I’m putting up a temporary gate to stop you.” “Fine. Do it and we’ll come through that gate with a bulldozer and negotiate with you after the well is drilled. We will be there in the morning.” I ran to put up the gate and hauled my son’s little camper down and chained it to the gate and moved in.

And waited. And waited. No Chuck. No bulldozer. I was afraid to leave and the roads were so bad I couldn’t ask Jane to bring me any food. There were some leftover snacks from hunting the the camper, a few. I really thought the sheriff would come, I’d refuse to move, he’d throw me in jail and then I could get something to eat. My plan wasn’t what you would call well thought out. They let me sit down there living on sunflower seeds and Jujubes.

So when Chuck and another Burlington employee showed up with a box of doughnuts on the third morning, I was eyeing that box pretty carefully. Their mistake, I can now reveal, was that they politely offered me a doughnut before we got down to business. Thus revived, I gathered enough strength to hang in there and, after some private cell phone calls to someone, Chuck announced that they would pay damages and fix the road. Deal. Fix the road, drill from the same well pad, pay up for damages.

The newspapers wrote it up and included a quote from then Burlington General Manager Richard Fraley, “He (Schreiber) has things he wants to try and we’re accommodating him in that regard.”1

In the following seven years, we’ve had other wells drilled on our ranch, both our private land and on the public land that surrounds us and is our grazing permit. We’ve had a variety of other negotiators, some better than Chuck, some worse. And we’ve had some real donnybrooks now and then. It’s only fair to say that no well is good news for us, but we know we can’t stop the drilling, so we try to make the best of it. And we’ve bumped along like that since the great Doughnut Summit back in ’01.

This Christmas, however, brought a different kind of present from ConocoPhillips in the form of registered mail informing us that, in addition to the two wells they had already said they would drill on us in 2007, they were going to drill seven more. A total of nine. I don’t think we had ever had more than three in a single year.

To be honest, I had thought they must be about through drilling out here, or at least cutting new roads and building new well pads. I was thinking about 80 acre spacing, meaning one well every eighty acres and I knew we had more than that already, it was easy to count them up on a map. Each section has 640 acres, so with one well every 80 acres, that’s 8 wells per section. And when you put that many wells in each section and connect them up with the roads necessary to get to them and the pipelines necessary to get the gas out, it starts to look like a maze. And take it from me that ninety percent of the roads go down the middle of each little valley, grass flat or draw, right where your best grazing opportunities are.

But what I didn’t realize is that it was not just eight wells per section, it was eight wells per section, per formation! We have four or five formations present in most of the San Juan Basin so it is more like 40 wells per section! We’ve got about twelve wells per section2 now and it looks like your lymphatic system already. Now we’re going to more than triple that number? It just didn’t make sense. And the roads were in really bad shape, lots of wells pads never reclaimed, exposed pipelines and electrical, and we’re going to drill nine new wells on our place? Worst of all, eight of the new wells would be drilled each from a brand new well pad. New road, new well pad, new pipeline. Only one would be ‘twinned’. The problems were so much worse than the old original standoff we had with the 418s and with these nine wells scattered down five different routes all over our ranch there would be no temporary gate and camper maneuver. No possibility here of a Doughnut Summit.

At the current level, the drilling impacts have us just at the breaking point of being an industrial zone and not a ranch. You’re never out of sight or sound of a well location, oil field traffic is constant, trying to raise calves a real struggle. But with such an escalation of new locations, man. I just went into the fetal position under the Christmas tree for several days seeing the situation as hopeless, seeing the ranch disappear under one well after another, seeing our family plan to leave the ranch to our five kids blown apart. Jane had just bought a youth saddle for our granddaughter Sadie who is five. For what? So she can race in front of speeding water trucks and try to slow them down like Grandpa does? Grandpa can’t do it with 12 wells per section, much less 24 or 40.

But you can’t roll up in a ball and feel sorry for yourself forever and besides, the kids were all calling to say, “Dad! Do something!” I was just absolutely without an idea of what to do until I remembered a conversation back in John Zent’s Burlington office a few years ago when John, talking about future drilling plans said, “Our goal is to drill fifty percent of all wells off existing pads.” I set about gathering the data in the nine sections that encompass our ranch and found that, in the entire history of the area, only ten percent of the wells had been drilled from an existing pad.3 In the last ten years, only six times. And, of course, of the nine proposed new wells, only one to be drilled from an existing well pad. I took that information directly to ConocoPhillips. I took along some pictures of the condition of the roads and well pads that lay all around the proposed new wells.

Couldn’t you, I asked, couldn’t you drill the new wells from existing pads? And then, instead of creating a new problem, set about fixing the ones that already existed? Some of the new wells can be drilled straight down from an existing pad, some would have to be drilled directionally. They said they would look at it and get back to me. I’m still waiting, but at least I’m not chained to some gate eating dried-out peanut butter crackers. And I have the word of honor of ConocoPhillips head land man, Mike Mankin, his word of honor as a Texan that they will not start even the survey process until we meet again. “Gotta be win-win, pard.”

Now, I know that it is more expensive to drill from an existing pad, either straight or directional because the well that is already there has to be turned off (shut-in) and the equipment dismantled and moved, an extra expense and loss of income. In the past, both Burlington and ConocoPhillips have both said such drilling is ‘uneconomical.’ But ‘more expensive’ and ‘uneconomical’ are two different things. So I looked around for some data beyond my discovery that only ten percent of our wells have been twinned. (I only know of one that is directional.) I didn’t have to look very far to find that in Colorado in 2007, fifty-seven percent of all well permits applied for were for directional wells.4 And far beyond twinning, Encana Oil and Gas spokesman Doug Hock said Encana can drill up to 28 wells from a single pad.5 Directional drilling isn’t ‘uneconomical’, it’s just not as fast and as cheap as drilling a straight hole on a brand new pad. And using an existing pad does hold long term safety and financial benefits for the company. Long term. For a company with $30 some billion in profits in 2006 and more in 2007, doesn’t fast and cheap seem, well, cheap?

You can never reduce nature to a dollars and cents equation. The value of the fish you kill with arsenic mining gold will just never equal the value of the gold recovered. Never. And besides, if you try to apply an economic ruler to everything you risk becoming a cynic, someone who, Oscar Wilde said, “Knows the price of everything and the value of nothing.”

While we have been waiting, I wouldn’t say I’ve been standing still and waiting. Once up out of the fetal position, I found I could get around pretty well and the more data I had, the more I thought others might like to see it. Others who might be in a position to encourage an oil company beyond my personal plea for reasonableness. So I went to see the Lieutenant Governor, who was filling in stateside for our presidential candidate, and the New Mexico Secretary of Energy and Natural Resources, and her Director of the Oil Conservation Division, and the Secretary of the Environment. They spent a little time looking at my data and asking me questions, then jointly signed a letter to ConocoPhillips saying, in part, “It is our hope that you will take a leadership position in developing your mineral interests by utilizing existing roads and well locations (pads) in the area and by so doing allow enough open space for other meaningful uses of the land and a chance for the State to study the effects of surface disturbance on wildlife and water quality.”5 That was Friday, January 11.

Last week, Senator Bingaman reviewed the material, as did Congressman Udall and both put in calls to ConocoPhillips on behalf of drilling at the Devil’s Spring ranch from existing locations; Congressman Udall called Todd Creeger, now the General Manager in Farmington, and the Senator’s office called a little higher up the ladder.

An interesting piece of new data popped out as a result of Congressman Udall’s call to Todd Creeger. Remember how John Zent had said that Burlington’s goal, now ConocoPhillips, was to drill fifty percent of the wells from existing pads? When I met with Mike Mankin, (“Gotta be win-win, pard.”) on Wednesday, January 10, the day before going to Santa Fe, Mike told me he was concerned about the ten percent ratio on our ranch because, “Our goal is to drill forty percent from existing locations (pads).” Then when the Congessman spoke to Mr. Creeger on Tuesday the 15th, Mr. Creeger said ConocoPhillips was drilling thirty percent of its wells from existing pads. 50%, 40%, 30%? That’s a lot of slippage in a hurry, and all in the wrong direction.

Not that it’s overly material for our ranch since we already know it’s ten percent over a 50 plus year history and that eight out of the nine wells were proposed to be drilled each from a brand new pad. Okay, one out of nine is actually 11.11% if you want to be that way about it.

So all this friction rubbing up against public officials created a spark that landed me an appointment with the Senate Energy Committee staff and the House Natural Resources Committee staff this coming Thursday. The United States Senate. The US House of Representatives. This coming Thursday, in Washington, DC. There I’ll be presenting the same data and examples that the State officials and the Senator and the Congressman have seen, but I’ll also be looking for more data that I believe those Committees can help me with. Data concerning the success rates that oil companies, including ConocoPhillips, have with the Applications for Permits to Drill. Data pertaining to any possible fines that may have been levied against the oil companies, including ConocoPhillips, for failure to meet the minimum BLM specifications. Fines levied in any amount. Fines for things like, say, multiple access to well locations; unrehabilitated well pads; serious erosion on roads ; importation of noxious and invasive weeds and plants like Russian Knapweed and Salt Cedar. I’m pretty sure the data is available.

I watched with interest the Otero Mesa drilling conflict, and the Galisteo Basin moratorium. Lots of good data there, good people working hard to protect those areas. I met some of them and was impressed.

But we can’t all be voted Miss Georgia Peach or Homecoming Queen. Don’t get me wrong, those places are special and deserve protection, but, Otero Mesa is more beautiful than what we have here at Devil’s Spring Mesa where we look north to the La Platas and San Juans and south to Angel Peak and Huerfano? Galisteo Basin is more culturally rich in artifacts and lore than Gobernador, the birthplace, both in legend and in fact, of the Navajo People? The absolute first place that their specific evidence as a people was found on the face of the earth?

Here’s a little story about that place, a specific site about nine miles east of our ranch. According to Navajo legend, it was there that the baby who came to be known as White Shell girl was found and raised by First Man and First Woman. She grew up to give birth to the Hero Twins. Called Monster Slayer and Born For Water, the brothers ridded the world of the Monster Gods and made it a fit place for the peoples of the Navajo Tribe to come forth. And those ancient people, according to the legend, first set foot upon the face of the earth at a very particular spot beneath a small, sacred peak near the ranch.7 At this six thousand foot altitude you can see that peak, Gobernador Peak, from 100 miles away.

Hey, I know we’re drilled-up like Swiss cheese around here, but don’t tell me we’re not culturally rich.

And as for Spanish culture, if you were looking at that same Gobernador Peak in 1705, you would have seen Captain Roque Madrid and his Spanish expedition ride into Gobernador to subdue the Navajo and make them subjects of the Spanish Crown.8 The natives fought many battles and lost, of course, against the Spanish professional cadre mounted on horseback and with the most advanced weaponry and armor of the day.

But the Navajo didn’t lose them all. There were some spectacular defeats of the Spanish, one at the twin mesas of Santos and Magdelena just a few miles from their sacred peak of Gobernador. And when they did lose, it didn’t necessarily mean they gave up. In one famous case, a captive man threw himself off the Largo Canyon cliff rather than submit.

Just how culturally rich do we have to be to beg a little cooperation, beg to save a little remaining open space?

A few of Captain Madrid’s descendants live here still, probably, and certainly the mark of the Spaniard is everywhere you look; Santo Nino, Jaramillo, Ojo de la Cueva, and, of course, Gobernador. There are no more mythic monsters, no more savage conquistadores, and very, very few ranchers. Gone are all the little communities, the churches, the schools, the livestock drives, replaced now by 20,000 miles of dirt roads connecting 20,000 gas wells and countless miles of pipelines sending $28,000,0009 worth of natural gas a day, a day, through the nearby processing hub of Bloomfield. And the new folks renamed the area. It’s called, “The Oil Patch” and that sacred peak, birthplace of the Navajo Nation? The roughnecks call it Molly’s Nipple.

So yesterday, that would be Saturday, the 19th, I was talking to former state land commissioner Ray Powell at a land use conference in Albuquerque and reviewing our situation. He said, “Speaking of culture, let me tell you something I think will interest you. Corporate culture can play a big part in how a company conducts itself. When I was Land Commissioner, I was just stunned one day when an oil company representative came to me with a check for $4 million and said, ‘There has been a little glitch in the accounting systems of the State and of our company that have allowed us, over time, to cut this $4 million from what we pay you. It’s a technicality, but it’s wrong and we owe you the money. Other companies are doing it.’ We looked into it, and sure enough, 16 companies owed the State of New Mexico a combined $144 million. Fifteen companies paid up voluntarily. We had to sue only one, Exxon, for $27 million. We won. That money went straight to the school kids of this state. The company that came to us first with the $4 million check? Conoco. I think you’re going to be all right.”

“Well,” said the Zen master, “we’ll see.”


Footnotes:

1. FDT Dec. 7, 2001 pg. A5.
2. GO-TECH http://octane.nmt.edu.
3. Ibid.
4. FDT Dec. 30, 2007 pg. B7.
5. Ibid.
6. Letter attached.
7. Dr. Hugh Rogers, “Navajo Legends”, summer, 1999 private lecture
8. ”The Navajo In 1705, Roque Madrid, John P. Wilson, Rick Hendricks and David Brugge.
Merle Dennis, Natural Gas Consultant, Jan. 1, 2008 private lecture