Kansas oil drillers consider options under lesser prairie chicken rules

08/18/2014 6:15 PM

08/18/2014 6:38 PM

The lesser prairie chicken – and the federal plan instituted for its protection – has soured the mood of the whole oil and gas industry.

That sourness weighed like a blanket on the packed session of the annual meeting of the Kansas Independent Oil & Gas Association on Monday afternoon.

The federal government in April issued its final rule that declared the lesser prairie chicken a threatened species under the Endangered Species Act and set up a framework for protecting it.

The habitat of the lesser prairie chicken covers central and western Kansas and contiguous areas of Oklahoma, Texas, New Mexico and Colorado. Oil and gas exploration is among the industries and activities the government will regulate as it attempts to safeguard bird populations.

Also affected, according to the U.S. Fish and Wildlife Service, are construction and operation of wind energy towers and cell towers, road construction and maintenance, and off-road vehicle use, among other things.

Speakers at Monday’s session, held at the Doubletree by Hilton Hotel at the Wichita Airport, told oil and gas producers that they face a decision: Keep doing what they’re doing and hope they don’t commit a violation – or enroll in a voluntary mitigation plan that eliminates the possibility of fines but requires following government rules on operating, as well as substantial enrollment and mitigation fees.

Monica Smith Griffin, CEO of Reagan Smith Energy Solutions, which advises clients on how to comply with the rules, said making that decision depends a lot on whether there is documented evidence of lesser prairie chicken mating and nesting near a drilling lease – and how much land is affected.

Even if producers opt against enrolling in the mitigation program, Griffin recommended that producers follow best practices. Those include surveying the area for lesser prairie chicken mating and nesting areas beforehand (which can be done only in April every year), and placing drilling rigs close to existing production infrastructure, if it exists.

“If you showed that you did best management practices, mapped and mitigated on your own, you’re likely to get a much smaller fine, maybe $2,500 instead of $25,000,” she said.

She said that the U.S. Fish and Wildlife Service won’t be looking for violators. Rather, Smith Griffin said, regulators will be alerted to possible violations by others: conservation groups, environmentalists, unhappy landowners, even other operators.

Attorney John Martin, who represents KIOGA along with other state oil & gas industries in a federal lawsuit against the Fish and Wildlife Service, said that the federal rule cries out for a political solution to make it more reasonable.

“We really do need to have a change in this law,” he said. “It’s truly broken. It just makes no sense.”

Reach Dan Voorhis at 316-268-6577 or dvoorhis@wichitaeagle.com. Follow him on Twitter: @danvoorhis.

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