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During the summer of 2008, people living near the PinedaleMesa (sometimes called the Pinedale Anticline) inWyoming were anxiously waiting for the Bureau of LandManagement (BLM) to issue a decision regarding whetherQuestar and other energy companies would be allowedto drill thousands of ugly natural gas wells all over theserene wilderness that lay atop the mesa. The PinedaleMesa is a 40-mile-long, 300-square-mile plateau extendingnorth and south along the eastern side of Wyoming’sGreen River Basin, an area that is famous as the gateway tothe hunting, fishing, and hiking treasures of the Bridger-Teton wilderness. The city of Pinedale, which sits belowthe mesa, a short distance from its northern end, was alreadysurrounded by hundreds of recently drilled wellsthat ceaselessly pumped natural gas from the vast pocketsthat are buried underneath the region and which are estimatedto contain 25 trillion cubit feet of gas worth billionsof dollars.Questar Corporation, an energy company with assetsvalued at about $4 billion, is the main developer of the gaswells around the city and had already drilled several wellsup on the mesa that overlooked the city. Occasionally elk,mule deer, pronghorn antelope, and other wildlife, includingthe imperiled greater sage grouse, descend from theirhabitats atop the mesa and gingerly pick their way aroundand between the wells Questar drilled around Pinedale.Not surprisingly, environmentalists were at war with Questarand the other energy companies, whose plans to expandtheir operations on the mesa, they claimed, wouldhave serious negative effects on the wildlife on the mesa aswell as on the beauty of the area.The federal government’s Bureau of Land Management(BLM) was responsible for deciding what was donewith the acreage on the mesa. Of 198,034 acres on themesa, the federal government owns 158,000, Wyoming owns 9,800, and 29,800 are privately owned. In 2000, the BLM had authorized limited drilling on the mesa, but hadimposed several restrictions that protected wildlife fromthe full impact of the drilling. In 2008, the Bureau was beingasked by Questar and the other companies who wantedto drill on the mesa to remove its limits on drilling by allowingmore than 4,300 additional wells, as well as to liftone of the restrictions that cushioned the drilling’s impacton wildlife but had proven very costly to the companies.Headquartered in Salt Lake City, Questar Corporationdrilled its first successful test well on the PinedaleMesa in 1998. Extracting the gas under the mesa wasnot feasible earlier because the gas was trapped in tightlypacked sandstone that prevented it from flowing to thewells and no one knew how to get it out. It was not untilthe mid-1990s that the industry developed techniquesfor fracturing the sandstone and freeing the gas. Full-scaledrilling had to await the completion of an environmentalimpact statement, which the Bureau of Land Management(BLM) finished in mid-2000 when it approved drilling upto 900 wells on the federally owned acreage on the PinedaleMesa. By the beginning of 2004, Questar had drilled76 wells on the 14,800 acres it leased from the federal governmentand from the state of Wyoming and the companyhad plans to eventually drill at least 400 more wells. Energyexperts around the country welcomed the new supplyof natural gas, which, because of its simple molecularstructure (CH 4 ), burns much more cleanly than any otherfossil fuels. Moreover, because natural gas is extracted inthe United States, its use reduces U.S. reliance on foreignenergy supplies. Businesses in and around Pinedale alsowelcomed the drilling activity, which brought numerousbenefits, including jobs, increased tax revenues, anda booming local economy. Wyoming’s state governmentlikewise supported the activity since 60 percent of the statebudget is based on royalties the state receives from coal,gas, and oil operations.Questar’s wells on the mesa averaged 13,000 feetdeep and cost $2.8 to $3.6 million each, depending onthe amount of fracturing that had to be done. 1 Drilling awell typically required clearing and leveling a 2- to 4-acre“pad” to support the drilling rig and other equipment.One or two wells could be drilled at each pad. Access roadshad to be run to the pad, and the well had to be connectedto a network of pipes that drew the gas from the wells andcarried it to where it could be stored and distributed. Eachwell produced waste liquids that had to be stored in tanksat the pad and periodically hauled away on tanker trucks.The BLM, however, had imposed a significant restrictionon Questar’s operations on the mesa. Largeareas of the mesa provide habitat for mule deer, pronghornsheep, sage grouse, and other species, and the BLMimposed drilling rules that were designed to protect this.Chief among these species was the sage grouse.The sage grouse is a colorful bird that today survivesonly in scattered pockets in 11 states. The grouse, whichlives at elevations of 4,000 to 9,000 feet and is dependenton increasingly rare old-growth sagebrush for food and toscreen itself from predators, is extremely sensitive to humanactivity. Houses, telephone poles, or fences can drawhawks and ravens, which prey on the ground-nesting grouse.It is estimated that 200 years ago the birds—known fortheir distinctive spring “strutting” mating dance—numbered2 million and were common across the westernUnited States. By the 1970s, their numbers had fallen toabout 400,000. A study completed in June, 2004 by theWestern Association of Fish and Wildlife Agencies concludedthat there were only between 140,000 and 250,000of the birds left and that “we are not optimistic about thefuture.” The dramatic decline in their number was blamedprimarily on the destruction of 50 percent of their sagebrushnesting and mating grounds (called leks ), which inturn was blamed on livestock grazing, new home construction,fires, and the expanding acreage being given over togas drilling and other mining activities. Biologists believethat if its sagebrush habitats are not protected, the birdwill be so reduced in number by 2050 that it will neverrecover. According to Pat Deibert, a U.S. Fish and WildlifeService biologist, “they need large stands of unbrokensagebrush” and anything that breaks up those stands suchas roads, pipelines, or houses, affects them. 2In order to protect the sage grouse, whose last robustpopulation had nested for thousands of years on theideal sagebrush fields up on the mesa, the BLM requiredthat Questar’s roads, wells, and other structures had tobe located a quarter mile or more from grouse breedinggrounds, and at least 2 miles from nesting areas duringbreeding season. Some studies, however, concluded thatthese protections were not sufficient to arrest the declinein the grouse population. As wells proliferated in the area,they were increasingly taking up land on which the grouseforaged and nested and were disturbing the sensitive birds.Conservationists said that the BLM should increase thequarter-mile buffer areas around the grouse breedinggrounds to at least 2-mile buffers.In May, 2004, the U.S. Fish and Wildlife Serviceannounced that it would begin the process of studyingwhether the sage grouse should be categorized asan endangered species, which would bring it under theprotection of the Endangered Species Act, something conservationistshad been urging the Service to do since 2000.Questar and other gas, oil, and mining companies adamantlyopposed having the grouse listed as an endangeredspecies because once listed, the grouse would make largeareas of federal land off-limits to drilling, mining, and development.Since 80 percent of Wyoming is consideredsage grouse habitat, including much of the Pinedale Mesa,Questar’s drilling plans would be severely compromised.ETHICS AND THE ENVIRONMENT 299Questar and other companies formed a coalition—thePartnership for the West—to lobby the Bush administrationto keep the grouse off the endangered species list. Ledby Jim Sims, a former communications director for PresidentGeorge W. Bush’s Energy Task Force, the coalitionestablished a web site where th
ey called on members tolobby “key administration players in Washington” and to“unleash grass-roots opposition to a listing, thus providingsome cover to the political leadership at Department of Interiorand throughout the administration.” The coalitionalso suggested “funding scientific studies” that would bedesigned to show that the sage grouse was not endangered.According to Sims, the attempt to categorize the grouse asan endangered species was spearheaded by “environmentalextremists who have converged on the American Westin an effort to stop virtually all economic growth and development.They want to restrict business and industry atevery turn. They want to put our Western lands off-limitsto all of us.” 3 Dru Bower, vice president of the PetroleumAssociation of Wyoming, said, “[endangered species] listingsare not good for the oil and gas industry, so anythingwe can do to prevent a species from being listed is goodfor the industry. If the sage grouse is listed, it would havea dramatic effect on oil and gas development in the state ofWyoming.” 4The sage grouse was not the only species affectedby Questar’s drilling operations. The gas fields to whichQuestar wanted additional drilling rights was an area8 miles long and 3 miles wide, located on the northern endof the mesa. This property was located in the middle ofthe winter range used by mule deer and pronghorn antelope,some of which migrate to the mesa area from as far awayas the Grand Teton National Park, 170 miles to the north.Although the mesa was elevated and winters there wereharsh, it was much lower than the mountains where themule deer and pronghorn antelope lived in spring andsummer, and the mesa provided large fields of sagebrushthat fed the animals. Migration studies conducted between1998 and 2001 revealed that the pronghorn antelope herdsmake one of the longest annual migrations among NorthAmerican big game animals. The area around Pinedale islaced with migration corridors used by thousands of muledeer and pronghorn every fall as they make their way southto their winter grounds on the mesa and the Green RiverBasin. Traffic on Highway 191 which cuts across some ofthe migration corridors sometimes has to be stopped tolet bunched-up pronghorn herds pass. 5 Environmentalistsfeared that if the animals were prevented from reachingtheir winter ranges or if the winter ranges became inhospitable,the large herds would wither as the animals died off.Unfortunately, drilling operations create a great deal ofnoise and require the constant movement of many trucksand other large machines, all of which can severely impactanimals during the winter when they are already physicallystressed and vulnerable due to their low calorie intake.Some studies had suggested that even the mere presenceof humans disturbed the animals and led them to avoid anarea. Consequently, the BLM required Questar to cease alldrilling operations on the mesa each winter from November15 to May 1. In fact, to protect the animals the BLM prohibitedall persons, whether on foot or on automobile, fromventuring into the area during winter. The BLM, however,made an exception for Questar trucks and personnel whohad to continue to haul off liquid wastes from wells that hadalready been drilled and that continued to operate duringthe winter (the winter moratorium prohibited only drillingoperations, and completed wells were allowed to continueto pump gas throughout the year).Being forced to stop drilling operations during thewinter months was extremely frustrating and costly to Questar.Drilling crews had to be laid off at the beginning ofwinter, and new crews had to be hired and retrained everyspring. Every fall the company had to pack up several tonsof equipment, drilling rigs, and trucks and move them offthe mesa. Because of the seasonal interruption in its drillingschedule, the full development of its oil fields was projectedto take 18 years, much longer than the company wanted.In 2004, Questar submitted a proposal to the Bureauof Land Management. Questar proposed to invest in anew kind of drilling rig that allowed up to 16 wells to bedug from a single pad, instead of the traditional 1 or 2.The new technology (called directional drilling ) aimed thedrill underground at a slanted angle away from the pad,so that by placing wells around the perimeter of the pad,all at an underground slant leading away from the pad—like the outstretched tentacles on an octopus—multipledistant locations could be tapped by several wells branchingout from a single pad. This minimized the surface landoccupied by the wells: while traditional drilling required16 separate 2–4 acre pads to support 16 wells, the new“directional drilling” technology allowed a single pad tohold 16 wells. The technology also reduced the numberof required roadways and distribution pipes since a singleaccess road and pipe could now service the same numberof wells that traditionally required 16 different roads and16 different pipes. Questar also proposed that instead ofcarrying liquid wastes away from operating wells on noisytanker trucks, the company would build a second pipe systemthat would pump liquid wastes away automatically.These innovations, Questar pointed out, would substantiallyreduce any harmful impact that drilling and pumpinghad on the wildlife inhabiting the mesa. Using thenew technology for the additional 400 wells the companywanted to drill would require 61 pads instead of 150, andthe pads would occupy 533 acres instead of 1,474.The new directional drilling technology added about$500,000 to the cost of each well and required investingin several new drilling rigs. The added cost for the 400300 BUSINESS AND ITS EXTERNAL EXCHANGES: ECOLOGY AND CONSUMERSadditional wells Questar planned would total $185 million.Questar noted, however, that “the company anticipatesthat it can justify the extra cost if it can drill and completeall the wells on a pad in one continuous operation” thatcontinued through the winter. 6 If the company was allowedto drill continuously through the winter, it wouldbe able to finish drilling all its wells in 9 years instead of18, thereby almost doubling the company’s revenues fromthe project over those 9 years. This acceleration in its revenues,coupled with other savings resulting from putting16 wells on each pad, would enable it to justify the addedcosts of directional drilling. In short, the company wouldinvest in the new technology that reduced the impact onwildlife, but only if it was allowed to drill on the mesa duringthe winter months.In addition, Questar had requested that it be allowed toincrease the number of wells it was allowed to drill on themesa. By now, several other energy companies were tryingto get permission to drill on the mesa, including UltraResources, Shell, BP, Stone Energy, Newfield Exploration,Yates Petroleum, and Anschutz. Together, the companiesasked the BLM that they be allowed to drill an additional4,399 natural gas wells on the mesa. And all of them were alsorequesting they be allowed to drill through the winter.Although environmentalists welcomed Questar’s willingnessto invest in directional drilling, they strongly opposedallowing it or the other companies to operate on themesa during the winter when mule deer and antelope werethere foraging for food and struggling to survive. The UpperGreen River Valley Coalition, a coalition of environmentalgroups, issued a statement that read: “The company shouldbe lauded for using directional drilling, but technologicalimprovements should not come at the sacrifice of importantsafeguards for Wyomings’s wildlife heritage.”In order to allow Questar to test the feasability ofdirectional drilling and to study its effects on winteringdeer herds, the Bureau of Land Management decided tolet Questar drill wells at a single pad through the winterof 2002–2003 and again through the winter of 2003–2004.The Bureau would launch a 5-year study of the impactof the drilling which would continue until 2007 (laterextended beyond 2010). Questar was glad it was at leastbeing given the chance to show that drilling through thewinter was compatible with the wild
life living on the mesa.Two of the other companies, Shell and Ultra were also allowedto test winter drilling in 2005.Before the Bureau made a final decision aboutwhether it would approve the companies’ requests to drillthousands of additional wells and to drill them through thewinters, it had to again prepare an environmental impactstatement, this one called a “supplemental environmentalimpact statement” or SEIS. 7 The Bureau therefore begancollecting information about the impact of increasingthe number of wells and allowing year-round drilling. Its5-year study of the impact of winter drilling was expandedto include on-going monitoring of wildlife on the mesa.In a preliminary 2004 report on the results of its study,the Bureau of Land Management said that it had found“no conclusive data to indicate quantifiable, adverse effectsto deer” due to drilling. The Bureau was clearly anxiousto avoid the public dismay that it had created when it hadfirst opened up the mesa to drilling by Questar and it wastrying to be as open as possible. During the winter of2005 and the spring of 2006, the Bureau held several openmeetings at which the public was invited to comment onthe requests of Quesar and the other companies. In December,2006, the Bureau completed the first draft of itsenvironmental statement and released it to the public formore comments. Based on this additional input, a secondpreliminary draft was issued for public comment in December,2007 and the Bureau held additional public meetingson the second draft during early 2008.Finally, on September 12, 2008, the Bureau issued itsdecision on the requests of the drilling companies, alongwith the final draft of its environmental impact statement.Its decision assumed that future drilling would use the newdrilling technology Quesar had proposed. According tothe Bureau, it had studied the impact of five main alternativedecisions it could render: (1) continue to prohibit winterdrilling and allow no additional wells; (2) allow winterdrilling and allow 4,399 more wells on a maximum of 600drilling pads all located within a large “core area” in thecentral part of the mesa; (3) allow winter drilling and 4,399more wells on a maximum 600 pads plus : confine drillingto specific parts of the “core area” and prohibit drilling ordisturbance of any areas that were “crucial winter ranges”for mule deer and pronghorn antelope, or mating andnesting areas of the sage grouse; (4) allow winter drillingand 4,399 wells on 600 pads, confine drilling to parts ofthe core area, prohibit drilling or disturbance of winterranges of mule deer or pronghorn antelope or mating andnesting areas of sage grouse, plus: prohibit drilling on thethousands of acres (the “flank area”) surrounding the “corearea” where drilling was allowed, require annual review ofwildlife impacts, and require the companies to establish afund (with an initial contribution of $4.2 million and annualpayments of $7,500 per well) to monitor wildlife andto pay for the costs of mitigating any impacts on wildlifethat monitoring detected; (5) Allow drilling only withinthe “core area” and prohibit drilling in the area around theperiphery, but: permit fewer than 4,399 wells and less than600 pads and limit the total acreage devoted to wells.The BLM admitted that under all alternatives but(1), the deer and antelope “would continue to be adverselyaffected,” and “decreased habitat” would result for thesage grouse. Also “surface disturbance is expected to adverselyaffect migratory birds,” and sediment from drillingthat entered rivers could lead to “decreased reproductiveETHICS AND THE ENVIRONMENT 301success in spring-spawning native salmon species.” Nevertheless,the BLM decided to choose alternative (4), sayingthat it provided the best balance between protectingthe natural environment and allowing access to the naturalgas that was so valuable to the United States. In its officialstatement of its decision, the BLM added, in an important“appendix B,” that if the number of mule deer or antelopedeclined by 15 percent in any one year or from their levelsin 2005/2006, or if the number of sage grouse declinedby 30 percent in any two-year period, then the BLM wasrequired, and had the right, to take a number of “mitigationresponses.” Specifically, the BLM had to first try toexpand the habitat of the declining species by removing allhuman disturbances from the large “flank area” surroundingthe “core” and by enhancing these areas so they couldprovide additional habitat by, for example, planting moresagebrush and other edible vegetation. But if this did notwork, then the BLM could change where wells were allowedand how fast new wells could be added, as needed toprotect wildlife.Questar and the other companies were pleased withthe outcome. They had, essentially, gotten what they hadasked for, even if there were limits to where they coulddrill their wells. The companies quickly moved into the“core areas” and began building and drilling, and continuedthrough the winter of 2009. But on October 28, 2010,Western Ecosystems Technology, the group monitoringwildlife on the Pinedale Mesa, announced that in 2009mule deer on the mesa had declined by 60 percent comparedto their numbers in 2001, and by 28 percent compared totheir number in 2005. 8 The Western Ecosystem Technologystudy also found that in 2009 less than 70 percent ofadult female mule deer survived the winter on the mesa,compared to a normal survival rate of 85 percent. A representativeof Shell, one of the companies drilling onthe mesa, reacted by saying more research was needed:“Let’s see what the results are before we start reacting toomuch to what could be naturally caused variation.” Buta local Bureau official responded that since the declinein deer numbers had passed the threshold of 15 percent,“aggressive and positive action” on mitigation measureswas required.Questions1. What are the systemic, corporate, and individual issuesraised in this case?2. How should wildlife species like grouse or deer be valued,and how should that value be balanced againstthe economic interests of a society or of a companylike Questar? What principles or rules would youpropose we use to balance the value of wildlife speciesagainst economic interests?3. In light of the fact that natural gas reduces the U.S.’sundesirable dependence on foreign oil and the factthat natural gas produces less greenhouse gases thancoal, oil, and other fuels, should Questar continue itsdrilling operations? Does the environmental impactof Questar’s drilling operations imply that Questar ismorally obligated to stop drilling wells on the PinedaleMesa? Explain.4. What, if anything, should Questar and the other companiesbe doing differently?5. From an ethical point of view, was alternative (4) thebest option among those from which the BLM chose?Is another alternative better from an ethical point ofview? Explain your answer.6. Should the loss of species produced by the drillingoperations of Questar be considered a problemof pollution or a problem of conservation? Can theloss of species by evaluated as an “external cost”?Explain.

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