Cimarex Energy’s Scott Stinson (left) points out to Gov. Dave Freudenthal (right) different options for Cimerex’s helium plant.

Governor Visits Proposed Site For Helium Plant

by Trey Wilkinson

Gov. Dave Freudenthal flew into Big Piney Monday along with Wyoming State Treasurer Joe Meyer, State Auditor Rita Meyer, Secretary of State Max Maxfield and others for an onsite visit to Riley Ridge where a proposed helium plant awaits approval.

Members of Cimarex Energy Co., the company proposing the plant, Wyoming Game and Fish (G&F), private landowners and several consultants welcomed the group from Cheyenne, which also included State Lands and Investments Director Lynne Boomgaarden. Following a quick stop at Marbleton Town Hall the group drove to Riley Ridge to take a closer look at the proposed site for the plant as well as an alternative site.

History of Riley Ridge Unit

This particular project may be new; however, the Riley Ridge Unit is not. According to Ciramex Riley Ridge Madison Gas Development Project Manager Scott Stinson, the Riley Ridge Unit was formed in 1982 and discovery took place over 20 years prior.

“The field was discovered in 1961,” he said. “The existing wells were drilled between 1979 and 1983. Development was halted for an Environmental Impact Study (EIS) in 1983-1984. When the EIS was completed in 1984, approval was given to develop the unit with approximately 15 wells and piping the gas to a ‘Shute Creek’ type plant in Dry Basin, a few miles southwest of Big Piney. However, prices had dropped and the pipeline company was no longer willing to build the plant.”

So how did Cimarex become involved?

“Cimarex acquired its interest in the project in June 2005 with the purchase of Magnum Hunter (originally the Mesa Petroleum interest in the unit),” Stinson said. “The following year, we acquired the interests of the Williams in the project.”

According to Stinson, the project then became economically viable in September 2005 when an innovative “green” plant design was proposed that was substantially less expensive to build because it did not process the CO2 and H2S but separated them from the good gas and reinjected them back into the reservoir without significantly dropping their well pressure. In the fall of 2005, site selection work began with affected surface owners Dan Budd, Bill Milleg, Mark Milleg and Pam Hamilton.

In the summer of 2006, Cimarex and Jack Wold, operator and president of Riley Ridge LLC, worked over several of the existing wells to determine their condition as well as current reservoir pressure and gas composition.

In the summer of 2007, Cimarex reached agreement with Wold Oil Properties to turn over operations of the unit to Cimarex. In January 2008, the Bureau of Land Management (BLM) approved Cimarex as the unit operator.

Currently, Cimarex is waiting on BLM permits for various elements of the project.

“A complete project proposal has been presented to the BLM,” Stinson said. “They will be releasing a ‘scoping document’ in the next several weeks, detailing the project and the NEPA review will be included in this process.”

Permits from the Department of Environmental Quality (DEQ ) will also be required. Stinson said DEQ permits will likely involve local public hearings.

“If everything goes well, we hope to start on-site constructionin June 2009,” he said.

Landowner Bill Milleg, (left to right), Wyoming State Treasurer Joe Meyer and Cimarex Energy’s Project Manager Scott Stinson discuss options for the proposed helium plant located on Riley Ridge.

Helium plant site options

Cimarex originally considered approximately 10 sites for the helium plant.

“Our proposed site, selected primarily on safety and viewshed concerns, has been the primary site for over two years and is the only site that has the blessing of the surface owners in the area and the holder of the grazing rights on the state section,” Stinson said.

Landowner Dan Budd has the grazing rights for the state section and owns the surface rights for the three sections of land north, northwest and west of the plant site (including the primary alternative proposed by the G&F).

“Mr. Budd had given us an option to build the plant on this land and he stands to make substantially more money if we build the plant on his land,” Stinson said. “However, he voiced his opinion (at the on-site visit Monday) and at the hearing that he felt our proposed site was by far the best site for the plant.”

“We may not want all of this, but it’s going to happen,” Budd said Monday. “Let’s do it the best for the people that live here and pay the taxes here.”

Recently, G&F has become involved and concerned about the elk impact at the proposed site.

“The G&F has asked us to look at a total of four successive alternative sites,” Stinson said. “We have considered each of these sites but believe our proposed site to have significant benefits from the perspective of public safety, viewshed and other issues that we believe to outweigh a potential impact on elk. Numerous studies of elk in this project area document minimal impact on the elk herd. We do not argue that elk use the Riley Ridge area, just whether our presence will significantly and negatively impact them and that any impact can’t be mitigated.”

According to G&F Wildlife Management Coordinator Scott Smith, G&F has discussed alternate locations with Cimarex that would minimize wildlife impacts from the proposed gas sequestration plant. The alternative sites are located on BLM lands in the Reed Ridge area. “Cimarex Energy Co. rejected the alternate locations for various reasons – cost, production difficulties and environmental concerns,” Smith said.

Effect on elk

The Riley Ridge area is one of two native elk winter ranges remaining in the entire Piney Elk Herd unit. Mid-winter surveys conducted by the G&F for the past three years indicate on average, 198 elk have used this winter range complex.

Research from the University of Wyoming Cooperative Wildlife Unit master’s project (2000-2002) monitored elk distribution for three consecutive winters and documented elk use in the Riley Ridge and surrounding areas.

“Depending on snow depth, winter use can be significant around the proposed plant location,” Smith said.

During Monday’s visit, Gov. Freudenthal, Maxfield and Meyer each asked questions and expressed some concern on how elk may be affected by the proposed helium plant.

Freudenthal discussed the possibility of potentially pushing the elk down to private landowners. “I don’t want them there,” Bill Milleg said.

Smith said there is no way for G&F to predict which way the elk will travel from year to year but did address brucellosis issues.

“We will not let elk and cattle mingle,” he said. “We will avoid brucellosis issues.”

G&F Wildlife Biologist Gary Fralick addressed the elk issue with some of his past experience, as Fralick has flown over the area for the past 15 years.

“I usually get to look at this (elk movement) twice a year,” he said. “This year we watched 150 elk in December and there was movement continually through the winter. But the landowners probably see more than I do.”

Smith gave G&F’s synopsis.

“Based on our professional judgment, and past research evaluating elk response to human disturbances on winter ranges, there is a high probability that activity associated with this gas plant will displace these elk from native winter range,” he said. “If the elk seek out forage from nearby private lands, the G&F would be forced to either haze the animals from the conflict areas or establish emergency feeding operations.”

Smith discussed the cost of such an operation.

“Personnel costs to haze animals from conflict areas would be highly variable and difficult to project,” he said. “However, emergency feeding costs could be estimated based on data from the G&F elk feedground program. Operations costs for the closest elk feedground to the Riley Ridge area average $132 per elk over the last five years. Projecting displacement of 50 to 100 percent of the Riley Ridge elk to an emergency feeding operation, annual cost could range from $13,200 to $26,400.”

Pam Hamilton gave her two cents Monday saying there is a different variable at work as far as elk are concerned. “The wolves disperse the elk a lot more than the plant would,” she said.

Mitigation

On Monday, a number of the onsite visitors asked questions relating to mitigation. Stinson addressed mitigation options, including those for surface use, elk and air quality. “We have already worked with the affected surface owners to locate facilities, pipelines, power lines, roads, etc., to minimize negative impacts,” he said.

As for the elk, Stinson said Cimarex would be working with G&F.

“We have about eight different ideas of things we can do to help enhance the elk habitat in our project area or nearby,” he said. “We hope the G&F has additional ideas.”

Stinson said Cimarex is also working with the county commissioners and the DEQ to install an air-monitoring site that will fill a valuable gap in the regional air date answering the question, “What does the air blowing into the Green River Basin look like?”

Smith laid out the challenge in front of the G&F.

“The challenge facing G&F is how to balance the siting of the sequestration plant within important elk winter range and minimize impacts to this group of elk,” he said.

Where does the project go from here?

According to Stinson, public hearings will be held this summer in both Big Piney and Pinedale.

The final decision lies in the hands of the State Land Board (SLB). The SLB will determine, at a hearing Aug. 7, if Cimarex can have a lease to build the plant on its requested site within the state section or if the plant will need to be built on private land.

“The G&F will continue with dialogue between the local landowners, Cimarex representatives and the State Land Office,” Smith said. “There are several weeks remining before the Land Board meets to make a decision on this project.

Photo credits:  Trey Wilkinson, Trey Wilkinson