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Posts published in “Day: December 7, 2018”

Too eager


You can’t read thoughts, but you do have to wonder if someone at Alta Mesa is thinking this:

We didn’t think they’d respond this way, because on the front end they gave us no reason to think they would.

Cast your memory back to early in this millennium and the enthusiastic response from many people in Idaho, and so many state officials, to the prospect of serious oil and gas production in Idaho.

For decades oil and gas development in Idaho was slight, and even now it’s not enormous; modest in size and largely limited to one corner of the state. But it got serious in 2005 when a private firm began leasing mineral rights in the Payette County and the nearby area, and started exploration wells, which showed enough promise to warrant continued research.

The big player has been Alta Mesa Company, a Texas-based organization whose spokesman in 2014 referred to Idaho’s “very friendly climate and environment for doing the work.” That same year Governor C.L. “Butch” Otter called the prospect of more drilling “very exciting.” During a tour of the facilities he also said, “This is a long-term investment that will not only benefit the companies doing it but also the state of Idaho.” (The next year Otter was rated at a perfect 100 percent by the Independent Petroleum Association of America.)

With all that in mind, Idaho’s laws on oil and gas drilling were changed several times in the last decade, and the commission governing oil and gas spun off from its old role as an alter ego of the state land board and into a free-standing commission. The Idaho severance tax rate is especially low, and the royalty rate is the same as oil-friendly Alaska’s. What’s not for an oil or gas company to like?

Moving forward to late 2018, the picture surrounding Idaho gas and oil extraction looks a little different.

In late November, Idaho regulators settled with Alta Mesa, which now has hundreds of oil and gas leases in southwestern Idaho, on a variety of issues.

A few samples show the tenor. In September the state required Alta Mesa to pay overdue royalties and provide other required information. It followed up weeks later with another warning that if the materials weren’t provided by late January, the state “may terminate the leases and begin eviction proceedings.” In October the state sent a violation notice to Alta Mesa for failing to get state approval for working on a well. Also that month, the state subpoenaed the company for other records.

This is the same state government that only a few years earlier went out of its way to encourage the development.

These issues seemed to reach a settlement by the end of November. But the state is far from alone in its concerns about the development.

Back in August a federal district judge held that, as one news story put it, “Idaho officials violated the U.S. Constitution by forcing several landowners to sell their natural gas and oil to a Texas company without giving them a meaningful way to fight the state’s decision.”

And yes, there have been landowner protests which have begun to change the political climate surrounding their activities.

Economic developments no less than political are Newtonian: For every action, an equal and opposite reaction. Sometimes they take awhile to develop, but eventually develop they do.