The Southern Utah Wilderness Alliance is countering charges by Questar Gas Co. that the high price of natural gas is the result of "misguided environmental opposition."
In recent billing statements sent to its customers, the Salt Lake-based utility included a letter pinning the high prices, in part, on environmentalists, saying that the nation has chosen to leave large amounts of natural gas resources off limits to development and production.
Stephen Bloch, a staff attorney for SUWA, said that is not the case.
"We're not going to stand by and allow Questar to have this type of scapegoat propaganda campaign," Bloch said Monday. "And we're not going to allow them to send these mailers to a captive audience claiming, with no support, that environmental opposition is the reason why Utahns are paying high prices for natural gas."
Bloch cited a 2003 Interior Department report that said 88 percent of the Rocky Mountain region's "technically recoverable" natural gas located on federal lands is available for leasing and development.
"The industry is holding thousands of already approved permits in their pocket," Bloch said. "And the reason for not being able to drill these has nothing to do with environmental opposition and has everything to do with a shortage of drill rigs and a shortage of workers."
Chad Jones, a spokesman for Questar Gas, agrees that there are many areas in the U.S. where natural gas is technically recoverable, but he said that does not mean it is economically recoverable.
"What makes them less economical to recover are all the restrictions," Jones said, pointing to a 20-page flowchart that shows the lengthy process for obtaining approval to drill an oil or natural gas well.
"I think our customers would be amazed at the number of boxes there are on the flowchart that we go through to get a well approved. There are hundreds of them," Jones said. "Every one of those boxes represents incremental costs to the end-use customer."
Jones said about 188 trillion cubic feet of natural gas in the Rockies are closed to development or available with restrictions.
In 2005, Questar raised its rates 38 percent. Last week, the utility asked for an 8 percent rate reduction to go into effect Feb. 1.
Bloch said that of the 5,077 approved drilling permits in Utah from 2001-2005, just five were challenged by SUWA.
Don Banks, spokesman for the Bureau of Land Management's state office in Salt Lake City, said of the 23 million acres of BLM surface lands in Utah, roughly 4 million acres is under lease.
Of leased BLM lands in Utah, only a small fraction, less than 1 percent, is developed with drill pads, pipelines, roads and storage tanks. Banks said there are approximately 5,500 producible wells in Utah located on BLM lands.
The state, Banks said, has a backlog of 700 to 800 pending applications for drilling permits.
"There has been a dramatic increase over the last three years in the number of permit-applications that have come in," Banks said. "It is a problem. Demand has outstripped capacity. The good news is that the Energy Policy Act is giving us some additional help."
Banks said the law has established new pilot offices across the nation, specifically designed to address the nation's backlog of permits. The BLM's Vernal office, he said, will see an additional 17 new positions created.
Duane Zavadil, vice president of government and regulatory affairs for Bill Barrett Corp., an oil and natural gas exploration company that is drilling in Utah's Nine Mile Canyon, said environmental opposition and bureaucratic delays add $2 to $5 per 1,000 cubic feet of natural gas sold.
"Those are the things that have driven natural gas prices from $1.50 five years ago to $10 now," Zavadil said. "On a cumulative basis, it's incredible the impact that those things have on investment."
Adding to high natural gas prices is increasing demand. In 1987, amendments to the federal Powerplant and Industrial Fuel Use Act removed restrictions on the use of natural gas in power generation. Today natural gas is the fuel used for about 19 percent of U.S. electric power generation. More than 90 percent of power plants built in the last five years are powered with natural gas, according to the American Petroleum Institute, which forecasts U.S. natural gas usage to increase by about 40 percent by 2025.
Whatever the reasons for skyrocketing energy prices, Glenn Bailey of Crossroads Urban Center, which operates the busiest food pantry in the state, said this remains a tough winter for low-income people."I would like to call on Questar and the industry to do more to figure out a way to stabilize prices so that people don't face these drastic increases," Bailey said. "Casting aspersions on the environmental community really doesn't solve the problem."