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 Jan 31 - Feb 6, 2008 
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News Feature

Drilling Albuquerque

Our future in the oil patch?

By Jim Scarantino
Rex Barron

A Texas company that stirred controversy with plans to produce oil near Santa Fe has been exploring for natural gas on Albuquerque’s Southwest Mesa. Tecton Energy of Houston won’t say what it’s found after six months of exploration. But the company is punching more wells into the ground to pursue its hunch that the area holds valuable quantities of natural gas.

According to President Bill Dirks, Tecton has “taken a significant lease position” in Bernalillo County. The company obtained mineral rights to about 50,000 acres owned by SunCal, which were bought last year from Westland Development Company. That land comprised the holdings of the former Atrisco Land Grant. As part of SunCal’s deal, Atrisco Gas and Oil LLC was formed to handle mineral rights. A significant gas strike could mean big money to be distributed among Westland shareholders and Atrisco Land Grant heirs.

Tecton “entered an existing well bore drilled by Burlington Resources in 1997,” says Dirks. “The test results are highly confidential.” Dirks declined The Alibi’s request to visit the site “because of what might be revealed, and we’re not ready for that yet.”

Tecton also leased extensive mineral rights in Sandoval and Valencia counties and is not alone in thinking central New Mexico holds valuable hydrocarbon resources. “I have received unsolicited calls from other companies asking to compare notes,” says Dirks.

The Rio Grande Rift

Thirty-five million years ago, tectonic activity left a rift running from Colorado into Chihuahua. The Rio Grande follows its course into Texas. Deep in the rift lie basins formed 65 million to 144 million years ago during the Cretaceous and earlier periods in the earth’s history. Many of these basins house oil and gas.

Central New Mexico has seen hydrocarbon exploration sporadically over the last century. Drilling occurred in the Galisteo Basin as early as 1918. Oil and gas have been found in wells drilled east of Española and southwest of Santa Fe, though never in significant volumes.

About 46 test wells have been drilled in the Albuquerque Basin, an area between the Sandia and Manzano Mountains on the East, the Rio Puerco on the West, and the Jemez Mountains and Socorro to the north and south.

Based on seismic studies and limited drill logs, petroleum geologist C.M. Molenaar in a 1988 monogram was still able to conclude that the Albuquerque Basin “has the potential for large amounts of hydrocarbons, probably gas.” Molenaar reached his conclusion without the benefit of whatever information has persuaded Tecton to drill more wells on the Southwest Mesa.

“Let Your Children Get Cancer!”

Tecton knew it could expect controversy by looking for oil near Santa Fe. “Without tooting our horn,” says Dirks, “we did our homework. We spent months meeting with state and county government officials. The initial reception we received was quite favorable. Most people expressed some amount of support and/or curiosity. We didn’t encounter anyone who said ‘No! And go away forever!’ ”

Dirks says the company worked closely with the county to figure out the best way to introduce the project to the public, which resulted in two public meetings at the end of 2007 in Santa Fe County. "At those meetings we began to get a new perspective on how vigorously this would be opposed.”

Tecton’s plans in the Galisteo Basin have met with what energy consultant and former Green Party gubernatorial candidate David Bacon calls “an unprecedented level of activism.” Bacon, like other Tecton opponents, talks of the “destruction” and “gutting” of Santa Fe, damage to groundwater and a profound change in quality of life. A coalition of organizations and businesses opposed to Tecton’s plans is growing rapidly. Activists want the county to tighten oil and gas regulations. In response to the outcry, Gov. Bill Richardson announced a six-month moratorium on new oil and gas drilling in Santa Fe County and the Galisteo Basin on Friday, Jan. 25.

Overflow crowds attended town hall meetings, which lasted for hours. Dirks explained Tecton’s proposal to tap an estimated 50 million to 100 million barrels of recoverable sweet, light crude. That is a significant amount, Dirks explained at the last meeting, “because there aren’t many places onshore or offshore in the U.S. to find oil like that.” Members of the crowd shouted back, “We don’t want your oil!” Dirks predicted substantial tax revenues for Santa Fe County and New Mexico. “We don’t want your money!” the crowd responded. As a sign of the anger in the room, one man roared at Dirks, “Let your children get cancer! Let your wife get cancer! Let you get cancer!”

Dirks says Tecton representatives have been through at least one controversial project. “It’s part of the challenge we face every day in the oil and gas industry. But you don’t expect comments about you and your family getting cancer. That starts to wear on you.”

Bargaining

Tecton offered to use closed systems rather than open pits, to not drill at night, to limit drills to the smallest possible area, to mitigate noise and to take other measures to protect the environment. Dirks says Tecton’s Galisteo Basin operation will be unprecedented in combining “multiple numbers of these approaches at the same place at the same time.”

Drilling opponents don’t trust Tecton. They point to decades of oil and gas operations that caused environmental harm in the San Juan and Permian Basins and conflicts with ranchers and other surface owners.

“Guilty as charged,” says Bob Gallagher, President of the New Mexico Oil and Gas Association. “We are paying for the sins of the past. But you can’t run that way today.” As examples of “how to do it right,” he points to Farmington, where natural gas is produced next to an elementary school and golfers walk on greens once occupied by drills.

Tecton’s announcement, if it comes, may be warmly welcomed by the 6,000 Westland shareholders and the 50,000 Atrisco Land Grant heirs who will profit from its operations.

How long does Tecton expect to conduct exploration and production activities here? “The opportunities in New Mexico are very large, not just in the Rio Grande rift” says Dirks. “We specifically set up Tecton so that we would be doing business here for years.”

 
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