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Disturbing the peace 

Speculative drilling for gas could bring changes to the San Luis Valley

click to enlarge An orange sign marks where Lexam Explorations hopes - to put an access road to one of two test wells proposed - on the Baca National Wildlife Refuge. - ANTHONY LANE
  • Anthony Lane
  • An orange sign marks where Lexam Explorations hopes to put an access road to one of two test wells proposed on the Baca National Wildlife Refuge.

A September storm pushes mist through the dining tent at Choying Dzong, a Buddhist retreat center in Colorado's San Luis Valley. To ward off the chill, Jampa Stewart, nearly halfway through an 11-day spiritual marathon with two dozen other students, wears a hooded sweatshirt over his flowing maroon robe.

Stewart fills a plate with hot noodles and tofu, then sits at a table beside Hanne Strong, president of the foundation that oversees the assortment of temples and retreat centers that have taken root near the once-sleepy town of Crestone, fewer than 100 miles southwest of Colorado Springs.

"Is it true?" Stewart asks Strong, his voice at once urgent and serene. He sketches details of a proposal he learned about a day earlier: An energy company wants to drill test wells on the Baca National Wildlife Refuge, just west of the retreat center. If they find gas, a wave of development could alter the whole valley.

Strong, whose role transforming Crestone into an outpost for world religions gives her a sort of celebrity status in certain circles, laughs mysteriously as she agrees with Stewart.

Yes, that is the plan.

"I can't believe they would have so little awareness," Stewart says, shaking his head.

Choying Dzong is nestled in pine trees where the Sangre de Cristo Mountains erupt from the flat expanse of the San Luis Valley. Snowmelt and rain water from the Sangres flow above and below ground toward the 80,000-acre Baca refuge, joining there with water from the north and west to charge aquifers used in the valley. The federal government bought the refuge in 2004 for about $31 million, in part to protect the valley from threats to siphon away that water and also to save vast wetlands where migratory birds rear their young.

At the time, nobody seemed too worried about a small Canadian company called Lexam Explorations that owned subsurface rights to the Baca. Other oil and gas wells drilled in the San Luis Valley turned out to be relative duds, and early seismic maps of the valley's underground layers showed few signs that anything more tempting lurked below.

But last winter, Lexam conducted three-dimensional tests of rock layers under the Baca refuge, posting excited updates for investors on its Web site about natural gas that could be found there. In April, the Colorado Oil and Gas Conservation Commission granted Lexam permission to drill two test wells on the refuge to depths of 14,000 feet. An ongoing environmental assessment will determine whether more study is needed before the wells are drilled, but most people expect work to begin this winter.

A significant finding of gas deposits could mean hundreds or thousands more wells on the refuge, and possibly a nearby plant to clean the stuff before it is sent on to heat homes and fuel power plants.

The prospect of such development is chilling to Stewart, an acupuncturist from Austin, Texas, who has been studying Buddhism for almost 40 years. He attended his first retreat at Crestone in 2002, and he and his wife bought land near the Choying Dzong retreat center in 2006 with plans to move there.

For 11 days in September, Stewart and other students meditated and chanted while contemplating Vajrakilaya, the "ever-youthful, indestructible one" who is a symbol of enlightenment with the power to dispel disease and obstacles. They split up the task of uttering a mantra to Vajrakilaya night and day for the length of the retreat.

Stewart speaks of a "natural energy" he feels in Crestone.

"It's a rare place of natural beauty and peace," he says. "It's getting harder and harder to find places like that."

Life at the refuge

It takes Ron Garcia about nine hours to patrol the network of roads and jeep tracks crisscrossing the Baca refuge. In an ideal week, Garcia says, he will drive most of those roads at least once.

Garcia is one of 12 year-round U.S. Fish and Wildlife Service employees responsible for maintaining the three wildlife refuges in the San Luis Valley, and he is currently the only certified law enforcement officer among them. On a Monday, he might quickly patrol the smaller Alamosa and Monte Vista reserves before heading up to the Baca, which sits about 45 miles to the north and covers more than three times the combined area of the other two reserves.

On the way to his office at the refuge's north end, Garcia might take an extra two hours bumping up roads on the former ranch's west edge, looking for cut barbed wire, tire tracks or other signs of illegal access to the government land. Once he arrives at the old ranch house that serves as his home for much of the week, Garcia faces tasks ranging from mundane to profound: maintenance work, phone calls, biological inventories, management plans. The Baca refuge rivals the size of Great Sand Dunes National Park, which shares much of its eastern border, but the team managing the government's investment is skeletal at best.

"I'm it," says Garcia, the refuge manager. "To date, there is no funding identified for this refuge. Everything is at the expense of Alamosa and Monte Vista."

Garcia has a degree in field biology and 18 years experience working for the Fish and Wildlife Service. He speaks with the calm, assured voice of someone who is used to working alone, but he becomes animated talking about the refuge and its wetlands.

A good snowpack kept the wetlands particularly damp this summer, he says, triggering an "explosion" of insects and tadpole shrimp. Sora rails, Wilson's phalaropes, cinnamon teals and other birds feasted and multiplied.

"In the summer, we try to stay out and let the birds do their thing," Garcia explains.

The refuge was a working ranch for more than a century, and Garcia says he is cautious about changing the way it is managed until he understands how human activities have affected the wildlife. Some fields are still hayed each fall; others are grazed.

Human activities are limited, since the goal of the Fish and Wildlife Service is to preserve habitat for plants and animals. While wildlife observation, photography and even hunting and fishing are allowed at refuges where those activities pass certain "compatibility filters," Garcia says such things are not feasible at the Baca.

"With one person, there's no way I could open this to the public," he says.

Gas development on the refuge is a different matter.

"Compatibility doesn't apply to it," he says. "If we owned the mineral rights ... and somebody came and said, "Hey, we'd like to drill for oil and gas' that means building roads, building pads then I'm sure that would fall out of compatibility. But we don't have the ability to say that because we don't have the ability to say "no.'"

To minimize impact, Garcia told Lexam to conduct its seismic tests in the winter, when the ground was frozen and wildlife scarce. Such tests rely on a device or explosive to rattle the earth, then a series of sensors to time the return of shock waves bounced off underground layers. Garcia told Lexam it could not use dynamite or "thumper trucks" on the refuge. He asked the company to lay out lines of sensors on foot or using ATVs. He also required "diapers" to catch any leaks from trucks allowed on the refuge, and oversized tires to reduce impact on the ground.

Driving a service road on the refuge in September, Garcia stops at an orange sign marking the point where Lexam plans to build an access road to drill one of its two test wells.

Oil and gas development is a reality at many refuges, Garcia says. If drilling is done right, the refuge can still prosper, and Lexam has been willing so far to abide any restrictions on exploration that Garcia has suggested.

Nothing is decided about what will happen if Lexam finds gas down below, Garcia says.

"If they determine there's something down there worth pursuing, and they want to go into production, then it's a whole new ballgame," he says. "We start from ground zero again."

Baca's history

click to enlarge Ron Garcia has only seasonal help as he manages the - Baca refuge. - ANTHONY LANE
  • Anthony Lane
  • Ron Garcia has only seasonal help as he manages the Baca refuge.

Dispute, deceit and controversy have long been attached to the 100,000-acre plot of land known as the Luis Maria Baca Grant No. 4. The U.S. government awarded it to the Baca family in the 1800s, after the Bacas complained that land granted to them by Spain had been overrun by residents of Las Vegas, N.M.

The Baca Grant passed through the hands of different ranchers for decades, and eventually a developer tried carving out thousands of home lots on the eastern edge of the property, marketing them as retirement estates.

According to local lore, roads were spray-painted black for aerial shots in marketing materials, and fake utilities boxes were set up to encourage investment.

Then as now, properties were slow to sell. Maurice Strong, a Canadian businessman known globally in terms ranging from glowing to sinister, gained a controlling interest in the property. He and his then-fiance Hanne visited the area in the late 1970s. They started the Manitou Foundation and began granting some of the land on the property's east edge to religious groups.

The bulk of the land remained the Baca Ranch, and residents across the valley cried loudly when Strong and business partners came up with a plan to export water from its underground aquifers to the Front Range.

The water plans went dry, but the spiritual communities took root. Eric Karlstrom, a professor of geography at California State University, Stanislaus, says those groups drew him to the area. He bought three Baca lots in the early 1990s and built a home there in 2000. He now spends summers there and semesters when he takes sabbatical.

"We have a brilliant community," he says, describing the diverse interests, backgrounds and skills of neighbors who have gathered in recent months to discuss and debate the different pressures facing the region.

A planned northern access road to Great Sand Dunes National Park ranked as a more pressing issue in August 2006. The Sonoran Institute, a Tucson-based nonprofit, was brought in to facilitate discussions about picking the best route for the road.

At one of those meetings, someone mentioned a "rumor" about Lexam's plans to drill on the refuge, recalls Karlstrom, who holds a doctorate in geography. Organizers promptly arranged a follow-up session devoted solely to that topic.

According to an agenda from the meeting, speakers talked about Lexam's ownership of subsurface rights and options for responding. Peggy Utesch spoke about her then-recent struggle against drilling as energy companies swooped into western Colorado's Garfield County.

"Four year lesson is that anger won't win the day," a summary from the session says. "Found that you win more when you're not an adversary."

After the meeting, Karlstrom and neighbors organized what became the Water Watch Alliance, coming up with best practices for negotiations with Lexam.

The process now strikes Karlstrom as fishy.

"We learn about it as we're working on another issue. We're told we can't win," he says. "I think we were played. ... We were funneled into a response that was to cooperate rather than resist."

Karlstrom is familiar with conspiracy theories. His personal Web site links to papers in which he argues the Sept. 11 attacks were an "inside job." In another paper, he argues members of the Bush family encouraged and profited from both world wars as well as conflict in Afghanistan and Iraq.

The current President Bush, according to Karlstrom, is linked to proposed drilling on the Baca refuge through executive order 13212, which directed federal agencies to "expedite energy-related projects." Since the order was signed in 2001, permits for oil and gas wells have surged in Colorado from 1,319 in 2001 to 5,904 in 2006. They should break 6,000 this year.

The increase in drilling could have other explanations, most notably the increase in natural gas prices that has made ever-smaller pockets of the fuel seem appealing to energy companies. But Karlstrom questions other aspects of activity on the Baca. The Fish and Wildlife Service said the proposed drilling was not subject to the National Environment Protection Act, and thus would not require an environmental assessment or a more rigorous environmental impact statement. The agency, finally relenting when faced with a lawsuit from a local environmental group, opened an assessment process with a 30-day public comment period that ended Sept. 17.

click to enlarge Eric Karlstrom, a professor with a Ph.D. in geography, - fears the Baca refuge could become a national sacrifice - zone if gas exploration goes forward.
  • Eric Karlstrom, a professor with a Ph.D. in geography, fears the Baca refuge could become a national sacrifice zone if gas exploration goes forward.

Despite having managed the Baca refuge for two years, the Fish and Wildlife Service still has not completed a management plan for the land or inventoried all the species found there. That would be strange, Karlstrom suggests, "unless you intended that land to be part of your energy colony, national sacrifice."

Lexam officials have said the chances of finding a significant amount of natural gas under the Baca refuge are between 5 and 15 percent. The low probability has some residents believing Lexam will soon be leaving for good, he says, but there's a new rumor circulating that the company's latest seismic tests indicate a much better chance of hitting it big.

"As soon as they hit it, they're going to have a shitload of wells out there," Karlstrom says. "It's going to change the valley."

The Fish and Wildlife Service's public comment period requested letters to help determine the range of concerns and judge whether a lengthy, expensive environmental impact statement will be needed. Residents reached out to local and national environmental groups as well as to Colorado College, which has a San Luis campus next to the Baca refuge. Students sent dozens of letters expressing concern about the drilling, and thousands more poured in from across the country.

The comments numbered nearly 50,000, according to the Fish and Wildlife Service, many of them form letters opposing the drilling.

Lexam is paying for a company to evaluate the comments and write the assessment, which will basically rule whether more investigation is needed. Karlstrom is skeptical it will slow the drilling.

"It's probably a done deal," he says.

Lexam's mission

An image posted on Lexam's Web site earlier this year showed the San Luis Valley sitting between large and profitable oil and gas formations, with the Denver Basin to the northeast and the San Juan Basin to the southwest.

"Surrounded by monsters," the caption read.

Few expected a similar beast could be hiding under the rubble that makes up the floor of the San Luis Valley. A well needs three main things to have any hope of gushing gas or oil. The first is a source rock buried at sufficient depth so the remains of ancient plants and animals will be baked into fossil fuels. The second is a reservoir of absorbent rock to hold that fuel, and finally an impervious layer must be positioned to trap the fuel in one place.

The few wells that have been drilled in the San Luis Valley have done poorly, and maps of the area's underground layers never gave much hope for new wells.

The picture started to change in the early 1990s when an earlier incarnation of Lexam drilled two holes in search of gold on the valley's east edge. The company found none of the glittery stuff, but stumbled instead on layers of Cretaceous rock showing signs of fossil fuels.

The findings did not mark a "Eureka!" moment; the wells did not have the right combination of reservoir rocks and traps that would allow fuels to accumulate. But speculators became interested in looking for those conditions nearby.

Lexam did two-dimensional seismic tests in the mid-'90s to find possible underground traps. New maps of the subsurface showed two spots where gas might have accumulated. An east prospect sits in the heart of the Baca refuge, and a larger prospect extends from its western edge.

The company's financial reports since those tests document steady expenditures, few profits and the distant prospect of piping a trillion cubic feet of natural gas out from those rocks. That amount now could fetch about $6 billion. If extracted all at once, it could fuel the United States for two or three weeks.

At some point, Lexam attracted the attention of ConocoPhillips, which owns a quarter of the Baca project's mineral rights. This winter, the company completed three-dimensional seismic testing, which presumably clarified the underground picture for its geologists. The tests "confirmed earlier 2D derived targets," according to a company press release, and indicated new prospects that could be explored later.

click to enlarge The temple at Choying Dzong is a focal point for - students who go on retreats at the Buddhist center.
  • The temple at Choying Dzong is a focal point for students who go on retreats at the Buddhist center.

The two proposed test wells aim for structural traps each about 400 acres in size, the press release says. Company officials did not return phone calls to say how they currently rate their chances of finding gas.

Rob McEwen, Lexam's chairman and chief executive, is known in the mining industry for leading the Canadian gold-mining company Goldcorp as its value surged from millions to billions. A photo on his personal Web site shows him sitting on a pile of gold bricks.

In September 2005, according to a Lexam news release, McEwen paid about $400,000 Canadian to buy nearly 19 million shares of Lexam, giving him control of 50.1 percent of the company.

Strongs' influence

Hanne Strong came to Crestone in the 1970s with her then-fianc Maurice, a global businessman and diplomat sometimes called the "godfather of the international environmental movement," in part for his role as secretary-general of the 1992 United Nations Earth Summit in Rio de Janeiro.

Not all published commentary on Maurice Strong is kind. Some have compared him to Machiavelli and Rasputin, suggesting he plays a sly role in international affairs while hoping to overthrow governments of industrialized nations.

Global politics aside, a $12 million land deal for the Baca Ranch brought the Strongs to Crestone, Hanne Strong says. Maurice saw the land as an investment, but both were struck by the region's beauty.

One day, a local guru and spiritual teacher told them his vision of what the area could become, Strong says.

"He said, "I've been waiting for you to arrive,'" Hanne Strong says. "He told me I would facilitate bringing together the world religions here."

In subsequent years, the Strongs granted property for Buddhists, Carmelite Catholics and other groups to build more than a dozen retreat centers and monasteries. The religious entities thrived, but Maurice Strong's business plans soured, Hanne Strong says. He and his business partners lost millions on the failed plan to sell water from the ranch's aquifers and develop the area.

The lesson, Hanne Strong says, is that it's foolish to bring such plans to a valley long recognized by the Hopi and other Native Americans as sacred.

"Whoever comes in here trying to make money off this place loses their shirt," Strong says. "It's a holy place."

Strong speaks with a Danish accent that carries hints of the years she has lived in the United States, China and other countries. She peppers many explanations of the valley's history or world events with an ironic laugh, talking in a way that indicates no clear lines between facts, beliefs and the mystical world.

The prospect of gas drilling only miles from the religious centers is chilling, she says. It would threaten the serenity and atmosphere that have allowed the communities to grow.

"This valley would be a big industrial park where you couldn't breathe the air; you couldn't drink the water," she says. "It would be a catastrophe."

Lexam faces unexpected challenges if it hopes to remove gas from the valley, Strong says, describing "protectors" who will not tolerate it to be harmed.

"[Lexam representatives] are going to be out of here with their tail between their legs," she says. "It's a money-losing project."

Crestone's concerns

Being mayor of Crestone, Kizzen Laki insists, is no big deal.

"It's like being valedictorian in a class of 10," she says.

Laki has been the elected head of Crestone for 10 years, during which time the town has grown from roughly 80 residents to about 130. The adjacent Baca Grande subdivision, meanwhile, has swelled to more than 1,000 residents.

She moved to the town in 1983 to be part of what she calls a "conscious community." In 1989 she launched the Crestone Eagle, a monthly newspaper providing local news and advice about low-impact living.

In 1997, she started living "off the grid" in a solar home. Like many residents in Crestone and Baca Grande, she says the idea of drilling on the refuge is disturbing.

"Our local economy is pretty much based on its natural beauty and quiet," she says. "Having to pass through a gas field before you get here is very incompatible with what Crestone is about."

Laki remembers a battle in the '90s when a company called AWDI tried to start pumping away water from the Baca Ranch. The whole valley voted for a tax to protect the aquifers. When the federal government purchased the refuge years later, many thought the water would remain safe for good.

"It would be ironic to preserve the underground reservoir, only to have it polluted," she says.

Another troubling aspect of the drilling: No one has yet identified all wildlife species on the refuge. Without that information, she says, it will be tricky to ever say with any certainty whether damage was done.

Martha Schmidt, for her part, is convinced any long-term drilling activity could only detract from the abundance of wildlife living on the refuge now. She and her husband are finishing work on their home in Baca Grande, only about a mile from the refuge. Like Laki, they will use solar panels for their electricity.

In the mornings, Schmidt watches elk romp through the fields outside. A blue harrier nests nearby.

The animals were nowhere to be seen when Lexam conducted its seismic tests, rolling little "armored cars" across the refuge, Schmidt says. The vibrations shook her house at some points during the testing, which lasted for a period of weeks.

The harrier came back, Schmidt says, but she wonders whether that would happen with prolonged drilling activity nearby.

People might also leave. Lisa Cyriaks, who has written extensively for the Crestone Eagle about Lexam's plans, fears the religious centers might pack up and move.

The ties that allowed Crestone and Baca Grande residents to create a unique outpost on the edge of a harsh, high mountain valley could begin to dissolve.

"It's an intentional community [built] around this idea of sustainability," Cyriaks explains. "This could blow the whole experiment."

lane@csindy.com

  • Speculative drilling for gas could bring changes to the San Luis Valley

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