Gas company trying to put down roots in North Fork

“We’re going to be here for a long time”

A low whistle droned from a small metal shed at one end of a well pad on the 2,400-acre Rock Creek Ranch in the foothills of the Raggeds, 10 miles north of Paonia Reservoir. “That’s what the bosses call the sound of money,” said SG Interests I Ltd. operations land manager Eric Sanford with a slight smile. Just about everything around us related to the expanding gas development was under his watch.

That whistling sound was natural gas rushing to a wellhead under pressure. It has the same ring to the landowners, who own almost 19,000 surface acres overlying the Bull Mountain Unit and sign surface use agreements with companies that pay to put well pads and pipelines across their property. And it rings for the governments that cash the company’s severance and tax checks, including Gunnison County.
But in communities where natural gas development has run headlong into opposition from concerned citizens and advocacy groups in the face of unanswered questions about the environmental consequences of development, that whistling sound has also been a call to arms. And despite the rally against it, the industry, backed by federal and state laws, is growing while it moves ahead.
Rock Creek Ranch I Ltd. is a nearly 2,400-acre spread owned by Russell Gordy, who made his fortune in oil.
He is now principal owner of SG Interests, which has staked a large claim in the North Fork Valley, where as much as 10 trillion cubic feet of gas is said to be trapped in coal and shale formations.
Getting that much gas will take time. According to the Bureau of Land Management, which manages the majority of mineral rights in the unit, any individual well in the Bull Mountain Unit might operate for 30 years and it could take 20 years to develop the entire field, putting gas companies like SG on the land for the next half-century.
Consequently, the company is making itself at home, Sanford says, by taking over the Rock Creek ranch house for a field office and cleaning up the property and roads wherever possible.
Next door to Rock Creek is the Falcon Seaboard Ranch, owned by Texas Lieutenant Governor David Dewhurst, who founded an energy and investments company in Houston with the Falcon Seaboard name in 1981. Now Dewhurst is considered by many to be the wealthiest man in Texas politics.
“We do view corridor studies, so he doesn’t have to see anything from his cabin,” Sanford said, pointing out that a new pipeline would cross the Falcon Seaboard property. “We do that for a lot of landowners and not because it’s required by any regulation.”
For the most part, SG’s other neighbors are descendants of ranch families that have been in the North Fork for a hundred years, like Joe Sperry or Dixie Luke and her two brothers. Others have been around a shorter time but don’t plan on going anywhere.
Sanford says of the relationship, “We’re going to be here for a long time. The ranchers aren’t going anywhere. Even though we’ve got a right to [develop the gas], it doesn’t make my life any easier when landowners don’t trust us.”
So, he says, the company works hard to make sure the development also gives the ranches something they want: improved roads or fences, cattle guards, and planting grass in re-vegetated areas instead of sage.
From the top of a hill we can see a commercial lodge where SG puts its crews when they’re in town, keeping the beds full through otherwise slow times, while a pump running on a crude methane-compatible engine clangs in the background. If the pump were in a residential area, Sanford said, it would be quieter.
Asked about the potential for wells and pads being developed in close proximity to peoples’ homes, Sanford blamed those kinds of situations on “publicly traded, multi-national companies,” whose only concern is the bottom line.
“SG Interests is a family owned business, owned by a billionaire, yeah. But on my first day at work he told me, ‘Eric, the only thing that can ruin me is an environmental disaster. Don’t let that happen.’”
Sanford, who has been working for SG Interests for three years, is slight of build and one of the youngest people in the company’s public entourage. As he says, he’s one of the only vegans you’re likely to meet in the oil and gas industry. His bosses call him a hippie and pick on his white sunglasses.
Prior to working for SG, Sanford was an attorney in several capacities throughout the southwestern part of Colorado and he’s used to being disliked. Once, while in court, a client spat on him.
So the reaction to his presence from people opposed to the natural gas industry who see him in public meetings, or at the natural foods store in Paonia picking up a vegetarian lunch, isn’t unnatural. Sanford doesn’t see himself, like some people do, as someone who helps a billionaire rape the land and spoil the water and air down-current. For him, natural gas is the future of the domestic energy supply and he’s helping to usher in a new era.
At the start of a recent tour of the Bull Mountain Unit for members of the media, Sanford pointed out a sign for the West Elk Scenic Byway. Across the highway is the Jacobs 29-1 well, with a small wellhead and several 12-foot green condensate tanks instead of the 20-foot-tall standard, set up on a ledge above the road. Driving by, you might never notice it.
Sanford says the height was restricted by regulations that go along with building next to a Scenic Byway, but SG would have built them to blend in anyway. Not every well pad looks like that, but not every one needs to.
Sanford described the McIntyre 11-90-14 #1 well, as “what a typical well would look like.” The wellhead itself doesn’t look like much, just a heavy pipe that comes out of the ground and then, after a few feet, goes back in. Since the gas comes out of the well under pressure, there’s no sound from equipment running.
Sanford said it cost $3 million to $5 million just to get the well in the ground, and the ground shows the scars of that effort. The surrounding hillside had been cut away to level the site, but was already green with grass. If the well ever slowed its production and needed to be re-stimulated, with another round of hydraulic fracturing, the earth around the well pad would be pushed back; otherwise the site is mostly ready to handle the equipment to do the job.
In 2008, SG submitted a proposal to the BLM to develop as many as 60 separate well pads in the Bull Mountain Unit, with a total of 150 wells drilled. With directional drilling technology, Sanford says, some wells will go horizontally for 3,000 feet in any direction. Two new wells are currently being planned and when they’re done next year, only a fraction of the unit will have been developed.
After a well is drilled, produced water comes to the surface. A couple of derricks bob on the horizon, clearing water out of the way so gas can get to the wellhead. This could take months or years and sometimes the water seems to flow forever, Sanford said. But eventually the flow from most wells will turn to gas.
With the water comes hydrocarbons and other volatile organic compounds (VOCs). Looking up at the pipes venting the condensate tanks at the well head, you can see the distortion of light that comes through the fumes, like heat rising from a road.
Aside from what happens underground, VOC emissions are something the environmental community is watching and is concerned about, since several VOCs have been linked to effects on human health.
Sanford says the gas being produced in the North Fork Valley is relatively clean and doesn’t bring a lot of VOCs to the surface with it. In an email, he added, “To this point, regulated emissions in the Bull Mountain Unit…have not risen to the level that would require a state air quality permit.”
But after all of the dirty work is done, the vented VOCs and a sprawling network of roads, pads and pipelines are all that’s left of the development.
The pipelines that feed gas from the growing number of well pads to the Bull Mountain Pipeline, two years after going in the ground, are covered in knee-high grass and stand out as wide, light green lines down sage-speckled hillsides. Another is being installed.
 For now, the pipelines extend far beyond the lines of well pads, waiting for what will come.