|Joe Large Sun Times photo by Darryl L. Fliwers|
By Darryl L. Flowers
Now the office serves as the western Montana office of RPM Geologic, a firm that specializes in helping oil companies find their targets when drilling miles below the earth’s surface.
Part of RPM Consulting, RPM Geologic is headed by Joe Large, a geologist who ended up in Montana courtesy of the US Air Force. After completing his stint with the Air Force, Joe earned his geology degree at Virginia Tech.
Joe has long been intrigued with the potential for gas development along the Rocky Mountain Front. “Science and history make it obvious that there is a gas deposit under the Eastern Slope of the Rockies.”
As evidence, Joe cites the enormous success a few miles over the Canadian border, at the Pincher Creek, Waterton, and Lookout Butte fields. “For almost a century, there has been a steady stream of research that shows the geology of the Canadian gas fields continues along the Rockies.” Joe adds, “When you examine a map of development along the Front, from Canada to the United States’ southern border, you can see gas and oil production spread along the entire length. Except Montana”
Joe and his colleagues at RPM believe they have found the sweet spot, the Sidney Longwell Federal Oil and Gas lease near East Glacier. RPM has agreed to develop the lease. “We met with Mr. Longwell, and quickly came to an agreement.”
Reached at his home in Baton Rouge, Louisiana, Mr. Longwell told the Sun Times, “We are looking forward to working with everyone to resolve the problems and start development of the lease.”
RPM will drill and develop the lease. “RPM Consulting has been doing turn-key oil and gas wells for several years,” said Large. “Now we want to expand, we want to build on our expertise and move into exploration and production.” As a turn-key firm that oil companies use to plan and drill wells, RPM has a history of bringing wells online under budget and on time. “We can pull in the best talent, can stay focused and make sure the operation moves smoothly.” He adds that when drilling close to sensitive areas, being able to complete the job in an efficient manner is key. “The less time you spend drilling, the less impact you have on the surface area.”
In the opinion of the RPM management, the gas potential under the Longwell lease is only part of the attraction. The location offers onsite access to a pipeline network for distribution. Situated on the lease, in an area designated as a “utility and transportation corridor” by the U.S. Forest Service, are two natural gas transmission lines operated by NorthWestern Energy. Running some distance from Highway 2 is the original “Kalispell” gas line and the newer, larger “Lewis and Clark Loop”. The Lewis and Clark Loop line splits form the older line east of the lease property and runs along the older line for seven miles before it rejoins the original pipe. Also running over the lease is the Burlington Northern Railroad.
“Here we have a set of major natural gas transmission lines, enabling us to tap in and send Montana produced energy across the state, and we also have the nation’s major railroad on the lease… a railroad that is pursuing natural gas as a source of energy for their locomotives… clean energy, ready distribution and access to markets. We fell like we’ve hit a home run.”
Joe’s optimism is borne out in comments made by the late Doug Strickland, a Petroleum Geologist whose work led to the discovery of the Covenant Field in central Utah. AAPG (American Association of Petroleum Geologists) Explorer reported, in 2011, on Strickland’s optimism about development in Glacier County: “Strickland grew excited about the possibility of a major gas field lurking to the west of the new Bakken play. “I’ve been working in this part of Montana for 25 years. One of the largest prospects I believe I’ve ever mapped is in the western portion of the Blackfeet Reservation,” he said.
He described a trend that started in Canada and extended south into the Glacier mountain front.
“Across the border, there are three major fields within six miles of the United States,” he said. “There’s a swath in there that looks very prospective.”
“There is a resource play out there, and companies like resource plays. They’ve
mostly ignored the thrustbelt,” Strickland said, commenting on the industry’s lack of interest in the Glacier mountain front. “Companies have been leery of the risk and the exploration costs,” he noted. “Northwest Montana is very remote.”
A geologist with insight into the complexities of thrustbelt exploration, Strickland felt the Montana mountain front held important and overlooked potential. “It’s very difficult for people to understand the geometry of the thrusting, much less what the prospect looks like,” Strickland said.
“What’s neat about this area is that you’re just six miles from word-class production – it’s six miles across the border,” he added.
The Longwell lease is only a few miles from the Reservation’s western border, in the heart of the overthrust belt.
The history of commercial oil exploration in Montana began not far from the Longwell lease, near Kinta Lake. The first sale of natural gas in Montana was recorded in the area where Lake Sherburne is now. Says Large, “We are building on a long history of exploration and research of well documented oil and gas exploration in Montana, both by the government as well as the industry. People such as Mel Mudge developed geological maps of the region that are still being studied today, and well respected Great Falls petroleum geologist Bill Hansen who conducts annual field schools of the region, we are building on a huge body of research in this project.”
An exploratory well on the lease was approved in the 1980’s. Repeated attempts to stop the drilling failed until politics intervened and the well was put into suspension. That three decade suspension is what has landed the Forest Service and Mr. Longwell in Federal Court.
Joe Large thinks the plan RPM has may quiet a lot of the criticism from the anti development organizations. “What drives most of the complaints, though unfounded, about oil and gas drilling is hydraulic fracturing and, to a lesser degree, horizontal drilling over great distances. Our plan for this site makes those worries moot.” According to Large, the deep formations they expect to drill are naturally fractured, broken up by the same forces that created the Rockies. “Based on the study of wells drilled in the area, and to the north in Canada, the target zone of production is naturally fractured, allowing the natural gas to migrate to the well bore.” The wells will be drilled vertically, and while there may be some short “lateral” legs, they most likely will not exceed 1,000 feet in length. “It’s an overthrust region and with the jumbled nature of the rocks miles below the earth, if you extend a long lateral you run the risk of ruining the well.”
According to Large, in researching comments regarding plans to drill on the lease, he noticed that a great deal of worry was expressed over the use of “reserve pits,” open pits, lined with a heavy material, that act as storage for water used in the drilling process. “We will use a closed system. There will not be a reserve pit, so that is another concern we are addressing.”
If the lease proves capable of gas production, the long term visual effect will be minimal. Gas wells do not require a pumpjack, the large machinery found on many oil wells. Instead a pipe comes out of the ground with a valve assembly, the gas is piped to a gathering station located at a suitable spot where it would tie in with transmission lines.
Large told the Sun Times that, according to available reports, some of the wells in Canada can, at current prices, produce gas at a value of $75,000 per day. “Imagine what that would mean for the citizens of Glacier County. For the schools and other county operations. The burden it would take off the shoulders of the taxpayers in Montana.” Twelve percent of the sales from production on a federal lease is collected in taxes. Half of that would flow to the state of Montana, with roughly half of that going to the county in which the production occurred.
Could 1942 Court Case Result In Faster Development?
In its research into the Longwell lease, as well as other leases being held up by politicians and activists, the Sun Times discovered that Mr. Longwell’s lease, as mentioned earlier, runs under the railroad. Sidney Longwell owns the oil and gas that lies beneath the Burlington Northern tracks. He also owns the oil and gas under Highway 2, under the NorthWestern Energy gas lines, under the Qwest Communications lines… under any of the rights of way that cross his lease. And his rights to develop those minerals are affirmed by at least two decisions from the highest court in the land. In the landmark case, Great Northern Railway Company v. U. S., 315 U.S. 262 (1942), the United States Supreme Court ruled that the surface occupant of a right of way across federal lands did not have claim, unless otherwise specified, to the subsurface minerals.
The case holds particular significance to Mr. Longwell’s lease since the Great Northern case came out of the same area.
In the Great Northern case, the railroad had made plans to develop three oil wells along the right of way. For years, lower courts had been ruling that the railroads could only use the right of way surface. Great Northern, according to the Supreme Court decision, “asserted that it proposed to drill three separate oil wells-the oil from the first to be sold commercially, that from the second to be refined, the more volatile parts to be sold and the residue to be used on petitioner’s [Great Northern] locomotives, and that from the third to be used in its entirety by petitioner as fuel.”
The wells were to be located in Township 29 North, Range 15 West and Township 32 North, Range 24 East. But the court ruled against the railroad, saying that the federal government would retain the oil and gas so that those could be sold to another party.
The Great Northern case was reaffirmed in 1957 when the same issue came before the United States Supreme Court in the case United States v. Union Pacific R. Co., 353 U.S. 112.
The Great Northern case was cited in a more recent case, Marvin Brandt v. United States. The Brandt case was argued before the U.S. Supreme Court earlier this month by attorney Steve Lechner, with Mountain States Legal Foundation. Mountain States is representing Sidney Longwell in his litigation against the U.S. Forest Service before the district court in Washington, DC.
The Great Northern ruling could provide a means by which RPM could bypass the issue of surface occupancy that is being used to hold up the drilling. “We may be able to locate a drilling rig on these rights of way and move forward with our wells,” said Large.
Drilling on, or near, the rights of way would put the wells squarely into the corridor as defined by the Forest Service in their Finding of No Significant Impact (FONSI) from 2004 when the agency approved the Lewis and Clark Loop pipeline. Large says that the FONSI documents are of vital importance in the current process of seeking approval to move forward. “In their findings related to the pipeline, the Forest Service made determinations that seem to contradict what they are saying now about Mr. Longwell’s lease, those findings involve a pipeline that travels across the lease for bout two miles.”
When asked what he thought the chances were of drilling a successful well on the lease, Large responded, “Ninety percent… maybe more.” Challenged on that high degree of confidence, Large cited other wells drilled in the area: the Morning Gun, Kiyo and Two Medicine. “Just about every one of those wells had good gas or oil shows, but at the time getting gas to market was impossible and gas was selling for about $0.07 per thousand cubic feet, when the Morning Gun well was drilled. Today, with transmission line access and a decent price, those wells would be productive.”
Near the lease boundary, at Lubec, at least one gas well was drilled around 1905. The well, drilled by the Spokane Petroleum Company, was located near the railroad tracks at Lubec. Montana newspapers eagerly carried news of the well, with one article in the Anaconda Standard reporting that “gas had been flowing undiminished for days.” The report went on to say that the light from the burning gas would light the trains up as they passed by. The well was slightly over 1,000 feet deep.