Merger tells us it's time to regulate methane industry

Frontiersman editorial board

When all the shouting about coal-bed methane development in the Valley began, one of the consistent arguments from the pro-development camp was that the company holding the sub-surface leases was an upstanding, good corporate neighbor. "Evergreen Resources Inc. does it right," they told us, "and that's why we're lucky that they own the leases."

Some people wondered what would happen if somebody else came along and bought up some leases -- or what might happen if Evergreen was bought out by another company, or merged with another company. In a meeting in his office last year, Sen. Scott Ogan said he was bullish on Evergreen because they set the standard for safe and clean methane extraction. He said that if any company with lesser standards tried to buy sub-surface leases here, he'd fight it to the bitter end. At that time, Ogan wasn't so bullish on drafting regulatory legislation for CBM development. He felt regulating an industry before it was operational was premature. His underlying reassurance was that, even without stringent regulation, we could trust Evergreen to do the right thing.

With little more than a few test wells in the most highly contentious areas, some people in the Valley might be tempted to say, "I told you so." Evergreen has announced its intention to merge with international gas development giant Pioneer Natural Resources Company out of Dallas. After more than a year of wrangling with Evergreen, the entire debate could shift gears with a whole new set of parameters.

It's too soon to say whether the merger would represent a step forward, backward or no change at all for CBM development in the Valley. We don't know how Pioneer's processes stack up against Evergreen's, and we don't know what the company's relationship has been with other communities. All we can say for sure at this point is that there's a new player in the CBM debate, and that we know the methane development business is a volatile one in which changes like this are more the rule than the exception.

This is the best example so far to support the notion that we need to set standards of regulation for CBM now, before serious development begins. It is naive to rely upon the industry to regulate itself, and we now know first-hand that developers can change without warning. Why not establish a benchmark for the industry that will encourage responsible developers and deter irresponsible ones? If our legislators are working for us, that's what they'll do.