For Immediate Release: January 14, 2003 
Contact: Fred Richardson 512.809.9484 or Erin Rogers 512.740.3741

Sierra Asks Commissioner Patterson to Work With Club Towards Federal Buy-out of Padre-area Mineral Rights

Alternative to Drilling Would Provide Guaranteed Revenue to Permanent School Fund, Protect One of Texas’s Great National Parks

AUSTIN--The Lone Star Chapter of the Sierra Club is seeking a federal buy-out of certain oil and gas deposits in coastal waters near Padre Island National Seashore. A buy-out would provide guaranteed revenue to the Texas Permanent School Fund while protecting one of Texas’ best loved parks and critically endangered sea turtles.

"This is a win-win proposal for Texas school children, the turtles, and every Texan who loves Padre Island," said Fred Richardson, coordinator of the Lone Star Chapter’s Save Padre Island campaign. "We’d love to work with Commissioner Patterson to protect this great park and secure guaranteed revenue for the School Fund. We hope he’ll meet with us."

Since December the Lone Star Chapter has sought a meeting with Commissioner Patterson to discuss destructive gas drilling on Padre Island National Seashore and explore ways that the Sierra Club and the Land Office could work together on the problem. The Commissioner has not responded to the Lone Star Chapter’s overture, but the Chapter is hopeful that a meeting can still take place.

On Monday the Land Office issued a press release announcing that the State is seeking to fight the Lone Star Chapter in court on the question of whether the Department of the Interior took adequate steps to ensure the protection of the Kemp’s ridley turtle before permits were issued to BNP Petroleum to drill for gas from a surface location in the dune area of Padre Island National Seashore. The permit has been granted, and BNP will soon drive 18-wheeler trucks through beach nesting habitat for the turtle.

"We’d like a chance to explain to Commissioner Patterson why driving 18-wheelers right over the beach where the turtles nest isn’t such a great idea," said Richardson. "He’s an intelligent, rational man, and we hope he’ll be willing to visit with us."

When drilling companies lease coastal tracts from the Land Office, royalty payments are made to the Permanent School Fund. It appears to be the contention of Commissioner Patterson that BNP’s drilling from surface locations within the park to "bottom hole" locations (gas deposits) in the Gulf of Mexico will generate $100 million for the Permanent School Fund.

It is unclear how Commissioner Patterson produced this estimate, or whether any details were provided when his office issued the press release. The number of wells that BNP or other companies might drill from the park to offshore deposits appears to be limited.

Mineral rights directly below the park are privately held, and "bonus payments" on those leases are paid to private interests. That was the case with the Dunn-Murdock well, which BNP drilled in the spring of 2002.

BNP has also leased dozens of state tracts in the Laguna Madre, outside the nautical boundaries of the park. The School Fund benefits from those leases, but drilling would not occur from inside the park.

Drilling also occurs in waters on the Gulf coast side of the park. The State owns the mineral rights from the shore to 10.3 miles out to sea. Wells can be drilled in that area from ocean platforms, as they currently are, without impacting the park.

One area where drilling is problematic is the area between the park’s Gulf shoreline and the 3-mile nautical line. By agreement between the National Park Service and the State of Texas, no coastal leases will be granted for ocean platform drilling in that area. This sensible agreement is intended to protect the view from the Gulf beach. The Sierra Club urges Commissioner Patterson to abide by this agreement and has not objected to drilling beyond the 3-nautical mile line.

This spring BNP plans on drilling the "Lemon" and "Lemon Seed" wells, which have bottom hole locations under the Gulf, between the park’s shoreline and the 3-mile line. In order to avoid the NPS/GLO no-drill agreement, BNP is seeking to access gas deposits under the ocean by slant drilling from a land platform in the park behind the dunes.

It is unclear how many wells that fall within this narrow category might be drilled by BNP. The company will not make its intentions known, other than to say that it plans an "aggressive drilling campaign" in the area. The Lone Star Chapter would welcome access to the data that Commissioner Patterson used to generate his estimate.

It is worth asking what Commissioner Patterson’s assumptions are about the productivity of BNP’s prospective wells when he formulates his estimate. If BNP does not strike a rich gas deposit, or if the sloping geology of the area makes it difficult to produce gas, there could be little or no benefit to the School Fund beyond the initial bonus payments that BNP makes when it leases coastal tracts.

"By securing a federal buy-out of whatever gas lies within the no-drill area, Commissioner Patterson could guarantee a generous payment to the School Fund," said Richardson. "A buy-out would be like financial insurance for the School Fund, life insurance for the turtles, and would preserve an unspoiled piece of Texas for future generations. It’s win-win for everybody."

In 2002 the Bush Administration offered a $120 million buy-out of privately owned gas deposits under Big Cypress National Preserve in Florida. Since that time the Lone Star Chapter has sought a buy-out of the mineral rights below Padre National Seashore and certain mineral rights beneath Texas coastal waters adjacent to the park.

The Lone Star Chapter has sought to work with the Land Office to generate an estimate of the value of the State’s mineral rights in the area in order to determine the amount needed for a buy-out that would adequately compensate the Permanent School Fund for any possible lost income.

The Lone Star Chapter will be calling Commissioner Patterson again today to seek an appointment with him in hopes of seeking a solution that is best for Texas.

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