Biotech energy company threatens suit against Wyoming BLM

2012-05-31T00:00:00Z Biotech energy company threatens suit against Wyoming BLMBy MARTIN KIDSTON mkidston@billingsgazette.com The Billings Gazette

CODY, Wyo. — A company looking to produce natural gas using biotechnology is accusing the Bureau of Land Management of stonewalling its permit in what it believes is an effort to kill its project.

The BLM says the company simply hasn’t paid the additional recovery fees needed to process the permit and that the agency has not denied the project.

Luca Technologies CEO Bob Cavner said Tuesday his company is preparing a lawsuit against the BLM and plans to take the issue to Washington, D.C., in an effort resolve a problem he says cannot be fixed in Wyoming.

“We’re going to right this wrong,” Cavner said. “We think the BLM was disingenuous with us, dishonest with us, and has continually moved the goalpost on us.”

Cavner said Luca is looking to produce natural gas in the Powder River Basin using a process known biogenic production, which uses microbes to digest coal and produce methane gas.

Cavner said his company has been using the technology for roughly nine years and has worked in the Powder River Basin since 2006. Luca began the permitting process with the BLM about three years ago, he said.

“We’ve been negotiating with the BLM for three years and we came to an agreement short of a year ago on the process itself,” Cavner said. “We came to a permitting process they approved and a monitor plan they approved.”

Cavner said Luca, based in Golden, Colo., filed its application for well restoration nine months ago and documented the procedures it developed jointly with the BLM. He said the company also paid the agency $40,000 to process the application and necessary permits.

He said the BLM was to issue the permit by November but the company has yet to receive it. He also said the BLM has requested an additional $40,000 in fees to continue working on the permit.

“Up until two weeks ago, we believed we were close to getting approval when the BLM demanded a new well monitoring program that had never been discussed,” Cavner said. “We estimate that program will cost an additional $30 million, which is more than the value of the project.”

Mary Wilson, spokeswoman for the BLM state office in Cheyenne, said the BLM never placed a dollar figure on the well monitoring program. Wilson said the new program was to be included in the range of alternatives the BLM writes into any plan.

She said the BLM didn’t suspend the application process over the well monitoring issue, but rather, because of Luca’s failure to pay the fees.

“We rejected the application because they had not paid the cost recovery fees that were due,” Wilson said. “We use that money to fund our activities. It’s not like a savings account.”

Wilson said the agency requested the additional fees to continue working on the permit and addressing any further needs or changes to ensure the project was done correctly. She said the BLM asked for the additional fees on April 11 and again on May 9.

“We rejected the application on May 18 because we didn’t get the cost reimbursement fees,” Wilson said. “From our perspective, we’ll take the application back up again if the cost recovery fees are paid. We can’t do any more work until they pay those fees.”

Cavner said Luca represents something unfamiliar to the BLM. He says the agency doesn’t know how to fluidly deal with the company’s permit since it’s accustomed to dealing with coal mines and not biogenic methane enhancement.

“This is one of the largest coal resources in the country,” Cavner said. “This is a great resource for us to sustainably produce natural gas without drilling and without destroying out ground water.

“But we don’t fit into the BLM’s normal box because I’m not a coal mine. The BLM is not accustomed to this type of strategy. We’re gearing up for battle.”

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