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CASPER - Several landowner and environmental groups are challenging a 2003 federal decision that opened the way for the coal-bed methane gas industry in northeast Wyoming's Powder River Basin.

The groups say the Bureau of Land Management failed to consider phased development when it decided to allow up to 51,000 oil and gas wells in the basin. They say the phased development might save agricultural operations, wildlife habitat and reduce the volume of groundwater discharged on the surface.

"Wise water use is critical to the economy and the quality of life in the West. We need to plan energy development in a way that conserves - rather than depletes - the West's invaluable water resources," Sharon Buccino, Land Program Director, Natural Resources Defense Council, said in a prepared statement.

Cheryl Sorenson, vice president of the Petroleum Association of Wyoming, said the BLM's environmental analysis and subsequent oversight of the development provides adequate protections.

"With the United States striving to become independent of foreign minerals it is crucial that federal lands continue to be open to oil and gas development to increase our nation's supply," Sorenson said.

Nearly 30,000 coal-bed methane gas wells have been drilled since the BLM's decision to allow the development.

The groups are appealing a federal court decision issued last November that affirmed the BLM's decision. The appeal was filed this week with the 10th U.S. Circuit Court of Appeals by Earthjustice on behalf of the Powder River Basin Resource Council, Wyoming Outdoor Council, Natural Resources Defense Council, and the Western Organization of Resource Councils.

Wyoming BLM spokesman Roger Alexander said the mismatched ownership pattern in the basin, and the geology of the coal seams targeted for methane extraction prevent a phased development strategy.

In fact, the industry tends to follow the geology of the coal resource from the shallow formations in the eastern side of the basin to the deeper coal formations to the West.

"So the BLM believes we do have phased development in the basin," Alexander said. "We own about 60 percent of mineral, and way less than that of the surface, so a mandated phased development would be impractical and insufficient."

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The environmental groups note that BLM's counterpart in Montana considered phased development for coal-bed methane on the Montana side of the basin. They argue that by not formally considering phased development in the EIS, the agency failed to adequately consider impacts to aquifers, groundwater, surface water, intermittent streams and wildlife habitat.

In fact, wildlife studies issued in 2007 cited the pace of coal-bed methane gas development in the basin was devastating sage grouse populations "over and above those of habitat loss caused by wildfire, sagebrush control, or conversion of sagebrush to pasture or cropland," they say.

"This is just one example of the need to 'do it right' whenever we undertake mineral development," Steve Jones, attorney for Wyoming Outdoor Council, said in a prepared statement.

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