In 2005 the U.S. Bureau of Land Management offered up thousands of acres of federal land in Colorado to drilling. Because the land was in the heart of an area that supplies drinking water to 55,000 people in the western part of the state, the plan drew stong opposition from local communities.
The concerns they raised -- that the disruption and chemicals used in drilling might ruin their water -- foreshadowed similar concerns that have since rippled across the country as drilling operations expand from Wyoming to New York. And their solution may be a lesson that ripples to those communities as well.
The communities -- the city of Grand Junction and the neighboring town of Palisade -- began by making their concerns clear: drilling is important, but protecting the water supply is paramount.
"Our feeling all along was that you shouldn't drill in our watershed. It's the last resort," said Tim Sarmo, the town manager for Palisade, who, together with the city of Grand Junction, fought the development. "Shouldn't someone say these are areas of higher priority, greater vulnerability?"
Their concerns focused on the chemicals pumped underground by drillers in hydraulic fracturing and then disposed of in the area's dozens of open waste pits -- fears echoed in upstate New York, where the Marcellus Shale underlies the watershed supplying New York City's 9 million residents, and in other parts of the country where gas is being drilled.
At first, Grand Junction and Palisade tried to buy the mineral rights themselves. In early 2006 they bid more than $300 an acre at auction -- eight times what gas companies were typically paying for mineral leases in that part of the state at the time -- but were outbid by Genesis Gas and Oil.
Then they tried a different tack: If drilling had to go forward, they wanted to define the terms, making sure the safest techniques would be used to protect the quality of their water. In this case, they wanted measures more stringent than what state regulations required.
With BLM officials arbitrating -- the agency made a goodwill agreement a condition of the leasing and permitting process -- the municipalities and Genesis Gas and Oil spent the next two years negotiating a compromise that could now stand as a model for towns across the country.
The result is a 60-page Watershed Plan (PDF) that dictates that Genesis will only use "green" hydraulic fracturing fluids, will reveal the chemical makeup of those fluids and will inject a tracer along with those fluids so any alleged contamination in the area can be quickly linked to its source.
Though the agreement has yet to be tested -- Genesis has not yet applied for permits to drill in the area -- local representatives found that there was more opportunity for them to steer oversight of drilling, and reach beyond what state regulations require, than they had thought.
Genesis Oil and Gas did not respond to requests for comment.
"There wasn't a lot of resistance," said Greg Trainor, the Grand Junction utilities director who sought the concessions from Genesis and says they put him at ease with the drilling. "It may not be a legally binding agreement, but it's a political agreement. It's a very good template."