Energy: Bittersweet Boom

A third-generation rancher on the windswept prairies of eastern Wyoming, Frank Eathorne doesn't have much time or use for complaining. But one day this spring, he drove 80 miles in his GMC truck with a BUSH-CHENEY bumper sticker to do just that. It wasn't that he minded the oil-and-gas boom currently flooding the state with jobs and royalties. The problem, he told a government panel in a hotel ballroom in Casper, is that the rush to drill in Wyoming is swiping the land right out from under its people.

"When my grandfather bought this place, he thought he owned it," Eathorne said. "He found out later he only owned the grass."

Like many landowners in the mineral-rich states of Wyoming, Colorado, Utah, New Mexico and Montana, Eathorne owns the rights to only the surface of his 32,000 acres; the Federal Government owns most of what lies beneath. Washington, increasingly eager to find domestic sources of energy, is leasing the subsurface rights of those so-called split estates at an unprecedented pace to energy companies. Wyoming's abundance of gas reserves makes it especially attractive. The state's citizens have lived through energy booms--and busts--before. But while oil and gas jobs came and went, the ranch remained. This time, ranchers say, the boom risks ruining the land that has always sustained them for the easy-come, easy-go riches below.

When the oilmen first called years ago, Eathorne, 66, never dreamed that the rolling grasslands his family has owned since 1944 would one day sprout 40 oil wells, 80 miles of pipeline and three railroad tracks. In recent years, he has set some house rules. In a "surface-use agreement," he stipulated that the workers leave their dogs at home so they wouldn't harass his 1,000 sheep and 500 head of cattle. But he and his wife had to build a new house on the far corner of the property to get away from the noise. They are paid for their troubles--$1,500 a month for damages and $400 a year in royalties for their fractional share of mineral rights. But the checks do little to restore Eathorne's sense of peace. "Until the oil companies came along, we thought it was our land," he says. "It wouldn't hurt my feelings if they just went away."

Eathorne's situation is a dark side of an oil boom that has otherwise re-energized the state's economy. Last year, as energy companies swarmed the state, Wyoming produced nearly double the natural gas it did 10 years ago. Even its production of oil, which had been ebbing, is expected to rise this year. More rigs are operating in Wyoming today than at any other time in the past 20 years, and revenue from mineral royalties and taxes topped $1.6 billion in 2005, pumping state budgets with cash. In Casper, the state's energy-industry hub, a 36-hole public golf course, a gleaming pool and river walks opened recently to serve its 50,000 residents. A new hospital and courthouse are under consideration.