Lead Into Black Gold?

District 7 City Councilor John Eagleton, who championed a proposal adopted by the council on Jan. 14 that lifts the city's 104-year moratorium on oil and gas drilling, laughed long and hard when asked the next day how long he thought it would be before the measure attracted any interest from exploration companies.

"I had lunch today with (a local oilman), and he asked about the status of the proposal," Eagleton said. "When I told him it passed last night, his exact words to me were, 'Do you have Mayor (Dewey) Bartlett's phone number?' "

Eagleton, who said the measure is long overdue, led the fight to get the moratorium lifted partly as a response to the city's budget crisis, which has led to layoffs, furloughs and reduced services in virtually every department.

Supporters of the ordinance believe the city--which is the mineral rights holder on a good deal of property that is expected to attract the interest of exploration companies--eventually could generate a revenue stream from possible drilling activity that would help ease its money problems.

Eagleton said the moratorium on drilling inside city limits that was adopted in 1906 was well advised. In those days, he said, drilling activity was toxic, and many wells literally were explosive.

But throughout the past century, that has changed, he said. He described the drilling business now as environmentally friendly and compatible with city life. He believes that the regulations included in the ordinance, which allows drilling on public and private land, will safeguard Tulsans against the kind of environmental abuses that frequently went hand in hand with the industry in the past.

"If I did not believe that, I would not have supported it," he said. "No one will have a well in their backyard against their wishes."

Mike Terry--president of the Oklahoma Independent Petroleum Association, an Oklahoma City-based organization that serves as the state's largest oil and gas advocacy group--said he thinks the lifting of the moratorium represents a certain logic.

"Tulsa is the former oil capital of the world," he said. "I think it's fitting they're allowing drilling again."

Bartlett, who serves as president of Tulsa's Keener Oil & Gas Company, also lauded the passage of the measure.

"It's certainly not something that I think will give a lot of money to the city, but it will certainly generate some," he said. "In these times, every little bit helps tremendously."

Bartlett said the lifting of the moratorium could begin to generate new funds as soon as deals can be negotiated.

"Where the city should receive money initially is if anybody has the desire to consider drilling, they would approach the city and negotiate an oil and gas lease," he said. "That in itself would give the city some income. And if the drilling is successful, royalties would also be negotiated. Obviously, we, as a city, hope that whatever drilling that occurs is successful, and we will do whatever we can to encourage that activity."

Eagleton said the measure's impact in the short term is likely to be negligible, and he declined to speculate about what kind of revenue it would generate during the long haul, since that depends on the untapped reserves remaining under the city.

"And that's anyone's guess," he said.

But he is optimistic that something positive will emerge from the process.

"The oilies that I have spoken to light up like a Christmas tree when confronted with the possibility of drilling in Tulsa. There is significant interest," he said, adding that he has heard estimates that it could be anywhere from six to 18 months before the first drill bit is sunk into the ground.

Bartlett, too, is confident the new opportunity to drill in Tulsa will attract some takers.

"There's a limited amount (of interest), but there will be some," he said. "I'm sure of that."

Oil and Water

Still, not everyone is embracing the idea, including City Councilor Jim Mautino, who fears the impact drilling activity would have on the quality of life for many residents of his district.

"I'm not willing to expose the citizens in District 6 to that," he said. "There's an awful lot of open land there, and I wouldn't like it if someone wanted to drill in my backyard."

Mautino said he would prefer to see the council and mayor deal with some of the more pressing issues the city faces right now instead of dealing with a measure lifting a century-old moratorium.

"Right now, I think it's a bad thing to do because we're trying to go into the budget and get things figured out," he said. "We need to start making our city departments run more efficiently and not waste so much money.

"We are not getting our streets fixed," he continued. "Nobody's even talking about that."

Larry Shepard, group chairman for the Sierra Club's Green Country chapter, said his group voted to oppose the lifting of the moratorium.

"The Green Country Group of Sierra Club is opposed to permitting oil or gas drilling within the City of Tulsa limits because of degradation of the city's urban environment and quality of life," Shepard wrote in an e-mail outlining his group's position. "Problems associated with such drilling include the potential for air pollution; contamination of aquifers, water tables and drinking water by chemicals used in well fracturing; toxic chemicals associated with drilling; clean-up issues associated with oil well production sites, and disposal problems related to drilling fluids, fracturing fluids and contaminated subsurface water."

But District 2 City Councilor Rick Westcott, another supporter of the measure, believes the regulations that are included in the ordinance will be enough to address those environmental concerns.

"There are plenty of safeguards in place to protect the home owners or property owners," he said. "I think it's a potential revenue stream not just for the city of Tulsa but for whoever owns the mineral rights under a piece of property."

In addition to the safeguards the city of Tulsa has mandated, Westcott said any potential drilling activity in the city would be closely monitored and regulated by the state Corporation Commission.

"They've had 100 years to get the legal requirements correct," he said. "With those protections in place, I think this is a very safe activity."

Bartlett also credited the Corporation Commission with turning the tide in regard to environmental abuses on the part of the industry.

"Much of the activity around Tulsa occurred prior to that period," he said, adding that the lack of regulation too often resulted in a mess. "I assume that's why (the moratorium was adopted in the first place)."

Terry said much has changed in the drilling business since Tulsa outlawed the practice in the early days of the 20th century.

"It's just a different world than it was a hundred years ago," he said. "We drill in the ocean now, in the Alaskan tundra and in other environmentally sensitive areas. There's no reason it can't be done in the city of Tulsa."

Bartlett said the area around Tulsa has produced significant quantities of oil and gas in the past, though he acknowledged there seems to be a prevailing sentiment among many people in the industry that the region is now marginal or depleted. Bartlett said he didn't necessarily agree with that assessment, pointing to new extraction technologies that make previously disregarded areas viable.

"Generally, in this area of Oklahoma, these zones don't produce at a high rate, but they can produce for a pretty long period of time," he said. "If we and the exploration company are both lucky, we both can have a long-term source of income."

Bartlett, Eagleton and Westcott all described the notion of lifting the moratorium as an outside-the-box idea, and they stressed the importance of that kind of thinking as the city continues to try to balance its budget in the face of declining sales tax revenue.

"It is. It's very creative," Westcott said of the idea, adding that it originated with a citizens committee chaired by Bartlett that was convened two years ago to develop ideas about how to repair the city's streets. "Councilor Eagleton deserves most of the credit for picking up the ball and running with it. But it is creative thinking, and we need more of it."

Terry pointed out that Oklahoma City, which long has allowed drilling within its city limits, was able to renovate its Will Rogers World Airport a few years ago with revenue gleaned solely from oil and gas exploration activity.

Bartlett said the city has no choice but to explore alternative strategies as it tries to ease its reliance on sales tax receipts for most of its funding.

"It's up to us to be more competitive and aggressive and grab a hold of that dollar first," he said.

Eagleton recounted that the first dozen times or so he presented the idea of allowing drilling in the city to other elected officials, the response he got was scoffs and smirks.

Now, he's the one with a grin on his face.

"Asymmetrical thinking is what makes brilliant ideas work," he said, citing Post-it brand notes, the light bulb and the auto assembly line as other ideas that initially were regarded as goofy. "If you come up with an asymmetrical idea, stay after it."