BILLINGS, Mont. (AP) — Conservation groups that have lined up against oil extraction along southern Montana's Beartooth mountains sued a state oversight board on Wednesday after it approved an initial drilling permit without a public hearing.
The Northern Plains Resource Council and affiliated Carbon County Resource Council want a judge to void the drilling permit awarded last month to Energy Corporation of America.
The groups' attorney claims the state Board of Oil and Gas Conservation violated public participation requirements when it canceled a scheduled public hearing on the permit last month due to a technicality.
Board of Oil and Gas administrator Tom Richmond said he had not yet been served with a copy of the lawsuit and could not comment until it's been reviewed.
Denver-based ECA, which counts brewing magnate Peter Coors on its board of directors, has announced plans to develop dozens of wells near Roscoe and along the Clarks Fork of the Yellowstone River, an area that includes Belfry.
Skeptics of the company's plans warn that thousands more wells could follow with potential negative effects on water resources, air quality and the area's natural beauty.
They say ECA's plans could transform the area near Wyoming into the "next Bakken." That's a reference to the oil patch along the Montana-North Dakota border where a major drilling boom has resulted in the drastic transformation of once-quiet agricultural towns.
But Richmond said it's too soon to know if ECA's wildcat drilling operation will lead to major development. No other applications are pending to drill in the Mowry oil shale formation targeted by ECA, he said.
He said roughly one in nine exploratory wells find oil, and one in 20 has a chance of establishing commercial production, although the rate has been much higher in the Bakken.
"The assumption is if they (ECA) made a big discovery they would develop it. At this point, it's a wildcat well like any other wildcat well," Richmond said.
Wednesday's lawsuit was filed in state district court in Yellowstone County.