Oil-drilling moves to forefront for state’s new minerals chief

A lightly read book detailing the environmental effects of hydraulic fracturing lays on one corner of Richard Perry’s desk at the Nevada Division of Minerals offices in Carson City.

Expect that book to be well-thumbed over the next few months as Perry’s department creates a new standard for fracking in the state. Perry is the division’s newly hired administrator and succeeds Alan Coyner, who headed the Division of Minerals for 15 years before stepping down in September.

The division and the Nevada Department of Environment Regulation have been charged by the state legislature to develop a program for regulating hydraulic fracturing in the state, prompted by Noble Energy’s plans to drill for oil in the Tabor Flats area west of Wells. The Division of Minerals is responsible for permitting oil, gas and geothermal exploration activity in the state, while Department of Environmental Regulation oversees permitting activity for the mining industry.

“It’s something new that has come in. There is some public concern about this, and how do we ensure that waters of the state are not impacted and provide disclosure of what chemicals are being used and inform the public,” Perry says.

The Division of Minerals isn’t starting from scratch with its regulation efforts. It’s tapping the expertise of administrators in states with a long history of oil and gas drilling using hydraulic fracturing methods, and Perry also recently joined the Interstate Oil and Gas Compact Commission, where he can draw information to help formulate the manner in which Nevada will regulate the fracking industry.

Though it’s a small player in the oil industry, Nevada has a long history of oil production. The state produces just under 400,000 barrels a year from 111 wells located primarily in Nye, Eureka and Elko counties. By comparison, oil-rich states such as Texas and North Dakota produce as much as a million barrels of oil each day, Perry says.

Noble Energy of Houston hopes to change that. Noble holds claims on 350,000 acres and has begun drilling the first of up to 20 exploration wells as deep as two miles below the earth. It will use fracking to extract oil.

In layman’s terms, fracking is the process of pumping highly pressurized water mixed with other fluids into well holes to create cracks and open fractures in the shale. Sand is pumped in to hold the fractures open and allow the oil to seep into the well casing.

If Noble is successful with its exploration efforts it could bring more players into the nascent oil market, and the Division of Minerals would ramp up its ability to permit and conduct field inspections, Perry says. The division can collect up to 20 cents per barrel of oil produced in the state toward increasing its staff. Currently, the Division of Minerals processes maybe 10 applications per month for oil and geothermal wells.

Perry is no stranger to working in Elko County. He spent the last seven years working for the state engineer in northeastern Nevada conducting fieldwork and overseeing operation of the dam at South Fork Reservoir. Perry also served on the City of Elko planning commission and the City Council.

Prior to his work with the state Perry was an executive with Newmont Mining Corp., where he worked as regional vice president from 2001 to 2005. Perry was eager to return to his roots in mining and natural resources — and to take on one last big challenge to finish out his career. He graduated from California State University at Chico and went on to get a master’s degree from the Mackay School of Mines and University of Nevada, Reno.

He started his career in 1981 as an exploration geologist and moved to Elko in 1985. He worked for a chemical company for five years before entering the mining sector at the Jerritt Canyon mine. He went to work for Newmont in 1994.

Perry moved oversees and helped Newmont run its Zarafshan mine in Uzbekestan and later moved to his family to Indonesia to start up and manage Newmont’s large Batu Hijau copper mine on the tropical island of Sumbawa, Indonesia.

“I think that gives me somewhat unique perspective on how Nevada competes with the rest of the world with regard to attracting exploration and production investment,” Perry says. “That’ what a lot of it is about.”

Perry was appointed to the post as administrator of the Division of Minerals by a seven-person commission appointed by Gov. Brian Sandoval. He began working in Carson City in mid November.