From The Pueblo Chieftain (Chris Woodka):
Before last year, the state did not administer water produced by coal-bed methane wells. The water in question is groundwater commonly found along the seams of coal from which methane gas is extracted. In the Arkansas River basin, there are hundreds of wells located in Las Animas and Huerfano counties. There are also large coal-bed methane fields in the San Juan and Picance basins in Western Colorado, as well as at smaller sites around the state…
The state Legislature subsequently passed a law, 09-HB1303, that affirmed the Supreme Court decision that removal of water for coal-bed methane is a beneficial use. The law also directed State Engineer Dick Wolfe to develop rules for oil and gas wells. “So, what does it mean? It means the state could issue permits, and it could mean a big curtailment,” [Kevin Rein, assistant state engineer] said. Nontributary groundwater is not affected by the decision or the law, however. The state does not administer nontributary groundwater — that which is pumped from wells that would not have a 1 percent depletion on surface flows over 100 years. Earlier state laws, 73-SB213 and 85-SB5, give certain rights to landowners or oil and gas drillers to nontributary water. Because gas wells often are thousands of feet deep, as opposed to hundreds of feet for most domestic or irrigation wells, many could be nontributary, Rein explained…
In coal-bed methane production, the removal of water itself is considered a beneficial use, so all require a permit if the groundwater is deemed tributary. In other oil and gas production, the state still regards only water used for purposes such as dust suppression or fracturing geologic formations as beneficial. So far, about 5,000 coal-bed methane wells have obtained permits, and some companies have begun filing for water rights in Water Court or substitute water supply plans from the Division of Water Resources.