Colorado counties are reviewing and in some cases developing new rules for oil and gas production and exploration in response to the Niobrara shale boom


As more leasing and drilling is getting closer to the suburbs county governments whose responsibility includes lands overlying the Niobrara play are looking at updating regulations. Here’s a report from The Denver Post (Mark Jaffe). Click through and read the whole thing for all the detail. Here’s an excerpt:

Arapahoe and Douglas counties, like El Paso, are preparing to adopt oil and gas development rules. “We are fast-tracking rules,” said Arapahoe County Commissioner Fred Weddig. “We felt like we are playing catch-up.”

The trend, however, has provoked concern from state regulators and the industry.”Colorado already has the most comprehensive rules in the nation,” said Tisha Schuller, president of the Colorado Oil and Gas Association, a trade group. “County rules could completely stifle the industry.”

David Neslin, director of the state’s Oil and Gas Conservation Commission, said, “We believe oil and gas development is most effectively and efficiently regulated at the state level.”[…]

The activity in the counties is being driven by the feeling that they are ill-prepared to cope with a drilling boom and that the state regulations don’t address some residents’ worries…

Neslin said state rules enable it to put additional conditions on permits in more developed areas — and counties can participate as a “local designee” in the permitting process…

“There are questions of quality of life,” said Jill Duvall, a homeowner who organized the Elbert County Oil and Gas Interest Group, or ECOGIG. “There are questions about protecting property values. The state rules focus on drilling a well.”[…]

Both Duvall, from Elbert County’s ECOGIG, and a group from southern Larimer County, the Mineral Rights Information Gathering Committee, are seeking meetings with Gov. John Hickenlooper. “The rules in place didn’t have suburbia in mind,” said Fred Mitchell, a committee member. “Those rules don’t address the impact on quarter-acre lots. Nobody envisioned this in their backyard.”

As is often the case in oil and gas the people with the dollar signs in their eyes because they own some mineral rights may be in for an awakening. Wyoming is not seeing production equal to Colorado’s “Jake” well that helped start the current Niobrara boom. Here’s a report from Jeremy Fugleberg writing for The Billings Gazette. From the article:

While many well results in the formation are largely still not public, Wyoming Oil and Gas Supervisor Tom Doll said the wells drilled so far are only producing a fraction of the totals from a Colorado well that inspired exploration into the Niobrara in Wyoming. “The reason we’re not seeing a lot of drilling activity in the Niobrara is those wells are not coming in as strongly as people thought,” he told the state Legislature’s Joint Minerals, Business and Economic Development Interim Committee at its meeting in Cheyenne on Friday.

Bruce Hinchey is president of the Petroleum Association of Wyoming, the state’s oil and gas industry trade group. He said the low production rates are discouraging companies from drilling more wells more quickly in the state’s southeast…

EOG Resources’ Jake 2-01H well in Weld County, Colo., started the Niobrara excitement in 2009 when it produced the equivalent of 1,500 barrels of oil a day. It still produces between 250 to 300 barrels of oil a day, the company said in August. Wyoming’s Niobrara wells start at 400 to 700 barrels of oil a day, slip by half within three months, and slow another half within four to six months, Doll said. “None of these wells are the equivalent of the Jake-type well that everyone got excited about,” he said…

Hinchey told the legislators he and others have always been quick to caution people about the Niobrara’s potential. Some expected it to be like North Dakota’s booming Bakken oil field, or Wyoming’s huge Jonah natural gas field near Pinedale, he said. “It is not that,” he said. “And we’ve been saying that all along.”

More oil and gas coverage here and here.

Colorado River basin: More storage, more growth or a commitment to conservation and preservation?


The Pueblo Chieftain ran three columns in yesterday’s edition. First up is Chris Woodka’s musings about the river, preservation and growth in the West. Here’s an excerpt:

Back in 1974 [ed. during a rim to rim hike of the Grand Canyon], my young mind didn’t quite grasp that the pristine river I enjoyed so much was a product of timed releases between Lake Powell and Lake Mead. I did understand enough to know the beautiful canyon walls and mesas were the product of millions of years of relentless, unchecked erosion. Those kind of thoughts were running through my head the other evening as I sat in the Cornerstone Arts Center Celeste Theater in Colorado Springs listening to two legal experts tangle over the worthiness of the Colorado River Compact in a changing world…

The irony of talking about Colorado River issues in a city 80 percent dependent on Colorado River water brought over the Continental Divide did not escape me — you learn to think like this as a water reporter…

One of the speakers, Colorado Supreme Court Justice Gregory Hobbs, took the point of view that more storage is essential to continued enjoyment of the benefits of the Colorado River. Hobbs argued that building more projects along the Colorado River is not only probably, but necessary and desirable. “It’s high-risk water, but it’s going to be there in some years,” Hobbs said. “We can’t just pretend we don’t need more storage and risk drying up all the agricultural land.”

The other speaker, University of Wyoming legal professor Larry MacDonnell, argued that it’s time to start folding up the tents because the Colorado River basin is running out of water. Climate change is going to increase the pressure on the river’s resources. It’s foolish to try to develop any more, he argued. “Is this a sensible use of water?” MacDonnell asked, after listing several projects he considered folly. “In compromise, projects have been built that waste water.”[…]

The states along the Colorado River need to weigh how much more the river can deliver to avoid gobbling up more farm land in the support of growth. The preservation of its awesome beauty should be a major focal point. A frank discussion could lead to surprising conclusions about conservation, growth, land use and, ultimately, the storage of water that makes all that possible.

Meanwhile, Aaron Million’s column talks about developing the water left under the Colorado River Compact and Upper Colorado River Compact for the benefit of Colorado. Here’s his guest column from The Pueblo Chieftain. Here’s an excerpt:

The Upper Basin has over-delivered this region’s water supplies to the Lower Basin in every 10-year running average. Those waters are allocated to the Upper Basin. Why does it matter?

The Upper Basin has major natural resource concerns directly related to diminished water supplies and future increasing demands. Why not consider the Flaming Gorge Project? As a proponent of the project and the principal architect, I’m not afraid of an in-depth, critical environmental review…

…half the Upper Basin has moved forward to develop the supplies that the historic agreements gave to them. Both New Mexico, arguably up against that state’s compact allocation, and Utah, via the Lake Powell Project, have moved toward developing their respective water resources. Colorado and Wyoming need to do likewise. A new water supply would alleviate a myriad of environmental and socio-economic pressures throughout the region, allow aquifers to replenish, protect and enhance flows for use in agriculture, provide for the huge shortfall projected in municipal supplies and add huge new storage capacity with the addition of Flaming Gorge and other new reservoirs along the route. Preliminary scientific data indicates major water surpluses and supplies are available in the Green River-Flaming Gorge system to help alleviate pressures in water-short areas elsewhere, from Cheyenne to Pueblo. And the project, projected to move about 200,000 acre-feet, would take pressure off of western Colorado watersheds…

The build-out cost for this project is about $3 billion — one third of Western Resource Advocates’ estimate. How do we know its $3 billion and not $9 billion? Because we asked several nationally recognized pipeline and construction firms to give us estimates…

This state needs and deserves a straight-up evaluation of the Flaming Gorge project. The scare tactics of the environmental community are sophomoric, unnecessary and will not serve the interests of this region. Why not allow the project to be fully vetted? It’s currently in the federal environmental review process.

Finally, here’s Western Resource Advocates’ Karn Sheldon weighing in on the project from The Pueblo Chieftain. She writes:

Western Resource Advocates wants to see a water supply that sustains urban, agricultural and environmental needs. We want water that is affordable and reliable for all Coloradans. While The Pueblo Chieftain may disagree with our assessment that the Flaming Gorge Pipeline proposal is an implausible illusion (“Strange priorities,” 10/14/11), there are several important facts that should not be confused with opinion:

– The pipeline proposal would annually move 80 billion gallons of water 500 miles up and over the Continental Divide, from the Green River in southwestern Wyoming to Colorado’s Front Range. State agencies estimate the cost of the plan at $7 to $9 billion, which would make this the most expensive water in Colorado history. To put that into perspective, the most costly recent water project completed in Colorado is Aurora’s “Prairie Waters,” with a price tag of about $700 million.

– According to The Chieftain, “there is growing support for the pipeline in both Wyoming and Colorado.” But all available evidence indicates exactly the opposite. A statewide poll released in September by Trout Unlimited showed that 79 percent of Wyoming residents oppose the pipeline. “It makes perfect sense to me that so many people in Wyoming oppose this project,” said Wyoming Gov. Matt Mead, who has also said that the plan is “not well thought-out.” Sweetwater County Commission member John Kolb called it “a sham.”

– Million has tried to reclassify his pipeline plan as an energy project in order to find a federal agency that will agree to give him a permit. Million claims that the pipeline would generate 550 to 1,000 megawatts of hydroelectric power, but by first moving water over the Continental Divide, the pumping stations would consume more energy than they could generate.

More Flaming Gorge pipeline coverage here and here.