Loveland and other municipalities are seeing increased revenues selling water for hydraulic fracturing

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From the Loveland Reporter-Herald (Tom Hacker):

As gas producers expand their operations into the western fringe of the Wattenberg field in Larimer and Boulder counties, their demands for water reach into municipalities up and down the Front Range, Loveland among them. “We’re not selling as much as other providers, because we’re further away from most of the activity,” said Loveland water resources engineer Greg Dewey. “But it has become a significant source of income for us.”[…]

Loveland does not disclose names of water customers for privacy reasons, nor do other cities in the region. But the dominant supplier of water to the industry, Fort Lupton-based A&W Water Service Inc., sends its tanker trucks to Loveland on a regular basis to load water at designated city hydrants to take to drilling sites…

Loveland water manager Dewey said A&W and other suppliers draw about 2 million gallons monthly, a tiny fraction of what other municipalities in the region provide. They pay at the rate of $1 for 300 gallons, more than twice what Loveland homeowners pay for their usage. And, the industry’s purchases from Loveland make scarcely a dent in the city’s supply…

Greeley, located in the heart of the Wattenberg field, has a long history of providing water to the petroleum industry and its supply share is vastly greater than Loveland’s. That city’s sales are measured in acre-feet rather than gallons. “The amount has risen rather dramatically in the past couple of years,” Greeley water manager Jon Monson said. “And, the industry is telling us to expect something like a 30 percent increase this year.” In 2010, the city sold 860 acre-feet of water, equal to 280 million gallons. Last year, the number climbed to 1,500 acre-feet, or just under half a billion gallons. By comparison, the city used 22,000 acre-feet last year and rented another 26 acre-feet to farmers.

More oil and gas coverage here and here.

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