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More IBCC — basin roundtables coverage here.
From the Aspen Daily News (Curtis Wackerle):
There will also be a public meeting Tuesday evening with city and FERC officials to explain details of the project and take questions.
Beginning at 1 p.m.,, city officials will lead site visits to five locations associated with the new hydro project. The field trip will visit diversion facilities on Castle and Maroon creeks, where the city takes its water for consumptive and hydro power purposes. There will also be visits to the existing Maroon Creek hydro facility, the water treatment plant at Thomas Reservoir and the site of the proposed new hydro plant under the Castle Creek highway bridge. Registration for the field trip closed last week. About 30 people, including two FERC representatives in from Washington, D.C., are signed up to go along.
Beginning at 5 p.m. Tuesday at the Rio Grande conference room in the building above Taster’s Pizza, the city will hold a meeting open to the general public. The meeting’s purpose is to “present information and have a dialogue,” said David Hornbacher, the city’s director of utilities and environmental initiatives.
The meeting kicks off a 60-day comment period with the feds where the public is invited to weigh in on the project as FERC considers granting a license. The city is proposing to build a plant taking up to 52 cubic feet per second of water from Castle and Maroon creeks to feed a generator that could produce an average of 6.8 million kilowatt hours of electricity a year.
Here’s the release from ALANCO Tecnologies, Inc.:
New Subsidiary Alanco Energy Services, Inc. to Provide – Produced Water Disposal Services to Natural Gas Industry
Alanco Technologies, Inc. announced formation of a new wholly owned Colorado subsidiary, Alanco Energy Services, Inc. (“AES” or “Company”) to treat and dispose of “produced water” generated by natural gas producers in Western Colorado. The new Company has entered into a definitive agreement to purchase (expected to close in the next few days) a 160 acre parcel; acquired an additional long-term leased site (both located near Grand Junction, Colorado); and acquired intellectual property and rights to federal, state and county permits required to develop both sites to provide such services to the local gas industry.
Produced water, usually highly saline, and containing 1-2% entrained hydrocarbon condensate (oil), is produced as a by-product of oil and gas production, and is most often disposed into on-site injection wells, near the production sites. However, on-site capacity limitations frequently require producers to truck excess water to alternative commercial disposal facilities, which can be a major expense, particularly in light of current low gas prices. Recent growth of the U.S. natural gas industry is creating demand for new facilities to dispose of produced water, while increasingly restrictive federal and state environmental requirements are increasing both the cost and timelines for new disposal locations and/or expansion of existing facilities.
AES’s produced water business will entail the receipt of truck delivered produced water from gas producers within an approximate 100 mile radius of AES’s disposal sites for a per barrel fee in the $3 – $4 range; treatment of the received water to recover and sell the approximate 1-2% of entrained oil; and disposal of the treated water into on-site evaporation ponds. AES’s target market is Western Colorado’s Piceance Basin production area, with over 12,000 currently active gas wells. In 2010, Piceance Basin gas producers generated in excess of 35 million barrels of produced water, and contracted for off-site disposal of about 15% of that volume.
AES’s initial investment, for land purchase, lease transfer, permits and intellectual property comprised of an approximate $600,000 cash payment, 40,000 shares of restricted Alanco common stock, a $200,000 non-interest bearing secured note due November, 2012, and potentially significant earn-out payments over an approximate 10 year period, based upon AES profitability. The sellers in the transaction were Colorado-based TC Operating, LLC, and a related entity, Deer Creek Disposal, LLC.
Phase I site development has commenced with completion anticipated in 12 months, and additional capital investment estimated to be approximately $5,000,000. Alanco Management anticipates that currently available cash and equivalents, plus significant early AES cash generation, will be sufficient to finance Phase I project build-outs. Future planned facilities expansion is expected to be entirely financed by AES generated cash flow.
AES has entered into a Management Services contract with TC Operating, LLC (“TCO”) to provide operating management of the AES produced water disposal business, including facility construction project management. The TCO managing partners, Tom Pool and Craig Creel, each have over 30 years of broad experience in the oil and gas industry.
Click on the thumbnail graphic to the right for the latest snowpack map from the Natural Resources Conservation Service.
From the Yuma Sun (Chris McDaniel):
“System wide total reservoir storage, as of April 4, was 63 percent of capacity,” said Doug Hendrix, external coordination manager for the Bureau of Reclamation’s Yuma Area Office. “This year has been a little bit drier year. The precipitation to date in the Upper Basin into the Upper Basin reservoirs has been about 79 percent of average.” Another issue that means lower water levels was the very warm weather in March that prematurely melted an already small snowpack into the river’s Upper Basin. Snow is the source of most of the river water flowing into the Lower Basin states of Arizona, Nevada and California.
Here’s the State of the Climate National Overview March 2012 from the National Climatic Data Center. Click on the thumbnail graphic to the right for a U.S. map of temperature departures from average for March.
More coverage from the Summit County Citizens Voice (Bob Berwyn):
Every state in the country broke at least one record high during March, and 25 states east of the Rockies reported their all-time warmest March readings on record. For the contiguous 48 states as a whole, March was also the warmest on record, at 8.6 degrees above the breaking the old record (1910) by .5 degrees. The National Climatic Data Center reports that it was second-largest single-month departure from average temperatures, after January 2006. And despite a lingering La Niña, which often has a cooling influence, the first quarter of 2012 is also being reported as the warmest on record.
From email from the Colorado Water Conservation Board (Ben Wade):
The next Water Availability & Task Force meeting is on Wednesday, April 18 from 9:30a-11:30a.m. at the Colorado Parks & Wildlife Headquarters, 6060 Broadway Denver, CO, in the Bighorn Room.
More CWCB coverage here.
From the Associated Press via the San Francisco Chronicle:
Salazar spoke during the State of the Rockies Project conference at Colorado College, where students have been studying how to preserve the Colorado River basin…
…climate change, drought and population growth in the West have heightened interest in how the states and Mexico can continue sharing the [Colorado] river and still support irrigation, hydropower, tourism, recreation, agricultural and municipal needs and wildlife. Salazar said the Colorado River Compact that outlines how seven Western states and Mexico will share the river system’s water was created without the best science or knowledge. The agreement wrongly assumed there was 2 million acre-feet more available than there really is, he said. Nevertheless, he said the compact will not be reopened. Within Salazar’s department, the U.S. Bureau of Reclamation is reviewing ideas for how to address a projected imbalance in Colorado River basin supply and demand.
Meanwhile the U.S. and Mexico continue to negotiate details of how to share the river. Salazar’s appearance Monday came the same day that 25 conservation groups delivered a petition urging the U.S. and Mexico to allow some flows to return to the dried-up delta where the Colorado River flows into the Gulf of California. Salazar said the U.S. and Mexico hope to announce results of the negotiations soon. He didn’t give a timetable.
More coverage from Debbie Kelley writing for the Colorado Springs Independent. From the article:
As President Obama’s appointed U.S. Secretary of the Interior, the San Luis Valley native and 1977 CC graduate is familiar with the problems associated with what’s often called “the hardest-working river” in the nation. “The Colorado River is already a water-short river — more water has been allocated than what that river has today, not only along southern states but with the treaty with Mexico,” Salazar said during the 2012 State of the Rockies Project conference, which continues Tuesday. But Salazar assured the hundreds of conference attendees that his department is working on the issues and hopes to announce a new allocation agreement with Mexico soon.
The river is ruled by a compilation of decrees, rights, court decisions and laws that together are referred to as the “Law of the River.” The keystone is the 1922 Colorado River Compact, an interstate agreement for general water allotments, which Salazar said overestimated by 2 million acre feet the annual amount of water that could be extracted from the river. In response to a question from the audience, Salazar said he doesn’t think the Compact will ever be opened up for negotiation: “The legacies that have been created over 89 years are so embedded in the Law of the River,” he said…
Salazar also seized on the connection between the dwindling water supply and the energy industry, deriding the push by U.S. Rep. Doug Lamborn, R-Colorado Springs, for expanded oil shale development. “We need to let the world know how much water would be required to develop those oil shale resources — the estimates I’ve seen are over 1 million acre feet and some at 2 million,” Salazar said. “Where would that water come from? What’s going to be the consequences to the ranchers and farmers dependent on the Colorado River?”
More Colorado River basin coverage here.
From The Denver Post (Bruce Finley):
Town officials are asking companies to let them review drilling plans for compatibility with local development. They’re demanding new drilling operations capture 100 percent of air emissions. They’ve begun using a $50,000 device that tests water for hydrocarbons. “We have to do everything in our power to protect our residents’ health and safety,” town administrator A.J. Krieger said…
Testing along creeks and irrigation ditches and in reservoirs “is going to give us baseline data,” water-plant operations chief Bruce Chameroy said. “What we’re looking for is changes.”[…]
“We know we don’t have the authority to stop it. Even our residents who are most concerned recognize the need for energy and private-property rights. We just want it done in a safe way,” Krieger said.
State task-force talk has encompassed emerging new arrangements using local inspectors at well sites. But Erie is wary of “unfunded mandates” and can’t afford to hire chemists and petroleum engineers to conduct proper inspections, Krieger said.