Category: Coalbed Methane

Energy policy — coalbed methane: SB 10-165, Adjust Oil And Gas Well Regulation

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From the Cortez Journal (Joe Hanel):

[Senate Bill 10-165] (pdf) passed the Senate Agriculture Committee 6-0 on Wednesday. Sen. Bruce Whitehead, D-Hesperus, voted yes… SB165 extends the [March 31 deadline to file a substitute water supply plan] until August, because the state engineer’s office was facing a flood of paperwork.

Meanwhile the Colorado Water Conservation Board’s construction fund avoided being dried up completely as the legislature moves to pass a budget bill. Here’s a report from Joe Hanel writing for The Durango Herald. From the article:

A year ago, the Colorado Water Conservation Board had two of the richest bank accounts in the state government. But after the recession arrived, the Legislature took $107 million from the accounts. Today the balance stands at about $19 million, and the Legislature’s budget writers had plans to take that, too…

But Gov. Bill Ritter’s Department of Natural Resources rebelled, and a bipartisan group of representatives joined to defeat the effort on a 39-22 vote…

The spat was a sideshow to the major work the House did Wednesday – cutting hundreds of millions out of this year’s budget. Wednesday’s bills bring the total cuts to about $2 billion. And there’s more to come. In March, the Legislature will take up the 2010-11 budget, which needs an added $1 billion in cuts. For the most part, Wednesday’s work formalized cuts that Gov. Bill Ritter proposed last year. The savings come from eight unpaid days off for state workers and cuts in payments to Medicaid doctors and caretakers of disabled people. The plan also takes $64 million in gas and oil taxes that had been earmarked for local governments.

More 2010 Colorado legislation coverage here.

Energy policy — coalbed methane: Bayfield public meeting recap

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From the Pine River Times (Carole McWilliams):

About 60 area residents plus gas production company and Colorado Division of Water Resources representatives turned out Tuesday evening at Bayfield High School for a presentation on all the water that’s pumped out of coalbed methane wells to get the gas to flow. The meeting was prompted by new state rules for coalbed methane well water deemed to be “non-tributary,” and by massive company filings in District 7 Water Court for rights to water – both tributary and non-tributary – that they are pumping out of coalbed methane wells…

“In the past, if there was no beneficial use, no water well permit or augmentation plan was required,” [State Engineer Dick Wolfe] said. “The change is in what’s considered beneficial use.” The other big distinction is whether the water is tributary to a stream. If it is, an augmentation plan may be needed to protect senior water rights from stream depletion.

Attorney John Cyran from the State Attorney General’s Office Water Rights Division said that as a result of the Vance decision, Fruitland formation coalbed methane wells need water well permits. “We have authority to issue permits or to stop any withdrawal if there’s injury to senior rights,” he said. “We still don’t think we should have to issue permits. If you issue permits, they are water rights.”

Cyran continued, “The Vance Supreme Court ruling means produced water is an appropriation for beneficial use, and they need well permits. If they are tributary, they have to replace any water that’s out of priority with augmentation. It means we have to issue thousands of permits. And we have to make sure there’s no injury to senior rights.” With many Fruitland coal wells, the connection with surface streams (mainly at the formation outcrop) is so distant that potential depletion “isn’t enough to worry about,” he said. “We have to administer the tributary wells and figure out which aren’t tributary. It’s a lot of them.”

The State Engineer’s recently released rules governing non-tributary coalbed methane wells include a map designating non-tributary areas, almost all south of Highway 160, and much of it south of the Ute Line.
The rules state that they “shall not be construed to establish the jurisdiction of either the State of Colorado or the Southern Ute Indian Tribe over non-tributory ground water within the boundaries of the Southern Ute Indian Reservation…”[…]

Wolfe described the 1973 and 1985 laws dealing with non-tributary groundwater rights. The 1973 law gave exclusive right to the surface owner. The 1985 law allows “incidental withdrawal of non-tributary water in mining operations,” only the amount necessary to produce the oil or gas, and only while oil or gas production is happening. A man asked about recent production company letters to landowners referring to an absolute water right. Wolfe said the term absolute refers to water production from existing wells while conditional right refers to potential future wells. Sarah Klahn, the palintiffs’ attorney in the Vance suit, said a primary legal issue yet to be determined is, “Can you get the right to non-tributary water if you don’t own the surface?” Cyran clarified that the Engineer’s Office issues water well permits, while water rights must go through Water Court…

Ron Burkett, whose family owns one of the county’s largest private properties with many gas wells on it, asked where the augmentation water will come from. From Vallecito or from ditch company rights, Assistant State Engineer Kevin Rein said. “There’s a real strict court process for that.”[…]

As for the flood of company Water Court filings [by energy firms], he said, “You can’t claim water you won’t actually use. No speculative claims.” It can’t injure senior rights, and it has to be administered in priority…

Wolfe advised a couple augmentation plans have just been filed, and March 31 is the deadline for producers to file augmentation plans for all existing tributary coalbed methane wells. These can be blanket applications by individual operators or groups of operators. They have to identify every coalbed methane well in the plan and the source of replacement water, he said. Anyone wanting to file statements of opposition to the company filings for water rights or augmentation plans must satisfy criteria to have standing with the court, Cyran said. “You need some kind of water right to have standing.” Owners of water wells that don’t have an adjudicated water right – which is different from a water well permit – have to the end of this month to apply for that and gain standing, he said, adding, “It’s not that hard to file a water right application.” However, Bayfield attorney Marian Tone pointed out to the Times that it costs $224 per water well to file a rights application, plus $158 to file a statement of opposition. “They say it’s no big deal, but it is.”

More coverage from Katie Burford writing for The Durango Herald. From the article:

“The oil and gas industry is only seeking the water rights associated with oil and gas production,” said Bruce Gantner, a ConocoPhillips environmental consultant who is handling comments about the company’s application. Others filing applications in the area include BP, the Southern Ute Tribe and Chevron.

But some observers of the process called it a “water grab” and question the legal framework for the gas companies’ claims. “I think that the applications are overreaching, and they’re very broad, and they’re probably speculative, as well,” said Amy Huff, a water attorney who recently presented at a public meeting about the subject…

Gas companies firmly assert that water to which they are seeking rights is deep underground and has no effect on water people use for drinking or irrigating. “This water is not of a drinking-water quality,” Gantner, with ConocoPhillips, said. Zeller argued that domestic wells run a couple hundred feet deep or less while gas wells are about 3,500 feet or deeper.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Landowners mulling filing for water rights after industry filings surface

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Here’s a call to arms of sort from the Director of the San Juan Basin Citizens Alliance, Megan Graham, via The Durango Herald. She is recommending that landowners get educated quickly about filing for water rights under their land now that the oil and gas operators in the area are filing for decrees as a result of the new rules for coalbed methane produced water from the State Engineer. From the article:

The map defining the two, issued by the state engineer’s office, has raised some questions in that it was based heavily on input from industry. But what has gotten even more attention is a blizzard of water-rights filings by industry on the water in question: rights that would trump those of the overlying surface owners who had not previously sought their own adjudicated water right. The nuances of this scenario are many, and landowners on whose property these rights have been filed understandably are full of questions about what the filings mean for their water and land.

There are larger questions, too, about what the industry is up to. Seeking legal, and arguably unnecessary, claim to thousands of acre-feet of water – albeit often brackish and of questionable use – without permission of the overlying landowner is hardly neighborly, and raises eyebrows at the very least. It also raises a number of legal issues that will be keeping water attorneys busy for the next several months, at a minimum. And that leaves aside, for the moment, the question of augmentation plans for the water deemed to be tributary.

In the meantime, though, landowners who received notice of a water-rights filing – tributary or nontributary – would be wise to educate themselves about what is at stake in their particular circumstance. Those with an adjudicated right or a ditch right, for example, might take a different course of action than someone who has no property rights to the water in question.

There are a number of options on how to proceed, and determining the best one requires diligence and access to knowledgeable resources. Fortunately, there are many of these available to help sort through this inherently murky situation.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: La Plata County Informational meeting on the State Engineer’s new coalbed methane produced water rules tonight

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Here’s a recap of yesterday’s informational meeting, from Katie Burford writing for The Durango Herald. From the article:

State water officials were at Bayfield High School on Tuesday evening to provide information about a water case decided last year by the state Supreme Court and related to recently passed legislation. After nearly three hours of presenting and answering questions, more questions were still rolling in from the approximately 125 people in attendance. “I know people have a lot of concern,” said John Cyran, head of the water-resources unit at the state Attorney General’s office.

The most contentious issue at Tuesday’s meeting was a map released last month by the state Engineer’s Office showing where water is considered tributary – meaning it feeds into streams – and where it is not. Generally speaking, tributary wells were closer to the Fruitland Outcrop – where the lip of the San Juan Basin curves to the surface in an arch across La Plata County. Meanwhile, deeper wells farther out in the basin toward New Mexico were mostly nontributary…

State law gives nontributary water to both landowners and gas operators, so long as operators are using it specifically for mining. But only water court can grant either of them an adjudicated right to the water. The fact that gas companies are speaking up for the nontributary water by filing applications in water court had residents at the meeting asking if they should do the same. State officials said to have standing in the case, residents, too, must file for a right in court. Once they have a pending application before the court, they can file an objection, which is due by the end of the month. “You’ve got to show you’ve got a dog in this fight,” Cyran said.

Here’s the link to the proposed rules from the Colorado Division of Water Resources website.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Do the recently issued produced water regulations fall short?

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Here’s a guest column from Durango water attorney, Amy Huff, that is critical of the new rules promulgated by the legislature and the state engineer for regulating produced water from coalbed methane wells. Ms. Huff wonders if the rules will protect senior rights holders. From the article:

Last April, the court held that the extraction of water – often called “produced water” – that occurs in the process of extracting coal-bed methane is a beneficial use of water, requiring a water right, which must be administered in our priority system. That ruling resulted in the Legislature revising Colorado’s statutes to give special rights to those claiming to use nontributary water for mineral purposes, in the state engineer promulgating rules that define certain areas of the groundwater in the San Juan Basin to be nontributary, and in the gas industry racing to the courthouse to adjudicate water rights for its coal-bed methane wells. These significant changes to Colorado’s water administration system should be carefully reviewed to ensure all water users are treated fairly, and to protect their property rights…

Before the recent legislative changes, people seeking non-tributary water rights, which would not be subject to the prior appropriation system, had to demonstrate they had the landowner’s consent to withdraw the water. The recent legislative changes have exempted those seeking nontributary ground water for mineral development, including oil and gas development, from obtaining landowner consent, and now the state engineer has designated an area of groundwater in the San Juan Basin as nontributary, as long as the permittee is using the water for mineral development.

In response, there were 12 water court applications filed last month by gas operators to obtain water rights for coal-bed methane production purposes. In total, these applications identify approximately 1,300 existing coal-bed methane wells and contemplate an additional 2,000 wells. Many landowners have received notice that a company has filed for a water right that will be diverted through a structure located on their property. The applications filed by entities such as ConocoPhillips, XTO Energy, Southern Ute Tribe, BP, Samson Resources, Four Star Oil & Gas, and Chevron are confusing because, in many instances, the locations of the water rights sought by these companies are broadly defined and are often described as a “well field,” making it very difficult to know where the energy company is planning to drill.

Additionally, some applications claim a right to nontributary water. Colorado case law has confirmed that the legislative intent has been to allocate the right to withdraw nontributary ground water according to overlying land ownership; nonetheless, the Legislature has now exempted those using non-tributary water for mineral development from needing to obtain that landowner’s consent.

The legality of this preferential treatment is uncertain and, therefore, debatable. It is inequitable that an entity can withdraw nontributary water for mineral development without landowner consent, while an entity that wishes to withdraw the same water for any other purpose is still required to obtain such consent. A more detailed notice of the water court filings can be found at the following Web site: http://www.courts.state.co.us/Courts/Water/Division.cfm/Water_Division_ID/7.

With the Legislature’s authorization to promulgate rules to assist in the administration of nontributary water used for mineral development, the state engineer developed Produced Non-tributary Ground Water Rules, which set forth the procedures for obtaining a nontributary designation and also establish certain areas of ground water that are nontributary, if the permittee is using water to facilitate the mining of minerals. It is problematic whether the state engineer should have the authority to establish different procedures for permitting wells that withdraw nontributary water when the water is used to facilitate mineral development and whether he can designate the ground water beneath landowners’ property as non-tributary to benefit those who are in the business of mining minerals. For more details, visit http://water.state.co.us/ for a copy of the rules. In particular, examine the maps that show the boundaries of the nontributary area in the San Juan Basin.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: State Engineer Dick Wolfe uses industry maps to develop rules governing produced water augmentation

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From The Durango Herald (Joe Hanel):

State Engineer Dick Wolfe finished new rules for area coalbed methane wells Dec. 30. They allow most of the wells in San Juan Basin to be treated as nontributary, meaning the water in the coal seams does not connect with surface streams. “There’s a lot at stake. If they can turn Colorado water law on its head like this and get away with it, I don’t know how anybody can feel like their water rights are safe,” said Jim Fitzgerald, who successfully sued the state in 2005 for not protecting his water rights from coalbed methane drilling. Fitzgerald’s wife, Mary, and Bill and Elizabeth Vance of Archuleta County also were plaintiffs.

Their case went to the state Supreme Court, which said coalbed methane wells need to get a water permit from the state engineer. What’s more, gas companies might be required to create augmentation plans to replace the water they use…

The Supreme Court case scared water regulators – who feared a blizzard of paperwork – and gas companies – who did not want large new costs for drilling wells. Shortly after the Supreme Court ruling last April, the Legislature directed Wolfe’s office to set rules about which wells don’t need augmentation plans. The rulemaking is ongoing, but the portion that covers coalbed methane wells in Southwest Colorado was finalized in December…

During the rulemaking, area gas companies collaborated to create a map of nontributary water. Wolfe adopted that map as official state policy. The change takes effect at the end of January, but Fitzgerald and other land-owners plan to appeal to water courts. Wolfe defended his decision to use the gas companies’ model of underground water. It used good science based on “complete and robust data,” Wolfe wrote in his justification for the rules. Zeller, too, defended the way companies drew the map. “If we were in doubt, we erred in the interest of the other water rights holders,” she said…

Durango City Manager Ron LeBlanc sent Wolfe a letter last month to say he thought the rules could hurt the city’s water rights on the Animas and Florida rivers. “We believe the results of such rulemaking may not be manifested for decades to come, and that the effect of the dewatering of aquifers in the area of our water rights will have a detrimental and irreversible effect on the city’s pubic water supply,” LeBlanc wrote…

San Juan National Forest Supervisor Mark Stiles sent Wolfe a letter asking for a delay until federal land officials could do detailed studies on springs in the land they manage. Wolfe didn’t grant the delay, but the Forest Service does not plan to appeal, Stiles said…

Wolfe said he took seriously the concerns from foresters, city officials and others. “I don’t want people to think that we were totally dismissive of these individuals’ concerns,” he said. In general, Wolfe’s map puts wells in the southern parts of La Plata and Archuleta counties into the nontributary zone, exempting them from strict regulations. Most of the Southern Ute Indian Reservation is in the nontributary zone.

Even with the nontributary exemption, gas companies still will have to file well permits for more than 4,000 Southwest Colorado wells. And the tributary wells will need court-approved plans to replace the water they use. Those plans will go back to Judge Gregory Lyman, the Durango water judge whose ruling started the whole affair, Zeller said. “He’s going to get a whole bunch of paperwork,” she said.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Produced water rules for Colorado update

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From The Durango Herald (Joe Hanel):

State Engineer Dick Wolfe held hearings last week to develop a computer model that will tell him which gas wells need extra attention. The hearings will conclude Dec. 16 with a discussion of wells in the San Juan Basin…

Wolfe hopes to make a decision on the model by the end of the year, in order to get the rules on the books by Feb. 1. Last week’s debate concerned only Colorado’s 5,000 coalbed methane wells, which are more likely to interact with water claimed by senior water rights. A separate rulemaking in January will deal with noncoalbed methane wells, but it’s likely most of those do not affect surface water, Wolfe said. Under the bill the Legislature passed this year, all coalbed methane wells will have to get a permit from Wolfe’s office. But only the wells his model identifies as a problem will have to file substitute water-supply plans to make sure they don’t harm senior water rights.

More coalbed methane coverage here and here.

Routt County: Study into possible effects of coalbed methane exploration and production on groundwater and surface water underway

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From the Craig Daily Press (Collin Smith):

An ongoing study into the possible effects of coalbed methane production in the Sand Wash Basin now shows the area has deep faults potentially connecting coal seams and near-surface water reservoirs. This would mean activity in those coal seams could affect water resources used by local residents…

Officials from the Colorado Geological Survey are completing the study, which is slated to cost about $121,000. Moffat County contributed $1,500, Routt County $500 and state water groups funded the rest. Researchers said they are done mapping the methane and water resources of the basin, and next plan to build an analytical model that will help evaluate what impacts may arise in the future from coalbed methane production…

Peter Barkmann, managing hydrogeologist for the Geological Survey, said companies may have to do additional research before starting coalbed methane production in the Sand Wash Basin. “I think, if anything, the complexity of the basin tells me there’s going to have to be a pretty careful examination done before a company attempts to produce coalbed methane,” Barkmann said.

More coalbed methane coverage here and here.

The Colorado Geological survey is planning study of the effects of coalbed methane production on water quality and streamflow

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From The Trinidad Times Independent (Randy Woock):

The study, which is to be conducted beginning this month and stretch through June 2010, will seek to compile current and historic stream flow levels; characterize the quality of ground and surface waters in the river basin; determine the relationship between coalbed methane (CBM) “producing intervals” – a given time period when a production wellhead is working – aquifers and surface formations, and create a groundwater-level monitoring system and determine the hydraulic storage capacities of the bedrock (how much water it can hold) and alluvial aquifers (those formed by deposits of things such as sand and silt).

“This is really a follow-up to a stream depletion analysis that was done by multiple state agencies – the Colorado Oil and Gas Conservation Commission (COGCC), the Division of Water Resources and our own agency,” Colorado Geological Survey (CGS) Senior Hydrologist Ralf Topper said in an Aug. 21 interview. “That was a first look at trying to answer the question, is there an impact from CBM production on water rights? That study indicated that, yes, there was an impact to stream depletion.”

More coalbed methane coverage here and here.

Huerfano County: Petroglyph Operating Company Inc. angling to restart coalbed methane wells

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From The Pueblo Chieftain (Anthony A. Mestas):

The Colorado Oil and Gas Conservation Commission shut down the methane wells in 2007 because of seepage into private water wells.

Residents, however, still are complaining that coal-bed methane has migrated into their water wells and that some of those wells are drying up. Farmers and ranchers also are expressing fears that drilling for coal-bed methane could contaminate groundwater. The Boise, Idaho-based company has requested a 10-year permit to pump water from one formation, treat it and then reinject it into another formation that contains domestic water wells and is used for agriculture. The company hopes to create a barrier of water to prevent methane from going where it shouldn’t.

More than 100 people gathered Monday at the Walsenburg Community Center for a meeting with U.S. Environmental Protection Agency officials to speak out against the permit. Valois Shea, an environmental scientist with the EPA, led the meeting.

More coalbed methane coverage here and here.

Lower Dolores Plan Working Group: Issue fact sheets

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Here’s the link to the Dolores River Dialogue’s Lower Dolores Plan Working Group set of issue fact sheets. Here’s a report from the Cortez Journal. From the article:

The goal is to gather information, identify values worthy of protection in the planning area, formulate ideas for protection of the values, and make recommendations to the Dolores Public Lands Office – the U.S. Forest Service and U.S. Bureau of Land Management. Once the Lower Dolores Management Plan Working Group makes its recommendations, the public lands office will initiate a formal environmental assessment process, conduct public involvement, and issue a decision notice.

More Coyote Gulch Dolores River coverage here.

Energy policy — coalbed methane produced water regulation

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From the Pine River Times (Carole McWilliams):

“The grounds of the suit were that groundwater diversions had to be regulated under state water law,” Klahn said. “We thought it would be a nice quiet little suit, but then BP intervened. In April this year, we were affirmed on all accounts by the State Supreme Court. It’s the kind of win you only get once in your career.” The repercussions are still being sorted out.

“We are proceeding on all fronts to try to maintain our win,” Klahn said. “We aren’t assuming it will be fine. We want more than a paper win.”

More Coyote Gulch coverage here and here.

New real estate group to focus on public land and water quality issues

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From the Greeley Tribune:

A group of real estate agents have organized a group in northern Colorado with a goal of bringing attention to the connection between the quality of life that attracts employers and the conservation of public lands and water. The primary focus of the Northern Colorado Home Ownership Alliance is a concern for the long-term impacts on Colorado’s clean water and public land because of the hardrock mining of uranium and other minerals. The group also hopes to focus on the need for clean energy and climate protection legislation that leads to the creation of new markets for renewable energy producers, local green collar job growth, and economic opportunity for families.

H.B. 09-1303: Admin Mineral Development Water Wells

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Here’s a look at last week’s ruling by the Colorado Supreme Court which upheld a water court decision that water produced from coalbed methane wells is a beneficial use of the water and therefore subject to regulation by the state, from Randy Woock writing for the Trinidad Times-Independent. From the article:

The Supreme Court’s decision cited the Water Right Determination and Administration Act of 1969, which defined beneficial use as “…the use of that amount of water that is reasonable and appropriate under reasonably efficient practices to accomplish without waste the purpose for which the appropriation is lawfully made.” The court’s decision stated that, “Under the language of the Act, the (CBM) process “uses” water – by extracting it from the ground and storing it in tanks – to “accomplish” a particular “purpose” – the release of methane gas. Consequently, the extraction of water to facilitate (CBM) production is a “beneficial use” as defined in the Act and a “well” as defined in the Colorado Ground Water Management Act. ” The produced water from the CBM process had previously been considered a waste by-product, but the court’s decision rejected such a classification. “We reject the argument that water used in (CBM) production is merely a nuisance rather than a ‘beneficial use.'” the decision stated. “On the contrary, the use of water in (CBM) production is an integral part of the process itself. The presence and subsequent controlled extraction of the water makes the capture of methane gas possible.”[…]

Pioneer Natural Resources, the largest operator of CBM wells in Las Animas County, issued a response Thursday to The Times regarding the Supreme Court’s decision in the Vance case. “Pioneer has been following the case for some time and is presently evaluating the ramifications of the Supreme Court’s ruling,” Tom Sheffield, Vice President of Pioneer’s Rockies Assets Team, stated. “We appreciate the foresight of Representative (Kathleen) Curry, Senator (Jim) Isgar and the (SEO) for introducing a measure providing adequate time for a coordinated roll out of activities required by the new ruling while protecting existing tributary water rights in the state. That legislation, House Bill 1303, will be key to all Las Animas County water owners when it is passed and signed into law.”

According to Curry, House sponsor of HB 09-1303, the bill would provide breathing space for the large number of operators whose wells were just rendered out of compliance by the court’s decision. The bill would extend the amount of time available to operators to bring their wells into compliance with the permitting process as required by the court’s decision from 60 days to 270. “If I hadn’t run (HB 09-1303)…the Vance case affirms that about 5,000 gas wells would have been shut down, so we ran that bill to make sure there was a permitting process in place for (CBM) wells,” Curry said. “If we hadn’t run the bill, the Vance case, based on the ruling…all of those wells would have been out of compliance; we were guessing the the Supreme Court would rule that produced water is a beneficial use.”

Curry described the primary goal of the bill as setting up a regulatory process to “ensure that preexisting water users aren’t injured,” while also creating a process to brings all the CBM wells into the SEO’s regulatory framework. “It implements the decision, so I think we did a preemptive strike, knowing that the decision could put us in a position where they (the SEO) could have to review well permits for 5,000 wells in a 60 day period, and that’s just not practical,” she said. “They only do 1,000-2,000 well permits a year, and there would have been a 60 day period where all the operators on those (CBM) wells would have had to come into the (SEO) to get a permit. At least this way now we’ve got a way where the state can handle the workload and the operators can come into compliance.” HB 09-1303 also provides a requirement for augmentation for wells that might be depleting senior domestic water rights or existing domestic wells, and gives the state engineer the right to set additional guidelines for determining tributary versus non-tributary waters, along with the right to take the necessary steps to bring an operation into compliance should the operator have failed to have done so within the 270 day period. The bill stated that it was the legislature’s general intent to “clarify the circumstances under which permits are required when non-tributary ground water is removed in conjunction with the mining of minerals.” Non-tributary water is defined by HB 09-1303 as possessing several characteristics, such as being “withdrawn from a well that is completed in a confined sedimentary bedrock formation,” in addition to, “the well is not completed…in the Raton Basin and the well is located more than (12) miles from any point of contact between the aquifer and any natural stream, including its alluvium.”

More Coyote Gulch coverage here, here and here.

H.B. 09-1303: Admin Mineral Development Water Wells

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Here’s a look at the recent decision by the Colorado Supreme Court upholding the water court ruling that dewatering used in production of coalbed methane puts the groundwater to beneficial use and therefore is subject to prior appropriation, from Joe Hanel writing for the Durango Herald. From the article:

The ruling means that all 4,600 coal-bed methane wells across the state have two months to get a water well permit from the state Division of Water Resources. However, both sides in the case are backing a bill in the Legislature that would avert the chaos the ruling could cause. House Bill 1303 calls for a timeout on the need for water permits until March 31, 2010…

The opinion, written by Justice Allison Eid, appears to affect only coal-bed methane wells, [Sarah Klahn, attorney for the plaintiffs] said. But it could open the door for challenges to other types of wells…

Even if only coal-bed methane wells were affected, the applications could swamp the state engineer’s office. In anticipation of the ruling, lawmakers introduced HB 1303. The sponsors are Rep. Kathleen Curry, D-Gunnison, and Sen. Jim Isgar, D-Hesperus. Isgar and State Engineer Dick Wolfe met Monday afternoon to see if the bill needs to be changed in the wake of the court ruling. But most people think the bill will work, Isgar said. “Right now, it looks like the bill’s in good shape, and it is needed because of this Supreme Court decision,” Isgar said. HB 1303 passed the House 60-0 on April 7…

Five justices joined the majority opinion. Justice Alex Martinez did not participate, and Justice Nathan Coats dissented. Coats agreed with one part of the majority’s opinion – that the Colorado Oil and Gas Conservation Commission does not have exclusive jurisdiction over all gas and oil activities in the state.

More coverage from the Pueblo Chieftain (Chris Woodka):

The decision will have implications for the Arkansas Valley, since coalbed methane wells are operating in Las Animas and Huerfano counties…

Depending on location, water from gas-drilling operations can vary in quality. But in areas where it helps feed surface streams, it must now be treated as a “beneficial use” and part of the overall water supply, according to the ruling. Coalbed methane drilling extracts natural gas by draining coal seams, producing large amounts of water while releasing the gas. The ranchers claimed the energy wells were a threat to their own agricultural wells, which have senior water rights, because of the decline in groundwater pressure. Typically, the water taken from the coal seams in the San Juan basin was reinjected to greater depths…

The court opinion, written by Justice Allison Eid, rejected all of the state’s arguments. “The use of water in coalbed methane production is an integral part of the process itself,” Eid wrote. “The presence and subsequent controlled extraction of the water makes the capture of methane gas possible.” Justice Nathan Coats concurred, but said it is not necessary to apply the standard of “beneficial use” to the coalbed methane process in order to give the state engineer authority to regulate the gas wells.

The state was anticipating that it would lose the Supreme Court case and has been working with legislators to draft new legislation that allows the state engineer to regulate water produced by oil and gas wells, Wolfe said Monday. The bill, HB1303, has passed the House and is awaiting Senate action. HB1303 meets the issues raised in the lawsuit, said attorney Sarah Klahn, who represented the ranchers in the case. “It gives everyone a year to get their act together,” Klahn said.

More Coyote Gulch coverage here and here.

Colorado Supremes rule that coalbed methane wells must be monitored

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From the Associated Press (Judith Kohler) via Forbes:

Groundwater pumped out during coal-bed methane drilling is not just a waste product, the court said, ruling on a lawsuit by landowners who say their water supplies are threatened by companies using groundwater to free natural gas in coal seams….

The state engineer’s office and BP America Production Co. argued that water is a byproduct of drilling and should be regulated by state oil and gas rules. BP America re-injects the water it uses into the ground.

But the Supreme Court upheld a state water court ruling that the water is put to beneficial use and, therefore, is subject to state water laws. The justices rejected the argument that water pumped out while drilling gas was “merely a nuisance.”

Here’s a release from Colorado Trout Unlimited and Western Resource Advocates:

April 20, 2009
For Immediate Release
Contact: Mely Whiting, 720-470-4758
Bart Miller, 303-444-1188 x.219

Colorado Supreme Court rules in favor of ranchers, Colorado streams

In a first of its kind decision in Colorado, the Colorado Supreme Court today ruled in Vance v. Wolfe that coal bed methane producers have to adhere to the same water rules and regulations as other state water users.

For years, CBM producers were allowed to pump large amounts of tributary groundwater (groundwater connected to nearby streams) as part of their extraction operations without a water right or approvals from the State Engineer and the water courts. Water keeps the CBM in place in underground formations. When groundwater is pumped, the gas is released from the formation and can be captured by producers. CBM producers often re-inject most of the water underground, but in different, deeper formations, so the water is not available to other water users or the nearby streams as it was before the CBM operation.

A State Engineer permit and water court approval are usually required before tributary groundwater can be pumped. These approvals are designed to ensure that the water rights of others, including instream flow rights held by the Colorado Water Conservation Board, are not injured. CBM producers have for years argued that they are not “using” the water but are simply disposing of it, therefore they are not subject to these requirements.

In 2005, two ranchers and water rights owners in Archuleta and La Plata county sued the State Engineer, arguing that his failure to require British Petroleum (BP) to get permits and water court approvals to pump tributary groundwater as part of the company’s CBM production was illegal. Judge Gregory G. Lyman, the water judge in Durango, agreed and the State Engineer and BP appealed to the Colorado Supreme Court. Today’s decision affirms Judge Lyman’s decision, finding that the extraction of tributary groundwater for CBM production is a beneficial use of water subject to water rights administration and approvals by the water courts.

“This is a victory for both ranchers and our streams,” said Mely Whiting, an attorney with the conservation group Trout Unlimited, which participated in the appeal in support of the ranchers. “The decision sends a strong message that just because you are part of the oil and gas industry, you are not above and beyond Colorado water laws.”

“The court made a sound ruling based on a common-sense reading of Colorado law,” said Bart Miller, with Western Resource Advocates, also participating in the appeal by filing an amicus—“friend of the court”—brief on the appeal. “The decision implicitly recognizes the scarcity and value of water in Colorado. It’s an important decision.”

Whiting gave credit for the ruling to the Vance and Fitzgerald families, the ranchers who brought the suit, as well as to Sarah Klahn of the Denver law firm of White & Jankowski. “They did the lion’s share of work, and they deserve congratulations for this important achievement,” she said.

Trout Unlimited is the nation’s largest coldwater conservation organization, with 140,000 members dedicated to conserving, protecting, and restoring North America’s trout and salmon fisheries and their watersheds.

Western Resource Advocates protects the West’s land, air, and water. We work in collaboration with other conservation groups, hunters and fishermen, ranchers, American Indians, and others to ensure a sustainable future for the West.

More coverage from the Denver Post (Mark Jaffe):

The ruling means energy companies must prove to the state engineer that their drilling is not impinging upon senior water rights. If the methane wells do affect neighboring water supplies, companies must provide a plan for increasing those supplies. “In Colorado, water is just as important as gas, and this ruling protects water from drilling,” said Bill Vance, an Archuleta County rancher who was a plaintiff in the lawsuit…

The Colorado Oil and Gas Association said the ruling will “just add more fuel to the fire of uncertainty affecting the oil and gas business in Colorado.” About 5,000 coal-bed methane wells operate in the state, primarily in Las Animas, Archuleta and San Juan counties, according to the state. The San Juan Basin wells alone remove nearly a billion gallons of water a year, according to state data.

Vance and a neighbor, Jim Fitzgerald, filed a lawsuit in 2005 claiming that the state engineer was failing to regulate the wells under state water law. The ranches, at the foot of the HD Mountains in the San Juan Basin, depend on seeps and springs to water hay and alfalfa fields, Vance said. The plaintiffs said that energy companies benefit by removing the water to release the methane. Under Colorado law, any “beneficial use” of water needs a permit.

In oral arguments before the Supreme Court, the state Attorney General’s Office said the water removed from coal seams to get the methane is only an incidental byproduct. BP American Production Co., which operates 695 wells in the San Juan Basin affected by the lawsuit, intervened in the case to support the state.

The Supreme Court agreed with the ranchers and a lower court ruling. Five justices supported the decision, one dissented in part and one did not participate.

In a statement, BP said it was “disappointed” in the ruling but will comply with state water laws and ensure that “senior water rights are protected.” State Engineer Dick Wolfe said only wells that affect tributary streams will need a permit and only those affecting senior water rights will need augmentation plans. He said he does not expect all 5,000 methane wells to need a permit. The energy companies should not have a problem meeting their augmentation plans, Wolfe said. “These are companies with resources to develop a plan, and these operations are not in a highly urban part of the state,” he said. A bill working its way through the legislature, supported by Wolfe and water advocates, would give energy companies a year to file for the permits and until 2012 to file augmentation plans.

More Coyote Gulch coverage here and here.

H.B. 09-1303: Admin Mineral Development Water Wells

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Here’s a look at House Bill 09-1303 (Admin Mineral Development Water Wells) (pdf) from Joe Hanel writing for the Cortez Journal. From the article:

William and Elizabeth Vance and James and Mary Fitzgerald sued the state engineer’s office in 2005, claiming that coalbed methane wells were depleting their water wells. They won in a La Plata court in 2007. The case, Vance v. Simpson, is on appeal to the state Supreme Court. A ruling is expected any time. Sen. Jim Isgar and others worry the court could require every one of Colorado’s 38,000 gas wells to get a water well permit, which would overwhelm the state engineer’s office. So Isgar, D-Hesperus, and Rep. Kathleen Curry, D-Gunnison, drafted House Bill 1303, which brings coalbed methane wells into Colorado’s water rights system. Without the bill, the court decision could force the state engineer to roll all coalbed methane wells into the legal water system in two months. Other observers have said the court decision could apply to every gas or oil well in the state. “We aren’t in session until next January, and if this ruling comes out the day after we adjourn, we leave the state engineer in the position of having to approve 3,000, 4,000 wells in 60 days,” Curry said.

The House Agriculture Committee passed the bill on a 13-0 vote Wednesday, sending it to the full House…

The bill allows the state engineer to make rules for when a gas well should be treated as tapping “nontributary” water – that is, deep water that will not harm nearby water rights. For tributary wells, it allows time for gas drillers to prepare a substitute water supply plan, just like farmers use when they’re using well water for irrigation. HB 1303 puts a three-year moratorium on integrating gas wells into the water system, to give the state engineer and the gas companies time to adjust.

Coalbed methane wells pump out water before they start producing gas. The wells are especially plentiful – and rich – in La Plata and Archuleta counties. The Raton Basin near Trinidad also has many coalbed methane wells.

More Coyote Gulch coverage here, here and here.

Upper Yampa River Water Conservancy District keeping an eye on Shell’s application

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The Upper Yampa River Water Conservancy District filed a statement in opposition to Shell’s water court application for a diversion on the Yampa River, according to a report from Melinda Dudley writing for the Steamboat Pilot & Today. From the article:

The Upper Yampa Water Conservancy District filed a statement of opposition on Friday to Shell Frontier Oil and Gas’ Dec. 30 request for substantial water rights on the Yampa River. “We’re in it to look after the constituency and our district,” Upper Yampa Water Conservancy District General Manager Kevin McBride said. “It doesn’t do the Upper Yampa any good to be taking water out.” The water district is joined in its opposition by the South Routt towns of Oak Creek and Yampa. Although upstream of Shell’s proposed diversion in Moffat County, town officials worry that the company’s request could affect future water rights and development across Northwest Colorado.

The term “opposition” can be a bit misleading, McBride said. “Filing an opposition could mean anything from an entity having a real opposition to simply wanting to be notified of the proceedings,” McBride said. “If you want to be notified of the proceedings, you have to oppose.” Town officials in Yampa and Oak Creek, both of which piggybacked on the Upper Yampa Water Conservancy District’s opposition, have made it clear that their opposition is more than just a way to stay informed…

Shell’s filing would allocate the Yampa River “basically to 100 percent,” affecting future water rights, Oak Creek Trustee Josh Voorhis said Thursday, when the Oak Creek Town Board agreed to join the Upper Yampa Water Conservancy District’s pending opposition. The deadline for oppositions on the matter is today…

[Shell’s proposed reservoir] would be built off the main stem of the Yampa in the Cedar Springs Draw in Moffat County. The proposed reservoir’s potential 45,000 acre-foot size compares to the 33,275 acre-feet in Stagecoach Reservoir and 25,450 acre-feet in the newly expanded Elkhead Reservoir between Hayden and Craig.

Meanwhile the Moffat County Commission approved participation in a groundwater study proposed by the Colorado Water Conservation Board, according to a report from the Craig Daily Press. From the article:

[Moffat County Commission]: Approved, 3-0, signing a grant contract with the Colorado Water Conservation Board to hire Colorado Geological Survey to investigate local groundwater and aquifer conditions before widespread coal-bed methane development occurs locally.

Moffat County signs on with CWCB to study effects of coalbed methane extraction on groundwater

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From the Craig Daily Press (Collin Smith): “County officials are aware of issues surrounding coal-bed methane extraction in the San Juan, Raton and Piceance basins. The development has been linked to drying up water wells and streams in other places across Colorado and the Rocky Mountain west, and local officials want to be proactive before potential problems arise. With that in mind, the Moffat County Commission unanimously approved signing a grant contract with the Colorado Water Conservation Board to survey local groundwater and aquifer conditions before widespread coal-bed methane development occurs locally.”

More Coyote Gulch coverage here.