‘Colorado Supreme Court rules against holders of vested water rights inside and outside of an Indian reservation’ — Lexology

February 20, 2014
Non-Tributary coalbed methane SW Colorado via the Division of Water Resources

Non-Tributary coalbed methane SW Colorado via the Division of Water Resources

From Lexology (Daniel C. Wennogle):

In 2010 a group of water rights holders in Colorado raised a constitutional challenge to certain rules promulgated by the Colorado State Engineer’s Office regarding the designation of certain ground water resources as “nontributary.” The particular groundwater resources were located, in part on an Indian reservation, and the State Engineer’s determination was a part of an effort to promulgate rules regarding the permitting and regulation of oil and gas wells that extract groundwater in Colorado.**

The rule in dispute, referred to as the “Fruitland Rule,” was part of a set of “Final Rules” promulgated by the State Engineer under its authority granted by HB 09-1303, codified at C.R.S. § § 37-90137, 37-90-138(2), and 37-92- 308(11) (C.R.S. 2009). The Fruitland Rule related to underground water in a geologic formation called the Fruitland Formation, which extends into the Southern Ute Indian Reservation. The Final Rules, which included the Fruitland Rule, contained a provision stating:

These rules and regulations shall not be construed to establish the jurisdiction of either the State of Colorado or the Southern Ute Indian Tribe over nontributary ground water within the boundaries of the Southern Ute Indian Reservation as recognized in Pub. L. No 98-290, § 3, 98 Stat. 201 (1984).

The Plaintiffs argued that the above-quoted provision in the Final Rules effectively divested the State Engineer from having jurisdiction to, among other things, designate water as nontributary in its rulemaking process. The trial court had agreed with this position, and stated that the State Engineer did not prove its authority. The Court of Appeals, however, reversed and held that the State Engineer’s authority came from HB 09-1303, which “authorized the State Engineer to promulgate the Final Rules to delineate nontributory groundwater extracted in oil and gas production throughout the state” of Colorado.

The Court of Appeals held that nothing about the above- quoted statement in the Final Rules did or could divest the State Engineer of this authority.

The Court of Appeals noted that its decision would not prevent a constitutional challenge to the Fruitland Rule based upon discriminatory application, if facts warranted.

More coalbed methane coverage here and here.

‘The Front Range is thirsty. They want our water, and they’ve taken it’ — J. Paul Brown

November 11, 2013


From The Durango Herald (Brandon Mathis):

…La Plata County sheep and cattle rancher J. Paul Brown addressed a crowd of about 40 people at Christina’s Grill & Bar on Saturday morning to announce his plans to retake the House seat he lost by two percentage points in 2012 to Durango attorney Mike McLachlan. He called the district, which includes La Plata, Archuleta, Hinsdale, Ouray and a portion of Gunnison counties, one of the most beautiful places in the world and one of great importance to the state and nation.

“We are the pull of all of Colorado,” he said. “Tourism, mining, gas and oil, hospitals. It’s a wonderful district.”

While Brown, a Republican, said he is not yet ready to propose specific legislation, he did say he had a long list of issues and possible bills…

“Water is an issue here, and it always will be,” he said. “The Front Range is thirsty. They want our water, and they’ve taken it.”

Brown mentioned water-storage initiatives to keep water on the Western Slope and in the state.

“Six hundred thousand acre feet of water just went to Kansas and Nebraska,” he said. “That’s our water – we just don’t have any way to keep it.”[...]

La Plata County Planning Commissioner and beef rancher Wayne Buck supports Brown’s ideology. He called Brown a politician of moral fiber and character.

“He’s honest, and Lord knows we need honest politicians in Denver and in Washington, D.C.,” Buck said.

From The Denver Post (Kurtis Lee):</p.

Steve House, a healthcare consultant from Brighton, will announce his candidacy for governor Monday in Adams County…

House is now among five Republicans vying to unseat Democratic Gov. John Hickenlooper in 2014. Sen. Greg Brophy of Wray, Secretary of State Scott Gessler, former state Sen. Mike Kopp and former U.S. Rep. Tom Tancredo have all announced their candidacies for governor.

More 2014 Colorado Election coverage here.

Coalbed Methane: ‘The reason I go to meetings like this is so someone might listen to me’ — Brett Corsentino

April 27, 2013


From The Pueblo Chieftain (Chris Woodka):

For most of two days, Brett Corsentino sat quietly listening to theoretical discussions about the relationship of oil and gas drilling to water. For him, however, there is a much more direct and personal link. Toward the end of the Arkansas River Basin Water Forum, he spoke up about how he believes gas drilling has brought tainted water from under the ground and to the surface, where it ruined his land. He also feels he has hit a brick wall trying to get the state to make things right. “The reason I go to meetings like this is so someone might listen to me,” Corsentino said.

Instead, he got into a public argument with Peter Gintautas, an environmental protection specialist from the Colorado Oil and Gas Conservation Commission. “We have a difference of opinion over whether remediation on my land has failed,” Corsentino said. “Not a single representative from COGCC has come out to verify that remediation has taken place.”

“The agency has taken its final action, and offered other courses of action if you disagreed with staff,” Gintautas replied.

For Corsentino, it was another in a long string of disappointments. A fourth-generation dairy farmer, he milks about 400 head of cattle and employs 14 at his dairy east of Walsenburg. Over nearly a decade, beginning in 1998, Petroglyph Energy pumped about 100,000 acre-feet of highly saline water into the Cucharas River while exploring for gas. The company agreed to some remediation by supplying gypsum to reduce salinity, but Corsentino still is dealing with the damage. “They say it will take time and a lot of water to reverse the damage. I don’t have either,” Corsentino said, while giving a windshield tour of the 300 acres of fields that lie fallow.

A reservoir above the fields is dry, partly because of a three-year drought, but also — Corsentino believes — because the gas drillers took so much water out of the aquifer. He also blames poor water quality for low resistance to tuberculosis, which infected his entire herd a few years ago. He is now building a new herd. “This problem continues and I just want to know what a person is supposed to do,” Corsentino said.

From The Pueblo Chieftain (Chris Woodka):

Two tables side-by-side outside the meeting room at the Arkansas River Basin Water Forum this week told the story. One table featured an array of handouts touting the benefits of produced water, monitoring programs by Norwest on behalf of Pioneer Natural Resources and pleas for science-based watershed protection. The other counteracted the display next door with informational handouts from groups that highlighted the dangers of fracking, warned about health concerns from produced water and expressed alarm at how much water could be used.

Inside the meeting room, proponents and opponents of gas drilling shared the stage. “There are issues of water quality and quantity,” said Alan Curtis, a partner in the White-Jankowski law firm, who highlighted the dangers of oil and gas drilling. Locally, those include wells that had exploded, caught fire or have caused pollution. The current practices of oil companies involve using large amounts of dangerous chemicals that companies try to downplay by talking about percentages, he said. White-Jankowski, in the 2009 Vance v. Wolfe case, obtained a Supreme Court ruling requiring the state engineer to administer oil and gas wells in the same way that water wells are regulated.

From other presentations, it became clear that state regulation is fragmented when it comes to water and gas drilling. In one session, staff members of the Division of Water Resources and Colorado Oil and Gas Conservation Commission were unable to answer some questions from local concerned citizens, because they involved the Colorado Water Quality Control Commission instead.

Industry spokeswoman Sarah Landry sought to dispel “myths” about fracking, saying hydraulic fracturing of oil and gas wells goes back to 1947. She said the chemicals used in the process are the same type as found in most households. While some opponents say there are hundreds of potentially harmful chemicals in use, less than a dozen might be employed at any given drilling operation, she explained.

More coalbed methane coverage here and here.

‘They ruined my way of life, and the state agencies turned a mute ear to my complaints’ — Brett Corsentino

March 17, 2013


From The Pueblo Chieftain (Chris Woodka):

The damage to farm ground caused by water released from gas wells has been lasting while state protection has proven elusive for Huerfano County dairy farmer Brett Corsentino. “I can’t raise feed and I can’t hold anyone accountable. The bottom line is that the state agencies failed to protect me,” Corsentino said. “It’s all about the money these gas companies have. There’s no way to pierce the corporate veil.”

Corsentino farms is in the Cucharas River basin, which is north of the Apishapa and Purgatoire river basins where oil and gas exploration is most active in Southern Colorado. Pioneer Energy and XTO Energy are active in the lower watersheds. They are engaged in studies to show the water quality is sufficient in some cases for release into streams. Some landowners in the Apishapa and Purgatoire watersheds have asked the Colorado Department of Health and Environment to allow CBM releases.

But Corsentino said he was blind-sided by releases from Petroglyph Energy that began in the Cucharas basin in the late 1990s. He claims the water was high in salts and barium, which broke down the soil on his farm. “I used that water and put it on my fields, but didn’t know about (the releases) until 2006,” he said.

The productivity of his soil fell to one-third of its former level, and one-time soil amendments were paid for by Petroglyph. But the state never followed up with testing, and the Oil and Gas Commission said he had proven damage. “It was a joke. Sucks to be me,” Corsentino said.

His warning to other landowners is clear. “There have been four generations of my family here since my greatgrandfather came over from Sicily in 1905. It’s a hard life. We’ve taken care of the ground and it’s taken care of us,” Corsentino said. “We’ve gone through a reorganization, and I’ve lost the equity. At this point, I just want to be able to raise feed for my animals.”

From The Pueblo Chieftain (Chris Woodka):

Some Las Animas County farmers and ranchers in the Apishapa River basin are concerned that releases of water from oil and gas drilling could render cropland useless. They want water tested — and even treated — before it is released into the river system, saying the danger of increased salinity outweighs any benefit of more water during a drought. “Our main concern is that what happened in Huerfano County doesn’t happen to our soil,” said Gary Waller, who holds senior water rights for fields he irrigates near Aguilar. “We want to be proactive and make sure we do not get contaminated.”

Ken Valentine, whose family irrigates further up in the basin, said a spring above one of its fields was potentially contaminated by a release from coal-bed methane drilling last year. He is also alarmed that CBM water is routinely sprayed on gravel roads throughout the area. “The water should be treated before it’s released into the watershed, either at the company’s expense or those people who are using it for things like livestock ponds,” Valentine said.

They want to avoid the types of troubles Huerfano County dairy farmer Brett Corsentino experienced when Petroglyph Energy dumped CBM water into the Cucharas River in the late 1990s. Water high in salinity and barium ruined his farm ground. “I was harvesting 18-21 tons of corn silage per acre before, and it dropped to six tons after,” Corsentino said. “They ruined my way of life, and the state agencies turned a mute ear to my complaints.”

While the Colorado Oil and Gas Conservation Commission required Petroglyph to stop dumping water in 2006 and to help Corsentino try to restore farmland, it ruled in 2011 that Petroglyph no longer had any liability. All say the state should be insisting the water produced by Pioneer Natural Gas in the Apishapa River basin is either of equal quality to surface water, and reinjected into deep wells if it fails to meet standards.

While some in the area contend the water is suitable for livestock and wildlife, the farmers fear it will contaminate their fields — particularly during a drought when there is less natural surface water to dilute the effects. “If the water is good, it should be utilized,” Waller said. “But if it’s not, it will get into the groundwater and onto our place eventually.”

Meanwhile, oil and gas producers in the Purgatorie River watershed have asked the state to relax standards for discharged water. Here’s a report from Steve Block writing for The Trinidad Times. Here’s an excerpt:

A leader of a regional environmental protection group said she’s deeply concerned about the possible lowering of water quality standards in the Purgatoire River Watershed, and asked the Las Animas County Board of Commissioners to write a letter to the Colorado Water Quality Commission, protesting the potential change.

Paula Ozzello of the Southern Colorado Environmental Council (SCEC) spoke at Tuesday’s board work session about the potential dangers of the reduction in water quality standards.

Ozzello, chairperson of SCEC, said XTO Energy and Pioneer Natural Resources have proposed to the commission a reduction in water quality standards for the Lower Arkansas River Basin, specifically the Purgatoire River Watershed and the Apishapa Watershed. She said the XTO and Pioneer proposal would reduce the surface water quality standard, by increasing the allowable level of boron in water used for agricultural purposes from its present level of 0.75 milligrams (mg) per million to a new, and higher, standard of 5.0 mg per million.

More coalbed methane coverage here and here.

CWCB: State of Colorado Receives Partners in Conservation Award

October 18, 2012


Here’s the release from the Colorado Water Conservation Board (Ted Kowalski):

The State of Colorado, as well as the other cooperating partners in the Colorado River Supply and Demand Basin Study (“Colorado River Basin Study” or “Basin Study”), were presented today with the prestigious “Partners in Conservation Award” by the Department of the Interior. This award was presented by Deputy Secretary David Hayes in recognition of the cooperation between these different entities on one of the most pressing natural resources issues in the Unites States–the future of the Colorado River basin.

The Colorado River Basin Study is the most comprehensive effort to date to quantify and address future supply and demand imbalances in the Colorado River Basin. The Basin Study evaluates the reliability of the water dependent resources, and also outlines potential options and strategies to meet or reduce imbalances that are consistent with the existing legal framework governing the use and operation of the Colorado River. To date, the Basin Study has published a number of interim reports and appendices, and the final report of the Basin Study is scheduled to be published by the end of November, 2012.

Jennifer Gimbel, Director of the Colorado Water Conservation Board, and Ted Kowalski, Chief of the Interstate, Federal and Water Information Section of the Colorado Water Conservation Board accepted the award on behalf of the State of Colorado. “The Basin Study reflects the cooperative spirit in which the Colorado River Basin States have worked since the adoption of the 2007 Interim Guidelines,” Gimbel said.“Colorado and the other Basin States, the tribes, the federal government, and the many diverse stakeholders must continue to work together in order to address the difficult water imbalances facing the southwestern United States in the next half century. It is clear that there are no silver bullets, but rather we must explore and develop multiple options and strategies in order to meet our projected future water supply/demand imbalance.”

More Colorado River Basin coverage here.

‘Water Wranglers’ is George Sibley’s new book about the Colorado River District #coriver

October 10, 2012



Here’s the link to the web page where you can order a copy. Here’s the pitch:

Water Wranglers
The 75-Year History of the Colorado River District:
A Story About the Embattled Colorado River and the Growth of the West

The Colorado River is one of America’s wildest rivers in terms of terrain and natural attributes, but is actually modest in terms of water quantity – the Mississippi surpasses the Colorado’s annual flow in a matter of days. Yet the Colorado provides some or all of the domestic water for some 35 million Southwesterners, most of whom live outside of the river’s natural course in rapidly growing desert cities. It fully or partially irrigates four-million acres of desert land that produces much of America’s winter fruits and vegetables. It also provides hundreds of thousands of people with recreational opportunities. To put a relatively small river like the Colorado to work, however, has resulted in both miracles and messes: highly controlled use and distribution systems with multiplying problems and conflicts to work out, historically and into the future.

Water Wranglers is the story of the Colorado River District’s first seventy-five years, using imagination, political shrewdness, legal facility, and appeals to moral rightness beyond legal correctness to find balance among the various entities competing for the use of the river’s water. It is ultimately the story of a minority seeking equity, justice, and respect under democratic majority rule – and willing to give quite a lot to retain what it needs.

The Colorado River District was created in 1937 with a dual mission: to protect the interests of the state of Colorado in the river’s basin and to defend local water interests in Western Colorado – a region that produces 70 percent of the river’s total water but only contains 10 percent of the state’s population.

To order the book, visit the Wolverine Publishing website at http://wolverinepublishing.com/water-wranglers. It can also be found at the online bookseller Amazon.

More Colorado River District coverage here.

CWC Summer Conference: ‘The money available for infrastructure projects, especially for water, is going to be very challenging’ — Carl Steidtmann

August 19, 2012


From Steamboat Today (Frank Ameduri):

“The real issue here with water is, ‘What are we going to do about it?’” Carl Steidtmann said. “The problem is our government entities are deeply in debt.”

Steidtmann, a Steamboat Springs resident who is chief economist for Deloitte, was the lunchtime speaker during the 2012 Summer Water and Energy Conference at the Sheraton Steamboat Resort on Wednesday. The three-day conference goes through Friday and is put on by the Colorado Water Congress. There are 240 people registered for the conference, and attendees include local politicians, state legislators and representatives from water conservancy districts, water departments and municipalities across the state.

Steidtmann’s keynote Wednesday was titled “The Regional Impact of the National Economy: Letting Go of the Status Quo for Water and Energy.”[...]

Steidtmann, who consults with Fortune 500 companies, said water is becoming an increasingly important issue for energy companies because of its increasing scarcity. To illustrate this point, he showed a map forecasting water availability in 2025. “The western part of the U.S. becomes one of those areas of critical water shortages,” Steidtmann said.

In an era of a contracting government where more money is being spent to pay off debt, Steidtmann said infrastructure projects are the ones that are easy to delay. “The money available for infrastructure projects, especially for water, is going to be very challenging,” he said.

From The Pueblo Chieftain (Chris Woodka):

“Environmentalism is a luxury good,” said Carl Steidtmann, chief economist for Deloitte Services. “Richer countries are more environmentally conscious.” In his view, poorer nations are more focused on the need to survive, and have a greater impact on the environment as populations grow. It takes money to protect the environment, he said. Energy development has been the greatest factor in the divide between rich and poor nations, but in the future, the availability of food and water will also have economic consequences, he said.

From The Pueblo Chieftain (Chris Woodka):

“We need to make sure the most water goes to the hottest fires,” said Reeves Brown, executive director of the Colorado Department of Local Affairs. He was among state officials who discussed water project funding last week at the summer convention of the Colorado Water Congress. There is an estimated $5 billion backlog in about 1,000 community water projects across the state.

Mineral severance or federal lease fund revenues are a major source of funds for Colorado water projects to provide drinking water or treat wastewater. Since 2008, the state has looked toward those cash funds to make up shortfalls in other budget areas, particularly health care, education and prisons.

About $250 million over four years in funds that would have gone to local impact grants through DOLA have been diverted. That money would have leveraged three times as much in other grants or loans, Brown said. The Colorado Water Conservation Board has seen $163 million of construction funds diverted during the same period, while making about $80 million in loans to water projects.

More infrastructure coverage here.

Steamboat Springs: Colorado Water Congress Summer Conference August 15 – 17

July 9, 2012


Here’s the link to the registration page. Here’s the description of the event (Meg Meyer):

The 2012 Colorado Water Congress Summer Conference will include water and energy interests once again as we combine forces and explore areas of common interest. The theme of the conference is The Balance of Power. We will spin the concept several different ways as we look at the balance of political power, the balance of governance, and the balance of energy and water sources.

Immediately preceding the CWC Summer Conference, the Colorado Coal and Power Generation group will hold an all-day event at the Holiday Inn in Craig on Tuesday, August 14th which will include a golf tournament and evening barbeque.

In addition, the Interim Water Resources Review Committee will meet in Steamboat, Tuesday afternoon, for their first substantive meeting to prepare for the 2013 legislative session.

The CWC Summer Conference will be held August 15th through August17th at the Sheraton in Steamboat Springs.

We will have three workshops on Wednesday morning covering topics of drought and current weather conditions, public trust, and endangered species. We will try something a little different this year with the conference kicking off with a luncheon on Wednesday. General Sessions will follow on Wednesday afternoon. An evening open public forum will held on Wednesday at 7:30 pm (attendance is optional for water and energy professionals).

We will have networking breakfasts on Thursday or Friday – a light continental breakfast will be served, but no formal speaker. The hotel restaurant or other local venues are available for those that prefer a heartier breakfast. General Sessions will be held on Thursday from 9:00 to 12:00. On Thursday afternoon, we will offer a couple of tours or you may want to use this time to catch up on other business. The POND Committee is also planning outdoor activities. We will have a reception on Thursday evening at 5:00. The Friday morning format will be similar to Thursday and the conference will conclude with a box lunch.

Colorado River Basin: What are the reasonable water management options and strategies that will provide water for people, but also maintain a healthy river system?

December 25, 2011


Here’s a guest commentary written by Eric Kuhn, David Modeer and Fred Krupp running in The Denver Post. The trio are issuing a call to arms of sort, asking for input for the Colorado River Basin Study. Here’s an excerpt:

Management of the Colorado River is a complex balancing act between the diverse interests of United States and Mexico, tribes, the seven basin states, individual water users, stakeholders, and communities. The challenges posed by new growth and climate change may dwarf anything we faced in the past. Instead of staring into the abyss, the water users, agencies, and stakeholder groups that make managing the Colorado River responsibly their business are working together, using the best science available to define the problem, and looking for solutions.

We’re calling our inquiry the Colorado River Basin Study, and we want your help. As Colorado River management professionals, we have a lot of knowledge and ideas, but we know that we don’t have them all. We want ideas from the public, from you, but we need your input by February 1. You can submit your suggestions by completing the online form at: http://on.doi.gov/uvhkUi.

The big question we need to answer is: What are the reasonable water management options and strategies that will provide water for people, but also maintain a healthy river system? We don’t believe there’s a single silver bullet that will resolve all of our challenges. We want to continue to explore the benefits and costs of every possibility, from conservation to desalination to importing water from other regions.

The West was built on innovation and hard work, and that spirit is still strong. Our landscapes and communities are unparalleled in their beauty, resilience, and character. The economic well-being of our rural and urban communities in the Colorado River basin is inextricably linked to Colorado River and its environmental health.

That’s why we are asking for the public’s input to help us craft a study showing a path forward that supplies our communities with the water they need to thrive and protects the health of the Colorado River-and the ecosystems and economies it supports.

More Colorado River basin coverage here.

Energy policy — coalbed methane: The state of Colorado and the Southern Ute Tribe are considering their options in light of Judge James Hartmann’s ruling last Thursday

September 13, 2011


From the Associated Press (Catharine Tsai) via The Albuquerque Journal. From the article:

The judge last week upheld rules by the state engineer that allowed some oil and gas wells in the state to be exempt from getting water well permits for their operations, but he also said the rules shouldn’t apply within the Southern Ute reservation because it is unclear who has jurisdiction over water…

Despite the ruling last week upholding the rules, [Colorado First Assistant Attorney General John Cyran] told The Durango Herald (http://bit.ly/qrNKDV) the state was considering whether to ask the judge for a clarification of part of the ruling that said the state engineer’s rules should not apply within the Southern Ute reservation. “I don’t think there was any problem with us passing that rule because I do think we have authority there,” Cyran said.

More coalbed methane coverage here and here.

State Engineer’s rules for non-tributary coalbed methane produced water affirmed by water court

September 10, 2011


Here’s an in-depth look at Thursday’s decision by Water Court Division One Judge James Hartmann, from Joe Hanel writing for The Durango Herald. Their headline asks the question, “Did gas industry win water ruling?” From the article:

Judge James Hartmann of the water court in Greeley ruled in favor of State Engineer Dick Wolfe, who adopted rules in 2010 that allowed his office to avoid detailed regulation of the water use by many of the 40,000 gas and oil wells in Colorado. However, he threw out the portion of the rules that covers the Southern Ute Indian Reservation, where most of the region’s gas drilling occurs…

Until the Vance ruling, the industry and state regulators had treated the water as a waste product that did not need to be regulated under Colorado’s complicated set of water laws.

Fearing a deluge of 40,000 well permit applications, the Legislature gave the state engineer the authority to decide which gas wells are so deep they will not hurt other people’s water rights, and which ones need stricter scrutiny, including plans to replace the water they use.

The Vances, Fitzgeralds and many others sued again, but on Thursday, the judge upheld most of the rules Wolfe adopted. “For the most part, I think it was a good ruling for the state,” said First Assistant Attorney General John Cyran, who defended the state engineer’s office in the lawsuit.

But the plaintiffs also are happy about the ruling because of one paragraph near the end. In that paragraph, the judge declared the rules apply only to the use of water in gas and oil drilling, and they can’t be used in court to win a water right for the industry. “That is the main event, believe it or not,” said Sarah Klahn, a lawyer for the plaintiffs…

However, Hartmann’s ruling leaves much of Southwest Colorado in a legal limbo.

Although the judge upheld the state engineer’s rules statewide, he ruled that they should not apply within the boundaries of the Southern Ute Indian Reservation because it is unclear who has jurisdiction over water. Lawyers for the state and the tribe said they are considering appealing that portion of Hartmann’s ruling or at least asking him for clarification. “We were surprised by the decision,” said Adam Reeves, a lawyer for the Southern Ute tribe. “We’re evaluating our next step.”

Here’s the link to Coyote Gulch when the original ruling was announced. Scroll down to the end of the page for the article.

More coalbed methane coverage here and here.

State Engineer’s rules for non-tributary coalbed methane produced water affirmed by water court

September 9, 2011


From the Associated Press (Catharine Tsai) via Loveland Reporter-Herald:

…the rules’ challengers are cheering because the ruling Thursday also said those determinations don’t have any legal effects outside of decisions on water well permits…

The San Juan Citizens Alliance and others had challenged the rules [ed. for non-tributary wells], which were adopted after a court decision on water pumped out during coalbed methane drilling. That decision said the water wasn’t just a waste product. Therefore companies for 40,000 existing wells that withdraw water during drilling potentially had to get water well permits or file plans for replacing the water if senior water rights holders were affected.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Water Court Division Seven judge dismisses BP America and others applications

June 20, 2011

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From the Associated Press via The Denver Post:

The Durango Herald reports BP America Production Co. and others had sought claims to nontributary groundwater, which isn’t considered connected to surface streams. Water Judge Gregory Lyman said last month that state law gives landowners the right to such water under their property, so companies need landowners’ consent first.

More coalbed methane coverage here and here.

2011 Colorado legislation: HB 11-1286 (Clarify State Engineer Nontributary Rule Authority) passes state Senate

April 20, 2011

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From The Durango Herald (Joe Hanel):

House Bill 1286 tells the courts to give deference to state water regulators, who adopted maps last year to show when gas and oil wells need to be given greater scrutiny to make sure they don’t injure the water rights of nearby landowners. Farmers and ranchers have sued the state over the rules, saying they are a giveaway to the gas industry. HB 1286 passed 35-0, and the bill is now on its way to Gov. John Hickenlooper.

More 2011 Colorado legislation coverage here.

2011 Colorado legislation: HB 11-1286 (Clarify State Engineer Nontributary Rule Authority) sails through the state House

March 29, 2011

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Click here for Joe Hanel’s analysis of the bill from The Durango Herald.

More coverage from Patrick Malone writing for The Pueblo Chieftain. From the article:

Under HB1286, Water Court would be the last line of appeal for decisions by the state engineer. The bill arose in response to a 2009 Colorado Supreme Court ruling that found oil and gas wells are subject to the tributary water permitting process. Supporters of the bill have said it would streamline the permitting and appeal processes. In a committee hearing, an opponent objected that it represents legislative side-stepping of the high court. Next, the bill will be heard by a Senate committee.

More HB 11-1286 coverage here.

2011 Colorado legislation: HB 11-1286, Clarify [State Engineer] Nontributary Rule [Authority]

March 22, 2011

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From The Pueblo Chieftain (Patrick Malone):

The House Agriculture, Livestock and Natural Resources Committee voted 13-0 to adopt HB1286, sponsored by Reps. Jerry Sonnenberg, R-Sterling, and John Becker, R-Fort Morgan. The bill aims to streamline the decision-making process on water permits. A 2009 Colorado Supreme Court decision found that water used in coal-bed methane natural gas extraction is subject to the requirements of tributary water permitting. The ruling granted Water Courts authority over permitting conflicts and appeals…

Nontributary water can be exempt from permitting, Following the court’s ruling, the state engineer developed rules to govern permitting within the framework of the court’s decision, and developed a map that reflects extraction operations subject to permitting under it. Among them were some wells in the Raton Basin near Trinidad. Under HB1286, the state engineer’s rules would be acknowledged in statute, appeals of permit decisions would be routed through the rule-making process instead of through Water Court and further appeals of those decisions to a Water Court would require a higher standard of proof to overturn earlier rulings in the chain of appeals.

The chief opponent of the bill to testify Monday was lawyer Philip Lopez of the firm White & Jankowski, which represents the plaintiffs who were victorious in the 2009 case. He characterized the bill as an attempt to legislate around judicial decisions, argued the ruling has not led to the shutdown of any gas wells and said the state engineer’s map confers by default a water right to the oil and gas industry that other water users must follow process to attain.

More coverage from Joe Hanel writing for The Durango Herald. From the article:

House Bill 1286 raises the legal standard the ranchers will need to prove to win their lawsuits against State Engineer Dick Wolfe. Last year, Wolfe drew maps that showed which gas and oil wells needed to get water permits and which ones could drill without going to court to fight about who owns the water…

The Vance and Fitzgerald families took Wolfe’s office to court several years ago for not protecting their water rights from gas wells, and they won at the state Supreme Court in 2009. The ruling shocked the gas industry, and legislators worried all 40,000 gas and oil wells in the state would need to get water permits. So they gave Wolfe’s office the power to draw maps that show where gas wells interact with surface water. Gas wells outside the zone do not need to replace the water they use because the water is assumed to be so deep underground that it will have no effect on surface streams.

But the Vance and Fitzgerald families sued again, along with the San Juan Citizens Alliance, the Oil and Gas Accountability Project and the city of Sterling. Several lawsuits are active, and the main one is working its way through the water court in Greeley…

Mike King, director of the Department of Natural Resources, urged legislators to pass the bill. Wolfe’s office is in King’s department, and King cited the extensive work the engineer’s office did to draw the maps. “What we’re asking is an affirmation of that to remove all doubt,” King said. “This is critical that we resolve this issue and that it doesn’t get litigated and then appealed to the Supreme Court, and we have a two-year window of uncertainty that would not be good for oil and gas production in Colorado.”

More 2011 Colorado legislation coverage here. More coalbed methane coverage here and here.

Energy policy — oil and gas: Coalbed methane produced water update

March 15, 2011

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From The Trinidad Times (Randy Woock):

The Colorado Oil and Gas Conservation Commission’s (COGCC) annual report to the Water Quality Control Commission and Water Quality Control Division of the Colorado Department of Public Health and Environment stated that the 2,055,900,000 gallons (6,309.3 acre feet) of produced water extracted by CBM wells in Las Animas County comprised 89 percent of the region’s produced water in the first half of 2010. The produced water amounts were reported in terms of barrels, with each of the 48,950,000 barrels extracted in Las Animas County equivalent to 42 gallons. A total of 55 million barrels of produced water were extracted by CBM operations in southeastern Colorado during the first half of last year. “There’s still numbers coming in for 2010,” COGCC Environmental Manager Debbie Baldwin said. “Those final numbers (for a 2010 produced water total) haven’t been published yet.”[...]

The most recent produced water figures are a drastic decline from previous years. The fiscal year (FY) 2009-2008 report showed 462,4746,197.4 gallons of produced water generated from Las Animas County wells, and the FY 2007-2008 reported 6,454,568,642.3 gallons of produced water in the area, though that amount was from a combined Las Animas and Huerfano counties calculation. The FY 2006-2007 report showed 7,127,366,514 gallons of produced water from CBM wells in Las Animas and Huerfano counties…

“Approximately 70 billion cubic feet of gas was produced in this region (southeastern Colorado) during the first six months of 2010, with 84 percent of the gas produced from the 2,906 CBM wells in Las Animas County,” the COGCC report stated. “Approximately 212 drilling permits were issued for oil and gas wells in southeastern Colorado in 2010. Approximately 82 percent of the 212 were issued in four counties (41 percent in Las Animas, 23 percent in Lincoln, 11 percent in Fremont, and 8 percent in Cheyenne).”

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Las Animas County producers implement substitute water supply plans for produced water

March 11, 2011

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From The Trinidad Times (Randy Woock):

Las Animas County’s four largest gas companies — Pioneer Natural Resources, El Paso E&P Company, XTO Energy and Red River Ranch Holdings — have implemented SWSPs in order to continue gas production in the about 3,068 CBM wells operating within the central Raton Basin. Industry activities in the area discharge from CBM wells a combined total of about 10 million gallons of produced water per day. The SWSPs were approved by the State Engineer’s Office through March 31, 2011 and are nearing the end of their first approved year of implementation. The SWSPs call for replacement water to come from, “a lease with the City of Trinidad to supply up to 50 acre-feet of fully consumable water from the city’s storage account in Trinidad Reservoir.”[...]

A summer 2009 decision by the Colorado Supreme Court in the Vance v. Simpson case determined that the groundwater produced during CBM drilling production, previously considered a waste by-product, was of “beneficial use,” and thus had to undergo permitting and comply with Colorado groundwater laws. The state then passed an authorization for the State Engineer’s Office to approve alternates such as SWSPs in place of augmentation plans. That authorization for alternates extends from March 31, 2010 to Dec. 31, 2012 in order to provide energy companies in Colorado with extra time to integrate CBM wells that withdraw waters considered tributary and that impact “over-appropriated” streams into the state water court’s adjudication process.

Colorado Division of Water Resources Division 2 Engineer Steve Witte told The Times Independent that the Division had turned down initial requests by the companies to utilize the non-tributary water component of the CBM produced water as a replacement source. “The concern that we have is the native tributary water supply that water rights along the Purgatoire (River) depend upon are not diminished by the withdrawal of groundwater,” Witte said. “The initial proposal was that, of the water that they withdraw from the coal beds, they determined that a portion is tributary and a portion is non-tributary, and they thought that they would simply rely on the non-tributary water as a replacement for the stream depletions that were calculated.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Two Rivers Water Company inks MOA with Petroglyph Energy to study treating coalbed methane produced water

October 12, 2010

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From TradingMarkets.com:

Two Rivers Water Company, a company focused on acquiring and developing water, farming and alternative energy in southern Colorado, and Petroglyph Energy, Inc., an Idaho corporation, announced today they have entered into a non-binding Memorandum of Understanding to complete a feasibility study for the treatment of produced water originating from coal bed methane production in Huerfano County, Colorado.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: State Engineer’s Office forum recap

October 4, 2010

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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.

More coalbed methane coverage here and here.

Energy policy coalbed methane: Aguilar town council hears presentation about coalbed methane well produced water

September 30, 2010

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From The Trinidad Times (Randy Woock):

A presentation at the town council meeting on the water monitoring had been arranged, Pioneer’s Senior Public Relations Advisor, Karen Brown, told the meeting’s attendees, “So you all could hear more about what it is we do to protect the water that is coming off of the discharges CBM production…the intent (of the presentation) is to open the discussion, provide some information about how Pioneer is approaching this, that we want to approach it from a scientific perspective and have documentation to prove that, in fact, water is, in fact, within its permit limits.”

Pioneer has been discharging around the Apishapa River since 2005, though none of its four outfalls are on the Apishapa River’s mainstem. Pioneer is currently discharging at a rate of 1.8 acre-feet of water, or 600,000 gallons, per day. Pioneer has about 2,450 wells in the basin. The National Pollution Discharge Elimination System permit it has applied for, according to Pioneer’s senior energy environmental advisor, Gerald Jacob, would allow for a maximum surface discharge amount of 999,999 gallons per day.

The discharge permitting process begins with the preparation of a draft permit, of which are considered possible impacts of the proposed discharge levels, measured against the water quality standards as adopted by the Water Quality Control Commission. The standards consider variables like effluent limits based on in-stream water quality, the quality and types of expected effluents coming from the discharge facility and as well as impacts on the stream at extreme low-flow periods…

The three monitoring stations deployed on the Apishapa River — at Lisonbee, Eichler and Nations — were placed and are monitored by the Norwest Corporation, a environmental consulting firm specializing in hydrology. Norwest’s stations monitor in 15-minute intervals water levels and salinity at their deployment points, as well as conducting flow measurements and water quality sampling every two weeks. Processed data and the resultant charts are uploaded to the website, apishapawatershed.org, after several weeks, though each station also contains a direct display that updates every minute. “I really encourage you to use the website, and if you’re concerned and you want to keep track of stuff…we post all the lab data results, we’re comparing it to what we’re finding in the stream…it’s a really useful tool,” Hyrdrologist Angela Welch of Norwest said. “We really are trying to help you guys out by protecting your assets, which is your stream.”

More coalbed methane here and here.

Energy policy — Coalbed methane: State Engineer’s produced water rules lawsuit(s) update

August 31, 2010

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From The Durango Herald (Joe Hanel):

The case, Vance v. Wolfe, earned plaintiffs Bill and Elizabeth Vance a spot in the history of Colorado water law. The fellow plaintiffs, Jim and Theresa Fitzgerald, of Bayfield, celebrated the ruling as a protection of their water rights and the springs they worked for decades to restore to health. But the Legislature’s bill led to a chain of events that has everyone back in court this summer to fight out three new lawsuits…

The Legislature did two things: It gave the engineer’s office until Aug. 1 this year to process the permits, and it allowed State Engineer Dick Wolfe to make rules that exclude gas wells drilled into deep formations from the need to obtain water permits. Wolfe held hearings last year and early this year and eventually decided that many wells in the San Juan Basin don’t need permits. In general, the wells farther north, closest to where the coal formations climb to the surface, still need water permits.

Sarah Klahn, a water lawyer for the Vance and Fitzgerald families, said the rules threaten to undo the significant victory of the Vance case. Klahn and fellow lawyer Alan Curtis filed two new lawsuits against Wolfe for adopting the rules. The first one will be heard in Greeley this year. It claims the state engineer illegally adopted the rules without notifying landowners that their water might be at risk. “The real people who stand to be injured on the ground because of this stuff did not get notice,” Curtis said.

Their first legal notification that something was up was the huge water-rights application to state Water Court by gas companies that landowners got in the mail this year, he said. They are not alone in the fight this time. Other plaintiffs include heavyweights like the Denver Board of Water Commissioners, the cities of Boulder, Centennial and Sterling, and several other water users.

The second lawsuit, filed in Durango, challenges the map that Wolfe used to decide which wells to regulate. Gas companies paid for the expert who drew the map, and it leaves out wells that should face scrutiny from water regulators, Klahn and Curtis say.

A third lawsuit takes the fight to all of Southwest Colorado. In February, the state engineer amended the rules to include other geological formations, including the shales found in Montezuma, Dolores and western La Plata counties. The rules determined that groundwater in the Paradox formation – which covers a wide swath of Southwest Colorado – is nontributary, meaning gas companies will not have to prepare expensive plans to replace the water they use in their wells. The area has not been drilled for gas yet, but the rocks hold a potentially large amount of shale gas, so it could become an important drilling area in the future. Durango water lawyer Amy Huff filed a separate lawsuit on behalf of several local landowners to challenge the rules over the Paradox formation and other geologic layers. Huff said the state engineer has not done enough to prove that gas companies can take water out of the rock formations without harming surface streams…

An Aspen group, Public Counsel of the Rockies, paid the plaintiffs’ legal fees in the Vance-Fitzgerald lawsuit. In March, the William and Flora Hewlett Foundation made a $300,000 grant to Public Counsel of the Rockies to continue the coal-bed methane work, according to the Hewlett Foundation. Public Counsel of the Rockies’ tax forms describe the Vance lawsuit as a test case to bring water regulation to gas wells

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Las Animas County coalbed methane natural gas producers’ substitute water supply plans update

August 24, 2010

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From The Trinidad Times (Randy Woock):

The proposed SWSP was outlined in a July 22 letter to the companies from the Division of Water Resources. The letter notes that, as of December 2009, about 2,600 CBM wells in the Raton and Vermejo formations were considered to have an impact on tributary waters in the Raton Basin. A total of about 3,068 CBM wells operate within the Central Raton Basin…

The letter gives the average pumping rate of all active CBM wells in the affected areas in 2008 to have been about 2.95 gallons per minute (gpm). “For production through 2008, 95 percent of the pumping rates were below 12.6 gpm per well,” it states. “Estimated water production from potential new tributary CBM wells was determined…(e)ach new well perforated in the Raton Basin was assigned a pumping rate of approximately 12 gpm (6 gpm for the Upper Raton Formation and 6 gpm for the lower Raton Formation.” Depletion amounts were calculated using MODFLOW, an industry standard numeric groundwater flow modeling code also used by the U.S. Geological Survey. A 2008 study of the impact of area CBM wells on the Purgatoire River, commissioned by Pioneer and XTO, had found…

Monthly depletions in the affected area for the SWSP’s effective period of April 2010 to March 2011 were estimated as 0.105 acre-feet of water. Depletions caused by CBM pumping prior to 2008 combined with the estimated depletions, figured as a maximum estimated production of tributary water through the plan’s validity endpoint of March 31, 2011, are projected at 4.126 acre-feet. The SWSP, as approved by the SEO, calls for replacement water to come from, “a lease with the City of Trinidad to supply up to 50 acre-feet of fully consumable water from the city’s storage account in Trinidad Reservoir.”[...]

Karen Brown, Pioneer’s senior public relations adviser, told the Las Animas County Board of Commissioners at its Aug. 17 meeting that Pioneer was considering at least five different methods to measure water produced from its wells, including those purchased over the past 15 years from, “numerous operators who, at the time the wells were drilled, did not foresee such a change in regulations that would give the (SEO) jurisdiction over the CBM water production.” She added that Pioneer did already take flow measurements at its wells, discharge points and injection wells, and that it should have completed in the next 30-60 days the tests on the five aforementioned methods to determine which it would utilize to meet the SEO’s water measuring requirements. “Our job is really to ensure that the accuracy of these methods meets the (SEO’s) standards,” she said. Brown also said that more than 700 of Pioneer’s CBM wells produced less than 1 gpm of water. “It’s hard to really gauge that kind of flow,” she said. “Obviously, we want to really assess all of the different options because any one of these things will pose significant costs to the company.”

Additionally, Pioneer, XTO Energy and Red River Ranches hired earlier this year the environmental engineering and consulting company, Tetra Tech, to install and monitor on the Purgatoire River and its tributaries a system of water data monitoring stations. The system, in place for the next two year, includes nine continuous monitoring stations and 25 monthly monitoring stations to collect data on such things as flow levels, temperature, pH and chloride levels, sodium absorption levels and the water’s electrical conductivity levels.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Lawsuit over the State Engineer’s coalbed produced water rules has been moved to Water Court Division One

June 20, 2010

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From The Durango Herald (Joe Hanel):

The case involves a challenge by Southwest Colorado ranchers and several other landowners to the water rules for gas and oil wells that the state engineer adopted early this year. Sarah Klahn, the plaintiffs’ lawyer, said the rules should be overturned because many affected landowners never received legal notice that the state was about to pass rules that affect their groundwater. “Industry wants to say, here are the rules. We’re done. We win,” Klahn said in a hearing Friday. “It’s only fair that the landowners have the same opportunity to participate in this. We think the only way that’s going to happen is if it’s in Durango.”

If the case had gone to Durango, it would have been heard by Judge Gregory Lyman, who ruled against gas companies in the water rights case that set these events in motion. But lawyers for the state engineer’s office and gas companies argued that the case should be heard in Greeley, which is much closer to Denver – the seat of government and headquarters for many gas companies. “This case should be heard here, where the agency is located,” said First Assistant Attorney General John Cyran. “It is a matter of statewide importance.”[...]

The first lawsuit challenges the legal procedure the state engineer used to pass the rules. It was moved to Greeley on Friday.

The second lawsuit challenges the map the engineer adopted for Southwest Colorado to show where the industry has to take extra steps to replace the water it uses. Lawyers on both sides agreed Friday to put that lawsuit on hold until the first one is decided.

Separately, gas companies have filed 11 different applications for water rights in Durango’s water court. As part of those cases, the industry sent out notices by mail to hundreds of landowners earlier this year. Several landowners – as well as the city of Durango, the U.S. Forest Service and others – filed statements of opposition. Lyman will decide later whether to grant the water rights.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: Governor Ritter signs SB 10-165 giving operators more time to score the necessary paperwork

March 26, 2010

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From the Associated Press via the Grand Junction Free Press:

Gov. Bill Ritter signed Senate Bill 165 extending the deadline. State Engineer Dick Wolfe has said he needs the bill to keep his office from being overwhelmed with paperwork.

SB 165 also gives companies limited permission to use produced water from their gas wells.

More coalbed methane coverage here and here. More 2010 Colorado legislation coverage here.

Energy policy — coalbed methane: Pioneer Natural Resources files augmentation plan for coalbed methane produced water

March 14, 2010

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From The Pueblo Chieftain (Chris Woodka):

Pioneer Natural Resources filed its application last month under new state rules brought on by a Supreme Court decision and legislation last year. The company operates nearly 3,000 wells in Las Animas County, mostly above Trinidad Lake in the Purgatoire River Basin.

Jeris Danielson, manager of the Purgatoire Water Conservancy District, said the district is close to reaching a stipulation on how many of those wells are tributary to the watershed. He has not seen the filing for the augmentation plan and could not comment.

In January, Pioneer filed a plan with the state Division of Water Resources claiming that about 1,800 of its wells are tributary. It also says that 1,170 of its wells produce nontributary water. Another 108 wells not yet drilled are also covered in the court filing. The filing describes how replacement water, or augmentation flows, would be discharged at numerous points throughout the watershed, accounting for both flowing and perennial streams. The application asks for storage rights at various points to use produced water from nontributary wells to augment flows. The application specifically avoids claiming salvaged water from tributary flows, based on previous court decisions.

More coalbed methane coverage here and here.

Energy policy — coalbed methane: La Plata County senior rights holders file lawsuit claiming the state engineer’s office is not protecting them with new produced water rules

March 3, 2010

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From The Durango Herald (Joe Hanel):

The state engineer adopted rules this year to exclude many gas wells from added regulation. In Southwest Colorado’s San Juan Basin, only wells close to the basin’s edge will need plans for replacing water they use. In most cases, the state engineer ruled that the gas wells are too deep to affect streams and springs that ranchers use. But opponents, led by the Vances’ and Fitzgeralds’ lawyers, fought the rules. They said the state engineer relied too heavily on a map developed by the gas industry. They sued the state engineer Monday, seeking to overturn both the statewide rule and the map specific to the San Juan Basin. “We wish they’d done it right, but they didn’t,” said Alan Curtis, a lawyer with the firm…

Jim Martin, director of the Department of Natural Resources, was not aware of the lawsuit Tuesday, but he has said the state engineer’s office is trying to be fair to everyone without bringing the gas industry to a halt…

Also Tuesday at the Legislature, a House committee unanimously passed a bill to extend deadlines for gas companies to apply for water permits. Right now, gas companies are under a March 31 deadline to apply for thousands of water permits, thanks to the Supreme Court’s Vance ruling and a bill the Legislature passed last year. [Senate Bill 10-165: Adjust Oil and Gas Regulation] (pdf) extends the deadline to Aug. 1. Anything less would overwhelm the engineer’s office, Martin said…

Curtis and other opponents say a section of the bill could mess up Colorado water law by granting gas companies the right to use the water their wells produce. A water well permit is different from a water right. Well permits allow limited pumping from aquifers under a person’s land. The state engineer grants them. Only judges can grant a water right, which can allow water to be used, bought, sold and perhaps moved around the state. The Denver Water Department and several members of the Colorado Water Congress are worried about the bill’s future effects, said Sara Duncan of Denver Water. She led a Water Congress group that tried to reach an agreement about the bill. The group agreed to extend the deadline to apply for permits, but it split on saying what gas companies can do with the water they produce. Gas and oil companies joined Martin’s Department of Natural Resources to support the bill. It allows companies to use water they produce through their gas wells for things like dust control or mixing cement. This will cut down on fresh water use and truck traffic in the gas patch, Martin said.

The Legislature has never directly tackled the question of who owns produced water or how it can be used. Several members of the House Agriculture Committee said Tuesday that the Legislature will have to make a decision in a future year. “At some point in the future, we’re going to have to recognize the value that is in produced water,” said Rep. Wes McKinley, D-Walsh.

More coalbed methane coverage here and here. More 2010 Colorado legislation coverage here.

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

February 18, 2010

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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

February 6, 2010

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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

February 4, 2010

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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

February 3, 2010

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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?

January 24, 2010

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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

January 10, 2010

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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

December 7, 2009

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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

November 24, 2009

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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

September 1, 2009

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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

August 14, 2009

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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

August 2, 2009

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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

July 7, 2009

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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

June 17, 2009

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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

April 28, 2009

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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

April 23, 2009

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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

April 20, 2009

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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

April 6, 2009

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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

February 28, 2009

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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

February 25, 2009

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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.


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