Pure Cycle Corporation Announces Second Fiscal Quarter 2014 Financial Results

April 14, 2014

waterfromtap

Here’s the release from Pure Cycle Water:

Pure Cycle Corporation (NASDAQ Capital Market: PCYO) today reported financial results for the six months ended February 28, 2014. Basic and diluted loss per share decreased 38% from a loss of $.08 per share in last year to $.05 per share this year.

“During the second quarter we continued to see our business grow and develop driving long- term shareholder value” commented Mark Harding, President of Pure Cycle Corporation. “We are very excited to have record water sales and deliveries and are continuing to add value to our Company through monetizing our valuable water assets.”[...]

Revenues increased approximately 51% during the our six months ended February 28, 2014 compared to our six months ended February 28, 2013 primarily as a result of increased water sales used for fracking.

More infrastructure coverage here.


“…nobody is digging a new tunnel tomorrow” — Jim Pokrandt #ColoradoRiver #COWaterPlan

April 13, 2014
Colorado River Basin including out of basin demands -- Graphic/USBR

Colorado River Basin including out of basin demands — Graphic/USBR

From the Glenwood Springs Post Independent (John Stroud):

…it’s important to note that “nobody is digging a new tunnel tomorrow,” and organizations like the Glenwood Springs-based River District are active at the table in working to protect Western Colorado interests in the face of growing Front Range water needs, [Jim Pokrandt] said.

“There are a lot of top-10 lists when it comes to rivers and water conservation,” Pokrandt said in reaction to the listing last Wednesday by the nonprofit conservation group American Rivers. “It’s a good way to generate publicity for these various causes.”

American Rivers calls on Colorado Gov. John Hickenlooper to prevent new water diversions and instead prioritize protection of Western Slope rivers and water conservation measures in the Colorado Water Plan, which remains in discussions through a roundtable process that involves stakeholders from across the state.

Already, about 450,000 to 600,000 acre-feet of water per year is diverted from the Colorado basin to the Front Range, Pokrandt noted.

The prospect of more diversions “is definitely being advocated in some quarters from those who say a new project is not a question of if, but when and how soon,” he said.

“We’re saying that’s a big ‘if,’ because there are a lot of big issues around that.”

Pokrandt said any new trans-mountain diversions are “questionable, if it’s even possible.” That’s primarily because of the Colorado River Compact with down-river states that guarantees their share of river water.

“It’s important that we don’t overdevelop the river, and any more transmountain diversions should be the last option out of the box [for Front Range needs],” said. “First and foremost, it behooves all of Colorado to be more efficient in our water use.”[...]

Pokrandt notes that many municipalities across the state, not just the Front Range, are scrambling to find water to take care of projected population growth. That means more water demand on both sides of the Continental Divide.

“But there’s a big question about how much water is really left to develop,” he said. “There’s also an economic benefit to leaving water in the river without developing it, so there’s that issue as well.”[...]

Another Colorado river on the American Rivers endangered list this year is the White River, which was No. 7 due to the threat of oil and gas development and the risk to fish and wildlife habitat, clean water and recreation opportunities.

The White River flows from the northern reaches of the Flat Tops through Rio Blanco County and into the Green River in northeastern Utah.

“Major decisions this year will determine whether we can safeguard the White River’s unique wild values for future generations,” said Matt Rice of American Rivers in their Wednesday news release.

From the Vail Daily (Melanie Wong):

The conservation group American Rivers releases the annual list, and rivers that are threatened include sections of the Colorado that run through Eagle County, including headwater rivers, which include the Eagle River.

According to the group, the river is threatened as many Front Range cities look for future water sources to meet growing municipal and industrial needs. Some of those communities are eyeing various parts of the Colorado for diversion.

Advocates hope the list garners some national awareness and spurs lawmakers to prevent new water diversions and prioritize river protection and water conservation measures in the state water plan.

“The America’s Most Endangered Rivers report is a call to action to save rivers that are at a critical tipping point,” said Ken Neubecker, of American Rivers. “We cannot afford more outdated, expensive and harmful water development schemes that drain and divert rivers and streams across the Upper Colorado Basin. If we want these rivers to continue to support fish, wildlife, agriculture and a multi-billion dollar tourism industry, we must ensure the rivers have enough water.”[...]

For decades, Front Range growth has been fed by Western Slope rivers. Around a half million acres of water is already being diverted east from the Upper Colorado and growing cities need more. The problem with diversions, said Neubecker, is that the water leaves the Western Slope forever, citing a proposed project to tap into Summit County’s Blue Mountain Reservoir and divert water from the Blue River.

“Grand and Summit counties are justifiably worried about a Green Mountain pumpback, and so should Eagle County, because that project isn’t possible without a Wolcott reservoir,” he said. “With water diverted to the Front Range, we never see it again. It has serious impacts on us as far as drought and growth. It’s a finite resource.”

Historically, there have been agreements that have benefited both the Western and Eastern slopes, and river advocates said they want to see more such projects. The Colorado Cooperative Agreement, announced in 2011, involved the cooperation of many Eagle County entities. The Eagle River Memorandum of Understanding, signed in 1998, was also a major victory for mountain communities, significantly capping the amount of water that could be taken at the Homestake Reservoir and keeping some water in Eagle County.

Another settlement with Denver Water in 2007 was a big win for the local water community, said Diane Johnson, of Eagle River Water and Sanitation. “Denver Water gave up a huge amount of water rights, pretty much everything leading into Gore Creek, and as for a Wolcott Reservoir, it could only be developed with local entities in control,” she said. “Things are done more collaboratively now. It’s not the 1960s and ’70s anymore, where the Front Range developed the rivers without thought of how it affected local communities.”[...]

A new Colorado State University report commissioned by the Eagle River Watershed Council studied the state of the Eagle River.

“It’s clearly showing that the biggest threat to this portion of the Upper Colorado is reduced flows. It’s impacting wildlife for sure, most notably the fish,” said the council’s executive director Holly Loff.

With less water, the average river temperature is rising, and many cold-water fish have either been pushed out or killed as a result. Less water also means less riparian (riverside) habitat, an ecosystem that supports 250 species of animals. Of course, less water also affects river recreation and means there’s less water to drink.

More Colorado River Basin coverage here.


Environmental groups are suing to prevent oil and gas exploration operations north of Del Norte #RioGrande

April 5, 2014
San Luis Valley Groundwater

San Luis Valley Groundwater

From The Pueblo Chieftain (Robert Boczkiewicz):

Environmental groups in the San Luis Valley say they are suing to protect an aquifer they call “the lifeblood” of the valley. The lawsuit alleges that proposed drilling for oil and gas on federal land just south of Del Norte endangers 7,000 water wells in the valley. The lawsuit asks a judge to overturn the federal Bureau of Land Management’s approval of the drilling by a Texas oil company.

The lawsuit against BLM was filed March 5 in U.S. District Court by the San Luis Valley Ecosystem Council and Conejos County Clean Water Inc.

The Conejos Formation aquifer “holds the lifeblood of the San Luis Valley ecosystem, culture and economy, as well as the headwaters of the Rio Grande (River),” the 37-page lawsuit states. “Any underground and surface water contamination due to oil and gas exploration in the project area would likely enter the Conejos Formation aquifer.”

“BLM violated the law by issuing (the oil) lease . . . without considering the unique and controversial effects” of the drilling, the lawsuit alleges. “A growing number of people . . . are concerned that the federal government has once again relied on a rushed, incomplete process,” approving the proposed drilling “without taking a hard look,” as law requires, at its impacts, the lawsuit asserts.

BLM said that it is reviewing the lawsuit.

The environmental groups contend that BLM’s environmental assessment of the drilling project incorrectly concluded there would be no significant impact.

More Rio Grande River Basin coverage here.


CU-Boulder offers well users guide for testing water in areas of oil and gas development

April 3, 2014

chemistryglassware

Here’s the release from the University of Colorado at Boulder:

A free, downloadable guide for individuals who want to collect baseline data on their well water quality and monitor their groundwater quantity over time was released this week by the University of Colorado Boulder’s Colorado Water and Energy Research Center (CWERC).

The “how to” guide, “Monitoring Water Quality in Areas of Oil and Natural Gas Development: A Guide for Water Well Users,” is available in PDF format at http://cwerc.colorado.edu. It seeks to provide well owners with helpful, independent, scientifically sound and politically neutral information about how energy extraction or other activities might affect their groundwater.

The guide spells out the process of establishing a baseline for groundwater conditions, including how best to monitor that baseline and develop a long-term record.

“Baseline data is important because, in its purest form, it documents groundwater quality and quantity before energy extraction begins,” said CWERC Co-founder and Director Mark Williams, who is also a fellow at the Institute of Arctic and Alpine Research and a CU-Boulder professor of geography.

“Once a baseline has been established, groundwater chemistry can be monitored for changes over time,” Williams said. “The most accurate baselines are collected before energy extraction begins, but if drilling has already begun, well owners can still test their water to establish a belated baseline and monitor it for changes. That might not be scientifically ideal, but it’s a lot better than doing no monitoring at all.”

CWERC’s guidance builds on the state’s public health recommendations that well owners annually test water for nitrates and bacteria. The guide encourages well water users to collect more than one pre-drilling baseline sample, if possible.

CWERC recommends collecting both spring and fall samples within a single year because water chemistry can vary during wet and dry seasons. Well owners should measure the depth from the ground surface to the water in their wells in the fall, during the dry season, so that they can keep track of any changes.

“Colorado’s oil and gas regulators have established some of the most comprehensive groundwater monitoring regulations in the country, but those regulations do not require oil and gas operators to sample every water well in an oil or gas field,” Williams said. “So we wanted to develop a meaningful tool for people who want to test their water themselves or those who need information to help negotiate water testing arrangements as part of surface use agreements with drillers in their area.

“Ultimately, it is the responsibility of the well owner to know their own well and understand their water. This guide will help Coloradans do just that.”

The guide specifically outlines what well water users may want to test for and provides a list of properly certified laboratories that offer water-testing services. In addition, the guide assists individuals in interpreting the scientific data, chemical references and compound levels that are outlined in the laboratory results they will receive and any industry tests or reports related to drilling in their area.

CWERC studies the connections between water and energy resources and the trade-offs that may be involved in their use. It seeks to engage the general public and policymakers, serving as a neutral broker of scientifically based information on even the most contentious “energy-water nexus” debates.

CWERC was co-founded in 2011 by Williams and Joseph Ryan, a CU-Boulder professor of civil, environmental and architectural engineering, with funding from the CU-Boulder Office for University Outreach.

To download a free copy of the guide, visit http://cwerc.colorado.edu. For questions about obtaining the guide or to order a printed version, visit the website or call 303-492-4561.


Colorado legislative committee OKs oil and gas health impact study — Denver Post #COleg

April 2, 2014

COGCC issues ‘Lessons Learned’ report for operations affected by September #COflood

March 18, 2014
Production fluids leak into surface water September 2013 -- Photo/The Denver Post

Production fluids leak into surface water September 2013 — Photo/The Denver Post

From the Denver Business Journal (Cathy Proctor):

…while images of tipped storage tanks and flooded well sites were part of the national media coverage of the storm and the aftermath, the amount of petroleum products spilled into the rushing waters was small compared to the raw sewage and chemicals from flooded wastewater treatment plants, homes, stores and other facilities, state officials said in the weeks following the flood.

Now, the COGCC, which oversees the state’s multi-billion dollar oil and gas industry, issued its staff report to focus on “Lessons Learned” from the flood. The report doesn’t suggest putting new laws in place, but does propose the COGCC consider adopting “best management” practices for oil and gas equipment located near Colorado’s streams and rivers.
Along with encouraging remote wells, the COGCC recommends boosting the construction requirements for wells located near streams and rivers and developing an emergency manual to help the the COGCC staff better respond in the early days of a future emergency.

From the Northern Colorado Business Report (Jerd Smith):

In the wake of last September’s floods, a new report from state oil and gas regulators recommends that oil companies maintain precise locations and inventories of wells and production equipment near waterways, that all new wells near waterways contain remote shut-in equipment, and that no open pits be allowed within a designated distance from the high-water mark of any given streams.

In the report, released Monday, staff of the Colorado Oil and Gas Conservation Commission said they would not recommend any new state laws to address flood damage in oil and gas fields, but that they would suggest changes to regulations governing how production and gathering facilities are sited and constructed.

The commission noted that more than 5,900 oil and gas wells are within 500 feet of a Colorado stream.

The Colorado Oil and Gas Association, however, said that the industry responded well to the emergency and that no further regulatory action was needed.

“The floods were a difficult and trying event for everyone, and we are proud at our ability to engage meaningfully in the response and recovery of our Colorado communities,” Tisha Schuller, president and chief executive of the association, said in a statement Monday afternoon. “The flood report reiterated facts supporting that Colorado’s oil and gas industry was extraordinarily well prepared, responded in real time, and is committed to Colorado’s recovery.

From the Associated Press via The Colorado Springs Gazette:

The suggestions from the commission’s staff include requiring that storage tanks be anchored with cables so they’re less likely to tip and spill and requiring all wells within a certain distance of waterways to be equipped with devices that allow operators to shut them down remotely.

The staff recommendations didn’t say what that distance should be.

The commission is expected to discuss the proposed rules at a meeting this spring.

The report described the flood damage to storage tanks and production equipment as “substantial and expensive” but gave no dollar amount. It also said oil and gas production has still not returned to pre-flood levels but again gave no figures.

More oil and gas coverage here and here.


COGCC: A Staff Report to the Commissioners “Lessons Learned” in the Front Range #COFlood of September 2013

March 17, 2014
Flooded well site September 2013 -- Denver Post

Flooded well site September 2013 — Denver Post

Here’s the release from the Colorado Oil and Gas Conservation Commission (Todd Hartman):

The Colorado Oil and Gas Conservation Commission today released a comprehensive public report describing the lessons learned from the September 2013 flood. This 44-page report will support a Commission discussion in coming months as it decides whether to modify its regulations and policies that apply to Colorado’s oil and gas industry.

The flood along the Front Range and eastern plains of Colorado in September 2013 inundated many oil and gas facilities. Production equipment and oil and gas locations were damaged by rushing flood waters and debris. Colorado experienced spills of oil, condensate and produced water.

The report, Lessons Learned in the Front Range Flood of September 2013, describes the Commission’s investigation and conclusions following its flood response so far. The Commission has completed more than 3,400 individual inspections of oil and gas facilities affected by flood waters. It has discussed flood observations and lessons learned with the oil and gas industry, first responders, federal, state and local government agencies, conservation groups, and many other interested parties. On February 6, 2014, the Commission held a workshop in Denver to support a wide-ranging public discussion of these matters.

The report describes recommendations for changes to Colorado’s oil and gas program, and it also collects the flood response information gathered by the Commission. Recommendations include improved construction and protection of oil and gas facilities sited near Colorado’s streams. The report also includes recommendations for how the Commission can work better in a future emergency, emphasizing the importance of the Commission’s collection and dissemination of reliable oil and gas information in the very early days of an emergency.

The COGCC will schedule a hearing in the near future to discuss the report and take additional public comment.

The Colorado Oil and Gas Conservation Commission oversees the responsible development of oil and gas in Colorado and regulates the industry to protect public health, safety, welfare and the environment. The Commission oversees wells, tank batteries, and other oil and gas equipment located, in some cases, near streams throughout the state.

Click here to read the report. Here’s an excerpt:

The Colorado Oil and Gas Conservation Commission (“COGCC” or the “Commission”) estimates that more than 5,900 oil and gas wells lie within 500 feet of a Colorado waterway that is substantial enough to be named. When these streams flood, nearby oil and gas facilities are at risk of damage, spills, environmental injury and lost production.

COGCC continues its work in the state’s recovery from the September 2013 flood along the Front Range of Colorado. COGCC has completed more than 3400 firsthand inspections of the oil and gas facilities affected by the flood. It has discussed flood observations and recommendations in detail with industry, other federal and state agencies, first responders and local governments, conservation groups and many others. The agency participates fully in Governor Hickenlooper’s broad flood response efforts started when the extraordinary rains began to fall.

COGCC has learned from these experiences, and this report is built upon that information. Section III collects and describes flood observations by COGCC staff and others. These observations range from highlighting significantly varying levels of protection offered by different anchoring systems to the importance of releasing to the public accurate and comprehensive COGCC information in the early days of the flood. Section IV assembles suggestions to improve Colorado’s oil and gas program – suggestions gathered from many sources by COGCC since the flood. These suggestions also vary widely, from those who believe COGCC regulations worked well to protect against the flood and should be left as they are today to those who believe that additional construction and other regulations are called for statewide as a result of the flood experience.

From The Denver Post (Mark Jaffe):

The the state and the oil and gas industry need to do a better job of managing the 20,850 Colorado wells within 500 feet of rivers and streams, according to a report released Monday.

The Colorado Oil and Gas Conservation Commission report on lessons learned from the 2013 floods sought to identify the potential risks and suggest steps to be taken.

“The flood that struck the Front Range of Colorado in September 2013 was a major disaster and emergency,” the report said. “Damage to the oil and gas industry was significant.”

The oil and gas commission conducted more than 3,400 flood-related inspections and evaluations, and evaluated each of the 1,614 wells in the flood zone.

The inspections determined that wellheads generally fared well, but that tank batteries and other production equipment were toppled or dislodged by flood waters.

Flowing water, for example, eroded earthen foundations below tanks and equipment.

“Many oil and gas facilities located near flooded streams were damaged in the September 2013 flood,” the report said. “Oil, condensate and produced water spilled into the environment.”

About 48,250 gallons of oil and condensate spilled and more than 43,478 gallons of produced water also spilled, the report said.

Among the recommendations are that tanks and equipment be located as far from waterways as possible.

Secondary containment should be constructed with steel berms, which held up better in the flood, and lined with synthetic liner material bolted to the top of the steel berm.

Tanks should be constructed on compacted fill to reduce sub-grade failure and they should be should be ground-anchored, with engineered anchors and cabling.

The report also suggests regulatory changes including requiring each driller to have an inventory of all wells and production equipment in waterway areas.

Wells within the high-water mark of a waterway should be equipped with remote shut-in devices. These were very effective in closing wells during the flood, the report said.

More oil and gas coverage here and here.


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