Longmont: City council approves drafting an ordinance for oil and gas regulations for a May 8 vote

April 19, 2012


From the Longmont Times-Call (Scott Rochat):

…Tuesday night [the council] voted 6-1 to have its draft oil and gas regulations prepared for an ordinance. The regulations ban drilling from residential zones but don’t go quite as far in restricting companies as earlier rules did…

The rules stepped back from areas that the city feared might be pre-empted by the state. For example, disposal facilities would be limited to heavy industrial zones instead of banned outright, while closed-loop systems for disposal (a commonly-used alternative to open waste pits) would be recommended instead of required. The one holdout was Councilwoman Sarah Levison, who said the city should make a bigger push. She gave the example of setbacks, where the state currently requires a 150 foot separation between wells and occupied buildings, or 350 feet in urban areas…

she also suggested that the city ban disposal facilities from inside an urban renewal area. Heavy industrial zones are common in the Southwest Urban Renewal Authority, she said, where the city is committed to removing blight. Levison’s proposal will be studied by city staff, but has not yet been added to the regulations.

The regulations set up both minimum and recommended standards. Companies wanting faster approval for their drilling permits can get it by adopting all the recommended standards. As one example, the minimum standards follow the state’s setback rules but the recommended standards set a 750 foot distance from occupied buildings.

Currently, no oil and gas permits are being accepted by the city until after June 16, when a moratorium expires.

The discussion came on the same day that Boulder County extended its own moratorium to Feb. 4. The county moratorium does not bind the city…

An online copy of the draft regulations may be found at ci.longmont.co.us/city_council/agendas/2012/documents/041712_5B.pdf

Meanwhile, here’s a recap of the inaugural Niobrara Shale Conference being held in Denver, from Jason Shueh writing for The Greeley Tribune. From the article:

In the open panel discussion with attendees and mineral rights owners — many from Weld and Douglas counties — Cristy Koeneke, vice president of the National Association of Royalty Owners, said to be careful before signing anything when oil and gas companies come requesting a lease and offering a signing bonus. “What the companies do, what land men do, is they waive the bonus money at the mineral owner and say ‘Here, look at this hand and don’t watch this one,’ ” Koeneke said…

Koeneke was joined on the panel by association board member Michelle Smith and Niobrara News owners Joél and John Lambe — all mineral rights property owners.

“One of the things we would really like to see is better education between the mineral rights owners and oil and gas companies,” Smith said. Smith encouraged mineral rights owners to organize themselves with better networks of communication and in areas where there is a high amount of oil and gas production, like Weld, to hold monthly town hall meetings with land spokesmen from the oil and gas companies. “This would allow the mineral rights owners the ability to meet with the companies face to face so they have the opportunity to discuss issues that are of concern to them,” Smith said.

Also, Commerce City is still working on their proposed regulations. Here’s a report from Monte Whaley writing for The Denver Post. From the article:

Oil and gas companies would be barred from drilling at or near Rocky Mountain Arsenal National Wildlife Refuge or Barr Lake State Park, under proposed restrictions being considered by city officials.

Other limits on oil and gas extraction would call for increased setbacks for drilling rigs, noise mitigation requirements, limits on hours of operation and a water quality monitoring program. The proposals are part of a package of restrictions the city is mulling in an effort to lighten the impact of hydraulic fracturing in the community, said city spokeswoman Michelle Halstead…

The City Council Monday night once again held off on voting on a six-month ban on oil and gas drilling in the city to give staff members time to finish their work.

More coverage from the Denver Business Journal. From the article:

Commerce City will host two public meetings in May to gather public input on changes to the land use code. The open-house meetings will be held at the Recreation Center on May 15 and Second Creek Elementary School on May 16.

More oil and gas coverage here and here.

Commerce City delays vote on six month moratorium for oil and gas activities inside the city limits

April 17, 2012


From the Denver Business Journal:

Commerce City has delayed voting on a proposed six-month moratorium on oil and gas activities in the city until July 16.

Meanwhile, the council, which met Monday, asked the city staff to work on completing proposed land use code changes regulating energy development, a city statement said.

More oil and gas coverage here and here.

Governor Hickenlooper’s oil and gas task force lays out recommendations

April 14, 2012


From the Summit County Citizens Voice (Bob Berwyn):

Some of the recommendations in the draft summary:

COGCC, Colorado Counties, Inc., Colorado Municipal League, and the Colorado Department of Local Affairs (DOLA) will work with local governments to promote and encourage participation in the LGD program.

The Colorado Oil and Gas Association (COGA) and Colorado Petroleum Association (CPA) will communicate strong encouragement for early operator engagement with local governments through the LGD program.

COGCC rules provide an opportunity for local governments to engage with operators and COGCC prior to the decision-making process for oil and gas permitting. Meetings and work sessions, as appropriate, may enhance this engagement. COGCC and DOLA will develop a guidebook for the work sessions.

COGA, CPA, and DOLA will develop local government best practice recommendations, including those relevant to engagement prior to operators’ filing of the application for the permit to drill.

COGCC will hire two new positions to serve as LGD liaisons.

COGCC will develop a training curriculum for new LGDs and schedule LGD/local
government annual work sessions and trainings beginning in 2012.

COGCC, DOLA, and CDPHE will develop and distribute informational materials and presentations for the public on the LGD program, as well as opportunities for LGD input into permitting.
LGDs will provide COGCC with information on local processes or requirements, as appropriate, and COGCC will, in turn, create links on its website to information on local government processes and requirements.

COGCC will develop minimum qualifications for delegated inspectors and will develop curriculum for certifications, consistent with both COGCC inspector requirements and the scope of inspection assignments.

COGCC will develop a program to train delegated inspectors and establish thresholds and frequency parameters for routine inspections.

On a case by case basis, COGCC and the local jurisdiction will communicate the assignment of inspection authority to surface owners and operators and will provide a copy of the IGA memorializing the relationship between COGCC and the local jurisdiction, as appropriate.

Communicating enforcement matters to local jurisdictions and providing user friendly information to the public on responses to complaints:

COGCC will develop protocols for communicating Notices of Alleged Violations or related enforcement documents to LGDs.

COGCC will update its website and publications, where necessary, according to feedback received by LGDs, industry, the public, and other entities and provide a new area on the homepage that will facilitate ease of use by members of the public.

COGCC will develop a brochure, fact sheet, and public outreach materials to explain its enforcement and compliance process, as well as histories of past enforcement activities and provide contact information so that the public can follow-up in an appropriate way.

More oil and gas coverage here and here.

Governor Hickenlooper’s oil and gas task force is seeking a local/state collaboration on regulating oil and gas operations

April 12, 2012


From the Denver Business Journal (Mark Harden/Cathy Proctor):

In a draft report, the task force says that the state’s “local government designee” program, which allows local governments to suggest restrictions on drilling permits, needs to be used more effectively than it is now.

> The draft report, dated Wednesday, is available here.

A final version of the task force’s report is to be delivered by April 18.

More coverage from Mark Jaffe writing for The Denver Post. From the article:

“There are still a whole lot of unresolved issues,” said Stan Dempsey, president of the Colorado Petroleum Association and a task force member. The task force outlined a plan to increase cooperation between state regulators and local governments and to enable local inspectors for rigs and wells.

The commission did not address a range of issues that Hickenlooper outlined in his executive order, including well setbacks from homes, air quality, noise abatement and traffic management. The task force’s aim was, in six weeks, to try to resolve some of the emerging conflicts among the industry, the state and cities and counties.

“This is an evolving process,” said Mike King, the director of the state Department of Natural Resources and chairman of the task force.

More oil and gas coverage here and here.

New oil and gas produced water treatment facility planned near Grand Junction

April 10, 2012


Here’s the release from ALANCO Tecnologies, Inc.:

New Subsidiary Alanco Energy Services, Inc. to Provide – Produced Water Disposal Services to Natural Gas Industry
Alanco Technologies, Inc. announced formation of a new wholly owned Colorado subsidiary, Alanco Energy Services, Inc. (“AES” or “Company”) to treat and dispose of “produced water” generated by natural gas producers in Western Colorado. The new Company has entered into a definitive agreement to purchase (expected to close in the next few days) a 160 acre parcel; acquired an additional long-term leased site (both located near Grand Junction, Colorado); and acquired intellectual property and rights to federal, state and county permits required to develop both sites to provide such services to the local gas industry.

Produced water, usually highly saline, and containing 1-2% entrained hydrocarbon condensate (oil), is produced as a by-product of oil and gas production, and is most often disposed into on-site injection wells, near the production sites. However, on-site capacity limitations frequently require producers to truck excess water to alternative commercial disposal facilities, which can be a major expense, particularly in light of current low gas prices. Recent growth of the U.S. natural gas industry is creating demand for new facilities to dispose of produced water, while increasingly restrictive federal and state environmental requirements are increasing both the cost and timelines for new disposal locations and/or expansion of existing facilities.

AES’s produced water business will entail the receipt of truck delivered produced water from gas producers within an approximate 100 mile radius of AES’s disposal sites for a per barrel fee in the $3 – $4 range; treatment of the received water to recover and sell the approximate 1-2% of entrained oil; and disposal of the treated water into on-site evaporation ponds. AES’s target market is Western Colorado’s Piceance Basin production area, with over 12,000 currently active gas wells. In 2010, Piceance Basin gas producers generated in excess of 35 million barrels of produced water, and contracted for off-site disposal of about 15% of that volume.

AES’s initial investment, for land purchase, lease transfer, permits and intellectual property comprised of an approximate $600,000 cash payment, 40,000 shares of restricted Alanco common stock, a $200,000 non-interest bearing secured note due November, 2012, and potentially significant earn-out payments over an approximate 10 year period, based upon AES profitability. The sellers in the transaction were Colorado-based TC Operating, LLC, and a related entity, Deer Creek Disposal, LLC.

Phase I site development has commenced with completion anticipated in 12 months, and additional capital investment estimated to be approximately $5,000,000. Alanco Management anticipates that currently available cash and equivalents, plus significant early AES cash generation, will be sufficient to finance Phase I project build-outs. Future planned facilities expansion is expected to be entirely financed by AES generated cash flow.

AES has entered into a Management Services contract with TC Operating, LLC (“TCO”) to provide operating management of the AES produced water disposal business, including facility construction project management. The TCO managing partners, Tom Pool and Craig Creel, each have over 30 years of broad experience in the oil and gas industry.

More oil and gas coverage here and here.

State of the Rockies Project: Interior Secretary Salazar says develop but protect the environment at the same time

April 10, 2012


From the Associated Press via the San Francisco Chronicle:

Salazar spoke during the State of the Rockies Project conference at Colorado College, where students have been studying how to preserve the Colorado River basin…

…climate change, drought and population growth in the West have heightened interest in how the states and Mexico can continue sharing the [Colorado] river and still support irrigation, hydropower, tourism, recreation, agricultural and municipal needs and wildlife. Salazar said the Colorado River Compact that outlines how seven Western states and Mexico will share the river system’s water was created without the best science or knowledge. The agreement wrongly assumed there was 2 million acre-feet more available than there really is, he said. Nevertheless, he said the compact will not be reopened. Within Salazar’s department, the U.S. Bureau of Reclamation is reviewing ideas for how to address a projected imbalance in Colorado River basin supply and demand.

Meanwhile the U.S. and Mexico continue to negotiate details of how to share the river. Salazar’s appearance Monday came the same day that 25 conservation groups delivered a petition urging the U.S. and Mexico to allow some flows to return to the dried-up delta where the Colorado River flows into the Gulf of California. Salazar said the U.S. and Mexico hope to announce results of the negotiations soon. He didn’t give a timetable.

More coverage from Debbie Kelley writing for the Colorado Springs Independent. From the article:

As President Obama’s appointed U.S. Secretary of the Interior, the San Luis Valley native and 1977 CC graduate is familiar with the problems associated with what’s often called “the hardest-working river” in the nation. “The Colorado River is already a water-short river — more water has been allocated than what that river has today, not only along southern states but with the treaty with Mexico,” Salazar said during the 2012 State of the Rockies Project conference, which continues Tuesday. But Salazar assured the hundreds of conference attendees that his department is working on the issues and hopes to announce a new allocation agreement with Mexico soon.

The river is ruled by a compilation of decrees, rights, court decisions and laws that together are referred to as the “Law of the River.” The keystone is the 1922 Colorado River Compact, an interstate agreement for general water allotments, which Salazar said overestimated by 2 million acre feet the annual amount of water that could be extracted from the river. In response to a question from the audience, Salazar said he doesn’t think the Compact will ever be opened up for negotiation: “The legacies that have been created over 89 years are so embedded in the Law of the River,” he said…

Salazar also seized on the connection between the dwindling water supply and the energy industry, deriding the push by U.S. Rep. Doug Lamborn, R-Colorado Springs, for expanded oil shale development. “We need to let the world know how much water would be required to develop those oil shale resources — the estimates I’ve seen are over 1 million acre feet and some at 2 million,” Salazar said. “Where would that water come from? What’s going to be the consequences to the ranchers and farmers dependent on the Colorado River?”

More Colorado River basin coverage here.

Erie: The town is monitoring surface water supplies for hydrocarbons

April 10, 2012


From The Denver Post (Bruce Finley):

Town officials are asking companies to let them review drilling plans for compatibility with local development. They’re demanding new drilling operations capture 100 percent of air emissions. They’ve begun using a $50,000 device that tests water for hydrocarbons. “We have to do everything in our power to protect our residents’ health and safety,” town administrator A.J. Krieger said…

Testing along creeks and irrigation ditches and in reservoirs “is going to give us baseline data,” water-plant operations chief Bruce Chameroy said. “What we’re looking for is changes.”[...]

“We know we don’t have the authority to stop it. Even our residents who are most concerned recognize the need for energy and private-property rights. We just want it done in a safe way,” Krieger said.

State task-force talk has encompassed emerging new arrangements using local inspectors at well sites. But Erie is wary of “unfunded mandates” and can’t afford to hire chemists and petroleum engineers to conduct proper inspections, Krieger said.

More oil and gas coverage here and here.

Windsor: Understanding fracking seminar tomorrow

April 4, 2012


From Windsor Now!:

The Clearview Library District will host a forum about Hydraulic Fracturing from 6:30-8 p.m. Wednesday at the Windsor-Severance Library, 720 3rd St., Windsor. Shane Davis of the Sierra Club and Sarah Landry of the Colorado Oil and Gas Association will be the featured speakers. A question and answer session will follow their presentations.

More oil and gas coverage here and here.

Weld County will test resident’s water wells for oil and gas contamination free of charge

April 2, 2012


From The Greeley Tribune (Analisa Romano):

The county’s new Federal Mineral Lease Board, comprised of Weld Commissioner David Long and two members in the oil and gas industry, granted the money to commissioners to purchase the gas chromatograph and mass spectrometer instrument for an estimated $145,000. While the Colorado Oil and Gas Conservation Commission does similar testing for well water contamination, Weld County Commissioner Sean Conway said the availability of the instrument gives residents “another layer of security” as the industry continues to expand in Weld…

[Trevor Jiricek, Weld’s director of planning] said the gas spectrometer will detect compounds normally found in petroleum. After testing to see whether the water shows sign of oil and gas activity, residents must pay for any additional analysis, Jiricek said. The money used to buy the instrument didn’t come from Weld taxpayers, said Long — it’s federal money granted to the county for oil and gas production on public lands, primarily the Pawnee National Grassland. Weld commissioners just approved the new Federal Mineral Lease Board last fall, which independently decides how to spend the revenue, he said. So this is the first year the board can allocate the money to entities that hope to offset some of the industry’s impacts…

[Weld Commissioner David Long] said the new instrument will also be able to establish a baseline for well water in the area, so that when oil and gas activity does increase, the county will have a better idea of the industry’s impact. “That’s kind of the recommendation across the nation,” said Mark Thomas, a chemist with the Weld Department of Public Health and Environment, of testing water before and after activity. Thomas said he doesn’t expect any samples that will test positive for hydraulic fracturing chemicals.

More oil and gas coverage here and here.

Colorado-Big Thompson Project update: Oil patch water haulers were part of the crowd bidding for regional pool water

April 1, 2012


From The Denver Post (Bruce Finley):

The Northern Water Conservancy District runs the auction, offering excess water diverted from the Colorado River Basin — 25,000 acre-feet so far this year — and conveyed through a 13-mile tunnel under the Continental Divide. A growing portion of that water now will be pumped thousands of feet underground at well sites to coax out oil and gas.

State officials charged with promoting and regulating the energy industry estimated that fracking required about 13,900 acre-feet in 2010. That’s a small share of the total water consumed in Colorado, about 0.08 percent. However, this fast-growing share already exceeds the amount that the ski industry draws from mountain rivers for making artificial snow. Each oil or gas well drilled requires 500,000 to 5 million gallons of water. A Colorado Oil and Gas Conservation Commission report projected water needs for fracking will increase to 18,700 acre-feet a year by 2015…

Riding his tractor this week, Colorado hay producer Lar Voss, who bid for water at the recent auction, accepted this approach. Voss bid for 100 acre-feet “to be sure I’ve got enough for the crops,” he said. Selling water to those who can pay the most “is what ought to happen.”[...]

At the recent auction, Fort Lupton-based A & W Water Service Inc. bid successfully for 1,500 acre-feet of water, paying about $35 per acre- foot. That’s slightly higher than the market price that irrigators pay for leasing water along the Front Range. The average price paid for water at NWCD’s auctions has increased from around $22 an acre-foot in 2010 to $28 this year.
A & W also leases water from Longmont, Loveland, Greeley and other cities — and hauls it to drilling sites.

More Colorado-Big Thompson Project coverage here.

Save the Poudre: Poudre Waterkeeper, et. al., request new comment period for the Windy Gap Firming Project

March 16, 2012


Here’s the release from Save the Poudre: Poudre Waterkeeper (Gary Wockner):

Save the Poudre: Poudre Waterkeeper (STP) [ed. link not safe to open at work] has contacted the U.S. Army Corps of Engineers to request that federal agency open up a new public comment period for the Windy Gap Firming Project (WGFP) Final Environmental Impact Statement (FEIS). Citing regulations in the Clean Water Act, STP believes that the FEIS omits important information, contains significant new information, and thus additional public scrutiny is both warranted and essential. Save the Poudre also asked the Corps to “supplement” the FEIS and conduct additional scientific analyses.

Save the Poudre’s letter to the Corps is here (link to letter).

“This extremely controversial project could have significant impacts to the Poudre River, and the Final Environmental Impact Statement contains significant new information,” said Gary Wockner of Save the Poudre. “We request that the Corps open up a new public comment period – we believe it is essential and in the public’s interest to increase the public’s scrutiny of this project.”

Last month, the U.S. Environmental Protection Agency (EPA) commented on the WGFP FEIS, pointing out errors and highlighting missing scientific information and inconsistent conclusions. In its letter to the Corps, Save the Poudre requested that the Corps address EPA’s concerns. Further, Save the Poudre requested that the Corps address the concerns that EPA stated in its original comment letter on the Draft EIS in 2008 which still have not been addressed in the FEIS over 3 years later.

Save the Poudre also requested that the Corps address the issue of water used for fracking. Recent news reports reveal that several WGFP cities are selling what they call “excess” water for fracking, and one WGFP city, Greeley, which is also in the Poudre River basin, made $1.6 million selling water for drilling and fracking in 2011. In the 1,472 pages of the WGFP FEIS, water for drilling and fracking is not discussed.

“Should we be draining the Colorado River so that sprawling Front Range cities can make millions of dollars selling water for fracking?” asked Gary Wockner. “At a minimum, the FEIS for WGFP needs to address and analyze this new industrial use of water – fracking – in its ‘Purpose and Need’ section of the document.”

In order for the project to move forward, federal law mandates that the U.S. Army Corps of Engineers issue a Clean Water Act section 404 permit for the project — that permit requires the Corps to ensure that there is no alternative to WGFP that would cause less damage to Colorado’s rivers and wetlands. The Corps is also a cooperating agency that assisted the Bureau of Reclamation in the preparation of the FEIS.

More coverage from the Summit County Citizens Voice (Bob Berwyn):

Community activists along the northern Front Range say they want the U.S. Army Corps of Engineers to start a comment period for the Northern Colorado Water Conservancy District’s Windy Gap firming project, based on what they say are omissions, and significant new information on potential impacts to the Colorado River…

The main feature of the project is the proposed new 90,000-acre-foot Chimney Hollow Reservoir that would be located southwest of Loveland and just west of Carter Lake…

The Corps of Engineers is a cooperating agency — with the U.S. Bureau of Reclamation — on the Windy Gap project. The project requires a Clean Water Act wetlands fill and discharge permit, so that’s why Save The Poudre is asking the Corps for a public comment period. Last month, the EPA’s formal comments on the project also pointed out errors and ommissions and highlighted missing scientific information and inconsistent conclusions.

More Windy Gap coverage here and here.

Loveland: Sales to water haulers for hydraulic fracturing is on the increase

March 13, 2012


From the Loveland Reporter-Herald (Tom Hacker):

Green-thinking cities including Loveland that own the Platte River Power Authority electric utility are pressing for conversion of its generating plants from dirty coal to clean-burning natural gas. PRPA policy represents but a tiny portion of the forces driving production of natural gas, a $9 billion Colorado industry that has been pushed ahead by improvements in a technology called hydraulic fracturing, or “fracking.” The technology, more akin to mining than drilling, requires water — and lots of it.

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

…the dominant supplier of water to the industry, Fort Lupton-based A&W Water Service Inc., sends its tanker trucks to Loveland on a regular basis to load water at designated city hydrants to take to drilling sites. On Friday, two truck crews were tapping a metered hydrant just north of the roundabout at Sculptor Drive and First Street, each drawing 6,200 gallons of treated water into their tanks. The water was destined for a drilling site just north of U.S. 34, a quarter-mile east of the Larimer-Weld county line for Petroleum Development Corp…

Loveland water manager Dewey said A&W and other suppliers draw about 2 million gallons monthly, a tiny fraction of what other municipalities in the region provide. They pay at the rate of $1 for 300 gallons, more than twice what Loveland homeowners pay for their usage. And, the industry’s purchases from Loveland make scarcely a dent in the city’s supply. “We want to make sure we have adequate supplies for our residents first,” Dewey said. “We see this alternative as a way to maintain service to our customers at reasonable rates.”

More oil and gas coverage here and here.

Governor Hickenlooper’s oil and gas task force starts work

March 12, 2012


From The Denver Post (Bruce Finley):

A 12-person team tasked with sorting out how local governments might be involved with regulating the oil and gas industry in Colorado began their work Friday with clear direction from Attorney General John Suthers. “The inspection authority can be shared and delegated, but the enforcement authority cannot,” Suthers said.

That may limit local efforts to impose new protective measures and issue citations but appears to leave room to craft new cooperative arrangements in the face of the Colorado Oil and Gas Conservation Commission’s existing authority to promote and oversee oil and gas operations.

More oil and gas coverage here and here.

State of the Rockies Project: Will and Zak release a new video — ‘A Paddler’s Perspective on the Colorado River Delta’

March 12, 2012


Here’s the link to the video. Will and Zak paddled from the headwaters of the Green River to the Colorado River Delta as researchers for Colorado College’s State of the Rockies Project.

More Colorado River Basin coverage here.

Windsor: Sales of water for hydraulic fracturing operations is a growing source of revenue

March 11, 2012


From the Fort Collins Coloradoan (Bobby Magill):

After years of selling small amounts of municipal water to construction firms, oil and gas well servicing companies started lining up in November at the [Windsor's] fire hydrants, earning the community nearly $17,000 in millions of gallons of water sales as of March. 1…

Fracking is a thirsty process, with each Niobrara frack job using an average of 4.3 million gallons of water, or about 13 acre-feet, according to the Colorado Oil and Gas Association. Where that water comes from and where it goes is critical because many environmentalists are sounding alarms about the amount of water being used for drilling along the Front Range because they say it poses serious future water supply problems as the energy industry continues to boom here.

But the state begs to differ. Colorado energy regulators project that roughly 16,000 acre feet of water will be used this year for fracking statewide, most of which will stay far underground without being returned to a local stream or river. Compare that to the 13.9 million acre-feet of water used for farming in Colorado each year. Or the 1.2 million acre-feet of water all the state’s cities use each year. Those figures show that fracking represents only a fraction of the state’s overall water demand, said Thom Kerr, acting director of the Colorado Oil and Gas Conservation Commission…

The Coloradoan asked 32 municipalities in Larimer and Weld counties to report how much bulk municipal water they sold or rented to the energy industry in 2011, including oil and gas companies and their water haulers. Of the 26 that responded, seven were able to report selling water specifically to oil and gas companies and water haulers. The rest either did not sell water to the energy industry last year or do not track what kind of companies buy their water…

Greeley, in the heart of Northern Colorado’s oil and gas patch, is another big benefactor of the industry’s thirst for water. The city made $1.6 million in 1,507 acre-feet of bulk water sales in 2011, up from $951,000 in 2010, mostly to the oil and gas industry, said Jon Monson, director of Greeley Water and Sewer…

Also reaping big benefits from selling water to the energy industry is the city of Fort Lupton in southern Weld County, where officials are using the windfall of cash to pay down $20 million in debt the city racked up from replacing its water treatment plants in the 1990s, Fort Lupton city administrator Claud Hanes said…

“They don’t understand what the cumulative impact is going to be if we put in another 100,000 wells,” said environmentalist Phillip Doe of Littleton, a former environmental compliance officer for the U.S. Bureau of Reclamation. If all the wells that exist today were fracked multiple times, “it’s not hard to come up with calculations that come up with Denver’s annual water use. This stuff goes underground and never comes back.”

More oil and gas coverage here and here.

Delta County Oil and Gas forum provided information on leasing and production potential in the region

March 10, 2012


Here’s a release from Delta County via the Delta County Indpendent. Here’s an excerpt:

It shows real commitment of those interested about potential oil and gas development in the North Fork Valley, to spend an entire Saturday in educational sessions. But a large number of people did just that by attending the Oil and Gas Public Information Meeting sponsored by the Delta County Commissioners.

The meetings started at 9 a.m. and went until 4:30 p.m. and some longer than that. People continued to talk with various experts in the hallways at Paonia Junior and Senior High Schools before, during and after the sessions.

Delta County put together a list of speakers who have many years experience on the regulations, the initial nomination of parcels, the public’s roles throughout and what the agencies can and cannot do. In the afternoon break out sessions, citizens had the opportunity to ask questions that have been nagging them and were not settled during the morning presentations.

Olen Lund, chair of the Board of County Commissioners, moderated and introduced each speaker.

Dr. David Noe, senior geologist with the Colorado Geological Survey, began on the very important subject of the geology of the North Fork Valley where oil and gas exploration is being proposed. Dr. Noe has been mapping the geology from Montrose up to Rogers Mesa, and has not completed his work on the rest of the North Fork Valley.

After his presentation, he made clear that just mapping the geology of the area will not answer the question everyone is seeking — How viable is oil and gas production in the valley?

“It’s hard to evaluate that,” he said. “Just as I showed with the maps this morning, the way to understand the geology is to look at it systematically. You just take that general idea and you go into great depth with it,” Dr. Noe said. “The level of detail that we have with the geology mapped out right now doesn’t answer those questions at that general level. You have to dig in a little bit and look into the old oil and gas records. It’s hard to say. I can’t answer that question for you. The proof is really in doing it.”

Meanwhile, the BLM has released their preliminary environmental assessment on oil and gas exploration in the North Fork area, according to this release from the Bureau of Land Management via the Delta County Indpendent. From the release:

The EA analyzes whether or not the parcels are offered for competitive oil and gas leasing to allow private individuals or companies to explore and develop federal oil and gas resources in compliance with the National Environmental Policy Act. There are three alternatives offered within the EA including offering all of the nominated parcels for sale, offering a subset of the parcels for sale or not offering any parcels at this time

“The BLM has implemented a thorough and public review of oil and gas leasing, and we appreciate the input and information the public provided during this process,” said Barbara Sharrow, BLM Uncompahgre Field Manager. “Now, we encourage the public to review the preliminary environmental assessment and provide us with your comments on the proposed action.”

More oil and gas coverage here and here.

Glenwood Springs: Former oil patch water handler calls for the EPA to classify produced water from oil and gas wells as a ‘toxic substance’

March 10, 2012


From the Glenwood Springs Post Independent (John Colson):

Aaron Milton, 36, has started an online petition to pressure the U.S. Environmental Protection Agency (EPA) to reclassify produced water from gas wells as toxic waste. The petition, titled “Classify production and reclaimed frack water toxic,” can be found at www.change.org/petitions.

Milton also is involved in making a documentary film about the industry with filmmakers Hamilton Pevec of Carbondale and Austin Lottimer, formerly of Carbondale but now living in Denver. The film, Milton said, will be titled, “The Water Handler.” “It will be my story, and there’s a lot of other whistleblowers that are going to be in there, too,” Milton said.

Milton, who said he’d rather be called a concerned citizen than a whistleblower, told the Post Independent he recently worked for a Garfield County gas exploration company. He declined to name the companies he worked for and with, and said he worked there for less than a year…

Milton questions the safety of a regular industry practice of using injection wells to dispose of produced water that cannot be used again for hydraulic fracturing, or fracking. “The problem is, that is not classified as anything but water by the EPA,” Milton noted. “But that is not just water.”

David Ludlam, director of the Western Colorado Oil and Gas Association trade group, responded that the disposal of produced water is done in more than one way, depending on a variety of factors. “If Mr. Milton has concerns about the protocol for handling produced water, our industry is anxious to hear more.” Ludlam wrote in an email to the Post Independent. “I’ll be giving Mr. Milton a call next week to see if he is interested in meeting with our member companies so we can learn from his experiences and collaborate on how to address his grievances.”

More oil and gas coverage here and here.

Geologic primer for western Colorado

March 6, 2012


Here’s a report from the Glenwood Springs Post Independent (John Colson). Click through and read the whole article. Here’s an excerpt:

Peter Barkmann, and environmental geologist and hydro-geologist for the Colorado Geological Survey, offered a primer on the deep geologic history of western Colorado in a presentation last week to the Northwest Colorado Oil and Gas Forum, which meets quarterly in Rifle. Barkmann described the formation of the Mesaverde and other energy-rich rock layers formed from coastal plains sediments deposited 75 million years ago…

The organic deposits of the seaway, laid down over eons, were covered by accumulating layers of rock and sediment. Buried deep underground, subjected to extreme pressure and heat, the organic materials gradually decomposed and permeated the surrounding rock, forming deposits of coal, oil, gas and oil shale.

More Colorado River basin coverage here.

Hydraulic fracturing projected to use slightly more than one-tenth of one percent of the total water used statewide by 2015

March 2, 2012


From the Denver Business Journal (Cathy Proctor):

“In 2010, it reflected slightly less than one-tenth of one percent of the total water used [statewide],” says a report from the Colorado Oil & Gas Conservation Commission (COGCC). “In 2015, it is projected to increase by 4,800 acre feet to slightly more than one-tenth of one percent.”

Meanwhile, most oil and gas operators in Colorado are reporting hydraulic fracturing chemicals to the state, according to this report from Cathy Proctor writing for the Denver Business Journal. From the article:

The Colorado Oil & Gas Association (COGA) launched a voluntary water-testing program in January for any energy company that’s drilling in Colorado. It has signed up companies that are drilling 93 percent of all the oil and gas wells being worked in Colorado every year, said Tisha Schuller, COGA’s president and CEO. “And it’s expanding. We think that everyone [drilling in Colorado] should be in this program,” she [said].

More oil and gas coverage here and here.

Statewide Roundtable Summit: Governor Hickenlooper touts the importance of understanding the water-food nexus, adios bluegrass?

March 2, 2012


From The Pueblo Chieftain (Chris Woodka):

The governor said bluegrass lawns in cities take water away from water needed for agriculture, and one of the easiest fixes is to get people to change their landscape habits. “We’re taking water from ag uses and applying it toward urban landscapes,” Hickenlooper said. “We don’t have an abundance of food. We’re going to need more water for food to make sure farmers don’t run short.”[...]

“Water is a public good, and the roundtables are bringing all of the interests in a river basin together to decide how to manage water in a basin,” he said. “The basin roundtables are on the cutting edge. They become a crucible to determine the needs of the state.”[...]

Citing Denver’s campaign that led to 20 percent water conservation, Hickenlooper outlined several statewide approaches that will increase public awareness of water stress and the need for farm water:

- The ongoing Colorado Water 2012 campaign.
- Incorporating water issues in the upcoming TBD (To Be Determined) Colorado roundtables.
- A “Pedal the Plains” event next fall, similar to “Ride the Rockies.”

The governor also mentioned “shuttle diplomacy” as a strategy to resolve lingering water conflicts. Last year, the state brokered talks between oil companies and environmentalists to rewrite rules on hydraulic fracturing that left both sides feeling like winners.

More IBCC — basin roundtables coverage here.

Denver: Executive Order creates task force to examine oil and gas regulatory jurisdiction between the state and local governments

March 1, 2012


Here’s the release from Governor Hickenlooper’s office (Eric Brown):

Gov. John Hickenlooper signed an Executive Order today that creates a task force to help clarify and better coordinate the regulatory jurisdiction between the state and local governments over oil and gas operations.

The task force is expected to report its recommendations and findings to the Governor, the Speaker of the House of Representatives and the President of the Senate no later than April 18, unless the group is either terminated or extended beyond that date by another Executive Order.

“This is an important step to better define state and local jurisdiction regulatory structures as Colorado’s oil and gas industry continues to grow,” Hickenlooper said. “We want to protect public health, the environment and wildlife and to avoid duplication and conflict between different regulations of oil and gas activities. We expect these efforts to also help foster a climate that encourages responsible development and enhances existing cooperation and coordination between state and local government.”

The issues that the Task Force will address include:

• Setbacks of oil and gas facilities or roads necessary for oil and gas operations from any building, public road, above-ground utility line, railroad, or water body, or other restrictions on the location of an oil or gas well and its related production facilities.
• Floodplain restrictions.
• Protection of wildlife and livestock.
• Noise abatement.
• Operational methods employed by oil and gas activities.
• Air quality and dust management.
• Traffic management and impacts.
• Fees, financial assurance and inspection.

“In establishing this task force, we have worked with a variety of stakeholders, including local government, industry, the environmental community, Speaker McNulty, President Shaffer and Majority Leader Morse,” Hickenlooper said.

The Task Force will be chaired by Mike King, the Executive Director of the Colorado Department of Natural Resources. The task force members will include: the Executive Director of the Colorado Department of Local Affairs, or his or her designee; two members of the Colorado Oil and Gas Conservation Commission as determined by said Commission; the President of the Board of Directors of Colorado Counties Inc., or his or her designee who must also be a member of said organization; the President of the Board of Directors of the Colorado Municipal League, or his or her designee who must also be a member of said organization; the Chief Executive of the Colorado Petroleum Association, or his or her designee; the Chief Executive Officer of the Colorado Oil and Gas Association, or his or her designee; the Executive Director of Colorado Conservation Voters, or his or her designee; one member appointed by the Speaker of the House of Representatives; one member appointed by the President of the Senate; and the Colorado Attorney General or the Attorney General’s designee.

The full text of the Executive Order or can be found here.

From the Colorado Independent (Troy Hooper):

The governor signed an executive order Wednesday to create an 11-member task force “to help clarify and better coordinate” the regulatory jurisdiction between the state and local governments over oil and gas operations. He asked the task force to report its recommendations and findings to him, the speaker of the state House and president of the state Senate by April 18.

The move follows heated debate at the capitol, where a Republican senator proposed empowering the state with sole regulatory authority over drilling. The proposal, HB 12-088, died in the Democrat-controlled Senate. A competing bill, introduced by a Democrat, would have assigned oil and gas regulatory power to local governments. It was killed in the GOP-controlled House.

“County land use regulations, ordinances and charter amendments empowered by the Colorado Constitution and upheld by the courts here and in New York, are the only means left for people to protect their communities from the excesses of an abusively powerful industry,” said Ceal Smith of the newly launched Coalition for a Clean Colorado.

“Two weeks ago, thousands of citizens spoke firmly against HB 12-088 and in favor of local regulatory authority over oil and gas activities. The governor’s executive order on fracking is a blatant attempt to circumvent the will of the people,” Smith said. “The communities most impacted have no voice or representation whatsoever on the governor’s hand-picked task force. We are frankly shocked by this autocratic assault on our democracy and community rights.”

From the Denver Business Journal (Cathy Proctor):

Tensions between the two levels of government have risen in recent months as the spectre of drilling rigs in urban and suburban areas — rigs probing for oil locked in Colorado’s Niobrara formation — has spurred local officials to draft new land use regulations focused on the industry.

State officials, including Colorado Attorney General John Suthers and the Colorado Oil & Gas Conservation Commission, have sent a series of letters warning counties and cities that their draft rules conflict with the state’s.

Bills that would give ultimate authority to either the state or local governments have been filed, and killed, during the legislative session, and representatives of local governments have hoped the governor would take the conflict outside the state Capitol by creating a task force to tackle the issues.

From The Denver Post (Mark Jaffe):

Spurred by the discovery of oil in the Niobrara formation, which stretches from El Paso County to the Wyoming border, companies have been buying up mineral leases and ramping up drilling.

In 2011, Weld County had the most drilling activity in the West, according to a study by Headwaters Economics, a Montana-based natural resource consultant.
That led 10 Front Range municipalities and counties to develop drilling rules, raising concerns among drillers that projects could be stalled.

“This makes attracting investment a real challenge,” said Tisha Schuller, president of the Colorado Oil and Gas Association, a trade group, which will have a spot on the task force…

“The composition of the task force seems weighted in favor of industry,” Kate Zimmerman, the National Wildlife Federation’s senior policy adviser, said in a statement.

From the Summit County Citizens Voice (Bob Berwyn):

In court, the Colorado Oil and Gas Association, as well as the Colorado Oil and Gas Commission, have challenged to ability of local governments and citizens to request hearings and exert local control over drilling operations, claiming that statewide rules are the best way to create a level playing field and the regulatory consistency that the industry wants.

In reality, circumstances can differ on the ground from community to community, said Pete Maysmith, director of Colorado Conservation Voters, which is named as one of the groups to be represented on the panel.
Maysmith said he’s glad that the environmental community will be represented on the task force. “As oil and gas drilling moves into heavily populated areas, we need to be able to protect the air, land water and communities,” Maysmith said. “Local communities need to have a say. They’re the ones being directly impacted.”

More coverage from John Fryar writing for the Longmont Times-Call. From the article:

Numerous cities, towns and counties looking into the possibility of enacting tighter local regulations about the location and operations of well drilling have run into legal questions about how far they can go without violating state laws and court decisions giving primary regulatory authority to the Colorado Oil and Gas Conservation Commission.

Hickenlooper said Wednesday that setting up the task force, which will be chaired by Department of Natural Resources director Mike King, “is an important step to better define state and local jurisdiction regulatory structures as Colorado’s oil and gas industry continues to grow.”

The governor, a onetime oil geologist, said in his announcement that “we want to protect public health, the environment and wildlife and to avoid duplication and conflict between different regulations of oil and gas activities. We expect these efforts to also help foster a climate that encourages responsible development and enhances existing cooperation and coordination between state and local government.”

More oil and gas coverage here and here.

Denver: Hydraulic fracturing lecture kicks off CSU’s Engineering Breakfast series March 5

March 1, 2012


Here’s the release from Colorado State University (Emily Narvaes Wilmsen):

Everything from hydraulic fracturing and wind energy to particle beam accelerators will be discussed at lectures hosted by Colorado State University in Fort Collins and the Denver area beginning March 6.

The Innovation Breakfast series is a great opportunity to interact with others who have an interest in science and engineering and hear about the latest technological trends and innovative research projects underway at CSU’s College of Engineering.

Discussions are led by Sandra Woods, dean of the College of Engineering, and various keynote speakers. Each breakfast will be 7:30-9 a.m. Cost is $20/person ($15 for breakfast and a $5 gift to the Dean’s Innovation Fund) and reservations are required at https://advancing.colostate.edu/INNOVATIONSREGISTRATION.

Fracking: March 6 in Sheraton Denver Tech Center (RSVP by March 2)

Ken Carlson, associate professor of civil and environmental engineering, will talk about oil and gas development in Colorado increasing over the next decade due to technological developments such as horizontal drilling and hydraulic fracturing. CSU has formed the Colorado Energy-Water Consortium to study water issues relating to hydraulic fracturing and other practices, communicate complex information to the public and educate the next generation of students in this rapidly evolving field.

Carlson’s talk, titled “The Colorado Energy-Water Consortium: Water Issues and Oil and Gas Development,” will be at the Sheraton Denver Tech Center, 7007 South Clinton St., Greenwood Village.

More oil and gas coverage here.

Aurora informally approves draft oil and gas ordinance

February 29, 2012


From the Aurora Sentinel (Sara Castellanos):

Council members at the meeting informally approved a draft ordinance regulating oil and gas development amidst growing tensions from the community about the environmental impacts of fracking. City staff members in the coming weeks are slated to meet with major oil and gas developers to discuss the proposed draft, and council members will have to formally vote on the draft at a later date. The draft ordinance puts stricter regulations on oil and gas developers than the city’s current ordinance, but concerned residents still say council should have done more…

Aurora’s proposed regulations include requiring oil and gas companies to obtain a conditional use permit if they are considering drilling within 1,000 feet from a residential subdivision. Aurora’s current ordinance allows drilling in all zone districts. “This is a recognition that as you get closer to residential (areas) there may be impacts,” said Jim Sayre, manager of zoning and development review for the city. “There may be light, glare, traffic, vibration, noise and things we do look at with industrial activity.”[...]

The city’s draft also requires the use of best industry practices for water quality monitoring, “green” fracturing fluids and closed-loop systems. Another tenet of the draft requires traffic impact studies and haul routes…

The draft regulations would also require an emergency response plan to deal with any hazardous spills, which current ordinances do not require.

Meanwhile, Commerce City has delayed their ordinance again. Here’s a report from Bruce Finley writing for The Denver Post. From the article:

The City Council on Monday temporarily shelved a six-month moratorium on all oil and gas drilling in the city — including the controversial practice of hydraulic fracturing, or “fracking” — to allow for more talks with oil and gas interests. The council unanimously voted Monday night to hold off on a moratorium for at least 60 days while city officials continued work on an agreement that could lead to fracking regulation. Council members say the negotiations could reap broader and more effective standards than a simple ban.

More oil and gas coverage here and here.

Conservationists charge Governor Hickenlooper with ‘greenwashing’ oil and gas groundwater contamination

February 28, 2012


From the Summit County Citizens Voice (Bob Berwyn):

In [an] ad, posted on the Colorado Oil & Gas Association website, Hickenlooper makes a flat-out claim that there hasn’t been any groundwater contamination associated with drilling and hydraulic fracturing since 2008. You can listen to Hickenlooper’s message here.

The message touted Colorado’s new oil and gas drilling regulations which are intended to protect the environment as well as to give industry regulatory certainty. The context of the message was to advertise Colorado as open for the oil and gas business business, but the problem is that Hickenlooper’s statement is not completely accurate or truthful. In fact, there have been dozens of documented cases of groundwater contamination in the state since 2008 from leaky pipes, corroded tanks and other problems that are common in any industrial setting. “There are spills on a weekly basis that affect groundwater,” said Earthjustice attorney Mike Freeman, adding that state records show there were 58 spills from oil and gas operations in 2011.

“The first step is admitting we have a problem,” Freeman said. “It’s safe to say, the disclosure rules are not preventing drilling operations from contaminating water,” he said, adding that the state’s rules are only a first step toward ensuring environmental protection. “The state’s own records show that spills and releases routinely affect ground water. Statements like those in the COGA ad will only hurt the state’s efforts to show it is responsive to legitimate concerns about and gas development in Colorado communities.”

More coverage from Bruce Finley writing for The Denver Post. From the article:

“It is certainly true that spills and releases associated with equipment failures at drilling sites have occurred and have impacted shallow groundwater,” Hickenlooper spokeswoman Megan Castle said. “That’s a very different process from drilling and hydraulic fracturing.”[...]

A letter to Hickenlooper from 13 environmental groups says the COGA ad “misleads the public by ignoring the high incidence of groundwater contamination from spills and releases of toxic chemicals at or near drilling sites.” The Colorado Oil and Gas Conservation Commission, charged with regulating and simultaneously encouraging oil and gas activity, has documented numerous spills that have contaminated soil and water. These include instances where petroleum liquids and fracking wastewater were spilled. Corroding tanks and pipelines and leaking waste pits have led to spills of toxic material, including cancer-causing benzene.

More coverage from the Switchboard (Amy Mall). From the article:

In Colorado, archaic rules allow toxic oil and gas facilities to be as close as 150 feet to a child’s bedroom window. These operations can be in someone’s backyard and on their property without consent if a family does not own the rights to the oil and gas beneath its land–and most Coloradans do not.

The COGA ads tout the latest Colorado rule requiring disclosure of fracking chemicals. While disclosure is essential to preserve the public’s right to know about chemicals in their community, and NRDC calls for nationwide disclosure of fracking chemicals for better regulation of this industry, disclosure is only one part of what’s needed in a comprehensive regulatory structure to protect health and the environment from the dangers of fracking. Disclosure alone does not prevent drinking water contamination–rather it lets citizens know what chemicals might be in their drinking water after it has been contaminated. And many of the chemicals can still be kept secret by oil and gas companies.

The risks are real. From 2009-2011, there were more than a thousand spills related to oil and gas operations in Colorado–many of which impacted groundwater and/or surface water with potentially highly toxic materials. Last September, the Denver Post reported that four oil and gas companies alone had 350 spills in Colorado in less than two years. The Post highlighted one spill that contaminated groundwater with benzene–a known carcinogen. In 2010, a Las Animas County landowner found approximately 500 gallons of grayish brown murky water in his cistern that he believes is linked to nearby hydraulic fracturing. This family has extensive water testing documentation going back many years, verifying that their water was always clean and clear until the nearby fracking took place.

The newspaper ad states it is “brought to you as a public service,” which makes it sound like a “public service announcement,” but this is misleading. While the Colorado Independent Ethics Commission decided that it is okay for elected officials to use their personal credibility and the position of their office to better educate the public on issues relating to their government position, in its decision, the Ethics Commissions used examples of public service announcements that discuss the importance of voting, filling out the census form, retrieving unclaimed property, and discouraging the illegal use of alcohol.

None of those examples promote one industry or mislead the public with a false sense of security about considerable and well-documented public health and environmental threats.

More oil and gas coverage here and here.

Commerce City: Council vote on oil and gas moratorium February 27

February 26, 2012


From YourHub (Joey Kirchmer) via The Denver Post:

The city will review an ordinance to place a six-month moratorium on oil and gas activities at its Feb. 27 meeting. The measure passed unanimously on first reading in December, but council has delayed the second reading to allow more time for dialogue.

The issue comes largely in response to public outcry over plans for an existing well at East 96th Avenue and Tower Road in Commerce City…

The oil and gas review committee, which is comprised of residents, industry, interest groups and council members, has been meeting for the past month and a half, but has not come to a consensus on any recommendations for City Council, she said.

More oil and gas coverage here and here.

Moffat County: The COGCC is requiring baseline testing of groundwater as a condition for most permits in the Niobrara shale play

February 26, 2012


From the Craig Daily Press (Joe Moylan):

Although groundwater testing is currently done on a voluntary basis by the energy industry, Kerr said the COGCC will mandate baseline testing of water wells, groundwater aquifers and springs as a condition of drilling permit approval.

The circumstances under which baseline testing must occur varies, Kerr said. Sometimes the COGCC requires groundwater testing based on the recommendations of local government officials, as was the case in the Raton Field of southeastern Colorado, the Piceance Basin near Rifle and the San Juan Basin outside of Durango. “In the San Juan Basin we wanted to do testing because they are working shallow coal seams, which are very close to the ground water aquifers,” Kerr said…

“We like to have baseline testing done in areas that are new to exploration and development,” Kerr said. “That part of the Niobrara is right in the midst of the exploration play, and we have made (baseline) testing a requirement for most of the companies working there.”

So far, the big players in Moffat County are Shell Oil Company, Quicksilver Resources and Gulfport Energy…

Baseline testing is simply choosing water wells near a proposed drill site and checking for the presence of certain chemicals and natural gas. Chemical presence may occur naturally along with natural gas, but companies are required to return to water well test sites a year after drilling is complete to see if chemical or natural gas levels have changed. In some instances, companies may be required to return to test water wells again three and six years after drilling is complete.

More oil and gas coverage here and here.

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

February 26, 2012


From the Loveland Reporter-Herald (Tom Hacker):

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

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

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

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

More oil and gas coverage here and here.

Sand Creek: Benzene laden groundwater flows are still reaching the creek

February 25, 2012


From The Denver Post (Bruce Finley):

State regulators say they’re working with Suncor to find a way to block the toxic material from burbling into the bed of Sand Creek. Colorado Department of Public Health and Environment data — from samples taken by Suncor — showed benzene concentrations at 720 parts per billion on Jan. 9 at the point where Sand Creek meets the South Platte, up from 190 on Jan. 6, and 144 times higher than the 5 ppb national drinking-water standard. Benzene is a chemical found in crude oil that is classified as cancer-causing, especially affecting blood. Downriver on the South Platte, the data show benzene at 240 ppb on Jan. 9, a decrease from 590 on Jan. 6 but still 48 times higher than the standard…

Spilled contaminants from decades of refinery operations at the site have seeped underground, “and it is snaking through. The pressures change. It finds the path of least resistance, and that’s apparently what has happened: It has found the path of least resistance to get into Sand Creek,” Colorado health department environmental-programs director Martha Rudolph said in an interview last week…

Preventing further pollution of Sand Creek has become a top-tier priority, Rudolph said. “We need to accelerate our responding to that particular issue — to get it out of Sand Creek, to stop that.”[...]

OSHA lacks jurisdiction to look into the situation at the nearby Metro Wastewater plant, where toxic vapors forced workers to wear respirators and the closure of a technical-services building.
That building was reopened last week. Workers no longer wear respirators, and after three rounds of drinking-water tests, no benzene has been detected, Metro Wastewater spokesman Steve Frank said…

Suncor will build a large slurry wall made of claylike material along Sand Creek and collector trenches to protect waterways — as well as a trench system and wall on Suncor’s property to prevent the spread of hydrocarbons, she said.

More oil and gas coverage here and here.

Piceance Basin: Bopco LP hopes to build a water treatment plant for produced water

February 14, 2012


From the Oil and Gas Journal:

The US Bureau of Land Management is seeking public comments on a proposed water treatment plant west of Meeker, Colo., to treat produced water from oil and gas activity in the Piceance Basin and discharge it into Yellow Creek. BLM will accept comments through Mar. 6 for an environmental assessment it is preparing for Bopco LP’s proposed project, the agency’s Meeker field office said on Feb. 6. It said that the proposed facility would treat up to 24,000 b/d of produced water from the Fort Worth, Tex., independent producer’s Yellow Creek natural gas field and discharge up to 18,000 b/d into Yellow Creek.

Bopco already has acquired a discharge permit from the state government but will need to reach a separate agreement with the Colorado Parks and Wildlife Service to construct power lines across state land before the project is approved, BLM said.

More oil and gas coverage here and here.

2012 Colorado legislation: Two oil and gas bills, one for 1,000 foot setbacks and the other limiting the use of open reserve pits fail in committee

February 13, 2012


From The Denver Post (Mark Jaffe) via Longmont Times-Call:

The setback bill failed on a 3 to 8 vote and the bill requiring “closed-loop” tank system in place of open pits went down 3 to 7. Rep. Su Ryden, D-Aurora, sponsor of the setback bill, told the House Local Government Committee the proposal was “in response to a serious situation” — the prospect of heavy oil and gas development near suburban areas. Another reason was a “lack action by the Colorado Oil and Gas Conservation Commission,” Ryden said…

The bill requiring the use of closed-loop systems to handle hydrofracturing fluids, a process in which large volumes of liquid are pumped into a well, was sponsored by Roger Wilson, D-Glenwood Springs. Wilson called the growing number of oil and gas pits in the state “an accident waiting to happen.” The bill would have required the use of the close-loop system whenever possible and not gone into effect for three years.

More oil and gas coverage here and here.

Municipal and county officials above the Niobrara shale play are examining their roles in regulating oil and gas exploration and production

February 12, 2012


From The Denver Post (Bruce Finley):

…elected officials are responding by considering drilling moratoriums and new local rules. Residents want good air, water and safety, Commerce City Councilman Rene Bullock said. “What are we going to do to start providing that?” Colorado’s State Land Board hit the brakes on a controversial metro-Denver drilling project after learning that ConocoPhillips is embroiled in a lawsuit for failing to pay the state $152 million for cleanup of leaky underground gas tanks.

As energy companies prepare to tap the vast Niobrara shale formation, this reticence reflects widening anxiety and an uneasy standoff with state regulators as residents question Colorado’s ability to combine environment stewardship with large-scale industrial development.

State regulators, who simultaneously are charged with encouraging oil and gas development, oppose local rules for protecting air, water and serenity. “The state has the experience and the infrastructure to effectively and responsibly regulate oil and gas development,” Colorado Department of Natural Resources spokesman Todd Hartman said. “A healthy industry is important to our state’s economy, and a mosaic of regulatory approaches across cities and counties is not conducive to clear and predictable rules that mark efficient and effective government.”

Air pollution is a major concern. Here’s a report about past air pollution from Mark Jaffe writing for The Denver Post. From the article:

The study based on air sampling from a tower north of Denver estimated wells in the Denver-Julesberg Basin were losing about 4 percent of their methane emissions — twice as high as earlier estimates. The findings raise questions about emissions industrywide, said Greg Frost, a co-author of the study and a scientist at the National Oceanic and Atmospheric Administration and the University of Colorado-Boulder…

But since the sampling for the study was done in 2008, a number of steps have been taken to address emissions, state air officials and industry executives said. A mixture of venting emissions, leaks and flashing — fumes that escape as the pressure on the liquid portion of the gas drops — contributed to the problem, the researchers said. “The methane was detected in the atmosphere. The challenge was to understand what happens at each well site,” Frost said. In the last four years Colorado has adopted new drilling rules and air-emission restrictions that deal with many pollution issues, said Will Allison, director of the state Air Pollution Control Division.

More coverage from Scott Rochat writing for the Longmont Times-Call. From the article:

The public and three of the city’s advisory boards strongly urged tougher regulation — and a longer moratorium — of oil and gas drilling in Longmont. The support came during Tuesday night’s open house and joint board meeting at the civic center. More than 90 people showed up to have their say, either at the microphone or by showing with stickers which subjects they most strongly backed. Huge collections of stickers on poster boards told the tale: Keep drilling operations a half mile from homes? Yes. Require closed-loop systems? Yes. Toughen regulations even if they may be challenged or pre-empted by the state? Yes, yes, yes.

“I’m really concerned abut the long-term effects on the water supply,” said resident Edna Loehman. “I don’t think they should be doing it in urban areas.”[...]

The 14 members of the city’s water board, parks board, and environmental affairs board didn’t always go as far as the audience, but still wanted more than the city had.

In electronic voting, 86 percent of the advisory board members said they’d support tighter requirements even in areas the state had declared pre-empted; about three-quarters said they’d support either a 500 foot or a 1,000 foot setback. The current setback is 350 feet.

“It seems we have more control over where a gas station goes in town than things like this,” said Douglas Ward of the Board of Environmental Affairs.

More oil and gas coverage here and here.

Exploring the myth and lore around hydraulic fracturing — ‘…tests are showing that the fractures usually go only 200 or 300 feet’

February 12, 2012


From The Fort Morgan Times (Dan Barker):

Hydraulic fracturing — sometimes called “fracking” — is a process of pumping a water, sand and chemical mixture into shale formations under high pressure to break up rock and get oil and natural gas flowing more readily, said Dale Larsen, a sales representative for CALFRAC, who spent most of his career since 1978 as a petroleum engineer in fracking…

Some people believe hydraulic fracturing is a new and untested process, but it goes back to 1948, when it was first used in southwest Kansas, Larsen said. People used to think that fracking produced fractures that went for thousands of feet, but tests are showing that the fractures usually go only 200 or 300 feet, he said, and the process does not create earthquakes…

Wells have pipes put in them, and those have a cement casing around them to keep oil or gas from escaping. When the pipes have reached the desired areas, they are perforated with charges and then water, sand and chemicals are pushed into the sandstone to force oil and gas out. However, the part of the pipe which passes through water table is not perforated, and the area where the fractures occur are thousands of feet lower than the water table, Larsen said. Groundwater rarely gets as far down as 1,000 feet…

There is federal regulation of at least one aspect of hydraulic fracturing. When water comes back up the pipe, it must be contained and either purified or disposed of safely, Larsen said. Sometimes that water is filtered and reused, depending on what kinds of minerals may have mixed with it, he said. Other times, it is disposed of in deep wells below the water table, Larsen said.

Meanwhile, Longmont gave folk a look at their proposed oil and gas regulations on Friday. Here’s a report from Scott Rochat writing for the Longmont Times-Call. From the article:

If approved, the rules would be the first update of Longmont’s drilling regulations since 2000. Pressure to upgrade the rules began last fall when TOP Operating announced plans for a multi-well site near Union Reservoir.

The updated rules will be reviewed by the city’s planning commission Wednesday. The commission then will decide whether to send them to the City Council for approval.

Longmont has a moratorium on new oil and gas permits through April 17 to allow time for new rules to be adopted.

Drafting the rules has meant walking a fine line for the city. On the one hand, many residents have told city officials they want the toughest regulations possible. On the other hand, state rules and court decisions put certain areas off-limits. Longmont can’t completely ban drilling within city limits, for example, nor can it mandate tougher setback distances — such as the space between a well and an occupied building — than the state allows.

That left the “carrot” approach, according to city planner Brien Schumacher: Put in a recommended set of guidelines that are tougher than the state’s, to be voluntarily agreed to. If a company agrees to all of them, they can have their permit approved by city staff; if they don’t, it has to go through a full planning commission review and possibly an appeal to the City Council.

More oil and gas coverage here and here.

Northern Water nixes use of Colorado-Big Thompson Project water for hydraulic fracturing outside of project boundaries

February 11, 2012


From KUNC (Nathan Heffel):

Northern Water is cracking down on oil and gas companies using its water for hydraulic fracturing. The agency says its water cannot be used for fracking operations outside of the district boundaries. Brian Werner, with Northern Water says they have no knowledge of this happening but, “With all the trucks out there hauling water in Weld County and elsewhere that it is apt to.”

More oil and gas coverage here and here.

COGCC: Water use for hydraulic fracturing expected to increase from 4.5 billion gallons now to 6 billion gallons in 2015

February 10, 2012


From E&E Publishing (Tasha Eichenseher):

In what many are calling the first attempt to document how much water is required for hydraulic fracturing in the Centennial State, the Colorado Oil and Gas Conservation Commission (COGCC) released a fact sheet late last month that projected a 35 percent increase from 2010 to 2015 in water use for oil and gas exploration and production. Water demand for hydraulic fracturing in the state is expected to increase from roughly 4.5 billion gallons in 2010 to more than 6 billion gallons in 2015, a jump that could supply more than 160,000 people with domestic water for a year…

The amount of water used depends on the geology of the region and whether wells are drilled horizontally or vertically, according to the COGCC. Horizontal wells require more, as do shale formations located deep underground. COGCC estimates that between 2010 and 2015, barring any major economic, environmental or technological changes, the number of active oil and gas wells in Colorado is likely to remain steady, with much of the expected 1.5-billion-gallon increase in water use linked to an expected swing from vertical oil drilling to new horizontal technologies…

Jon Monson, director of the water and sewer department in Greeley — the Weld County seat — said citizens have expressed concern about the tanker truck water withdrawals. But Greeley, like many Colorado cities, has accumulated surplus water rights over time in an effort to meet its long-term needs and stave off the potential impacts of a temporary shortage. Last year was an “epic water year,” he said, leaving the city plenty of extra to sell. “Once you start explaining it is an annual surplus, and we are not committing to these people long-term,” there is a bit of an attitude change, he said. Last year, Greeley leased $1.5 million worth of water, or around 326 million gallons, primarily to oil and gas companies, as well as almost 9.8 billion gallons to neighboring farms. But the city makes more from the oil and gas deals because the water it sells to those operations is treated and therefore more expensive, according to Monson. The water surplus “can make money for the citizens of Greeley,” he pointed out…

According to COGCC numbers, hydraulic fracturing represented just 0.08 percent of all water used in Colorado in 2010. Hydraulic fracturing used less water than agriculture, municipalities, industry, recreation or thermoelectric power generation. The biggest user of water in Colorado, and the United States in general, is agriculture, usually accounting for up to 70 percent of water consumption. According to the COGCC, farming, ranching and other agricultural operations accounted for more than 4.6 trillion gallons, or 85.5 percent, of Colorado water use in 2010. Municipal and industrial uses combined accounted for about 397 billion gallons, or 7.4 percent.

More oil and gas coverage here and here.

Sand Creek: Suncor spill may have started a year ago

February 9, 2012


From CBSDenver.com:

“Our focus right now is to try to contain it onto Suncor’s property,” [Robert Beierle with the Colorado Department of Health and Environment] said. The health department says they were notified of the problem’s start last February. “Of the pipeline that failed pressure testing, which was thought to be probably the source or one of the sources of this material we’re migrating off site right now,” Beierle said. “It’s the only source were aware of and it’s certainly in their best interest to stop it on their property.”

Suncor hasn’t confirmed where the gasoline-like leak began but is cooperating with all aspects of the clean-up, according the health department. Once the trench is complete the Canadian-based energy company will then move back onto their property to install a second trench.

Suncor says they do not believe there is any leak at this time.

More coverage from Carlos Illescas writing for The Denver Post. From the article:

Suncor Energy crews are working on a collector trench on property owned by Metro Wastewater, trying to stop the black gunk flowing from under its refinery north of Denver from reaching Burlington Ditch, Sand Creek and the South Platte River. An access agreement was reached last week, and Suncor started work on the trench Monday, said Suncor’s vice president for refining, John Gallagher. The goal, Gallagher said, is to prevent more petroleum-based contaminants from reaching the Metro Wastewater Reclamation District’s property, which is adjacent to the refinery and the waterways…

Gallagher said the trench should be completed by the end of the month. The company also is working to complete an underground clay wall at the refinery to block toxic material from leaving the Suncor property, which has been home to oil-refining activities since the 1930s. “We’ll do everything we can to make this situation right,” Gallagher said Tuesday.

More oil and gas coverage here and here.

2012 Colorado legislation: SB12-107 would regulate hydraulic fracturing near superfund sites and formations containing radioactive materials

February 8, 2012


From the Fort Collins Coloradoan (Bobby Magill):

State Sen. Morgan Carroll, D-Aurora, is sponsoring the “Water Rights Protection Act,” which, if passed, could affect future oil and gas drilling and hydraulic fracturing in eastern Larimer County where there are underground uranium deposits…

Carroll’s bill, sponsored in the House by Rep. Roger Wilson, D-Glenwood Springs, seeks to require the state to write new rules that would regulate fracking near federal Superfund sites and sites containing radioactive materials.

Energy companies would be required to report to the state how much water they plan to use to frack a specific well and submit water quality reports for all water wells within a half mile of a fracked oil well.

The bill would prohibit fracking within a half mile of any surface water unless the driller keeps all the fracking fluid contained within a “closed-loop” system, which would prevent the fluid from escaping into the environment.

Energy companies would also be held responsible for any water pollution that occurs within a half mile of a well and its bottom-hole if that pollution occurred within six months of drilling…

She said the bill, primarily written to address issues with fracking near unexploded munitions and places where depleted uranium was stored at the former Lowry Bombing and Gunnery Range in Aurora, would apply to areas with uranium deposits, possibly including Powertech’s Centennial Project site between Wellington and Nunn.

More oil and gas coverage here and here.

Sportsman for Responsible Energy Development is calling for federal hydraulic fracturing disclosure rules

February 7, 2012


From the Associated Press via The Columbus Republic:

Sportsmen for Responsible Energy Development is calling on the Bureau of Land Management to make sure water, fish and wildlife are protected when oil and gas wells are developed on public lands. The proposed federal rules would require public disclosure of the chemicals in fracking fluids used in drilling.

Here’s the link to the report, Hunting and Fishing Imperiled.

More oil and gas coverage here and here.

Longmont: Open house today to discuss the city’s options with respect to oil and gas exploration and production regulations

February 6, 2012


From the Longmont Times-Call (Scott Rochat):

On Monday afternoon, city officials will hold an open house to discuss options for regulating the oil and gas industry, including the controversial practice of “fracking” or hydraulic fracturing, a drilling method which reaches deep deposits by creating minute fractures in the rock. After the open house, Longmont’s water board, parks board and Board of Environmental Affairs will meet jointly to give their advice. But there’s one tricky area. The regulations all those groups are advising on still don’t completely exist. A first draft of the new regulations won’t be done until at least Feb. 10, as Longmont’s staff feels its way past Colorado Supreme Court decisions, possible legislative action, and the limits set by the Colorado Oil and Gas Conservation Commission, the state’s regulating authority…

The open house will run from 4:30 p.m. to 6:30 p.m. Monday in the lobby of the City Council chambers, 350 Kimbark St. The joint board meeting, held in the council chambers, will start at 7 p.m.

More oil and gas coverage here and here.

2012 Colorado legislation: Two bills have been introduced that would add regulations to hydraulic fracturing operations, another on the way

February 5, 2012


From Bloomberg (Jennifer Oldham):

Proposed drilling on a former bombing range that contains unexploded munitions and a landfill prompted Colorado lawmakers this week to introduce a bill that would require rules for fracking near toxic-waste sites. “This is quite immediately a public health and safety issue,” said State Senator Morgan Carroll, a Democrat who co-sponsored the measure [Senate Bill 12-107: Protect Water Oil Gas Operations Fracking]. “The room for error here is limited.”[...]

In January, the Colorado State Land Board signed a tentative $137 million agreement with ConocoPhillips to lease oil and gas resources underneath 21,048 acres on the bombing range, said Davy Kong, a ConocoPhillips (COP) spokeswoman…

Carroll’s bill would require Colorado’s Oil and Gas Conservation Commission to establish rules for hydraulic fracturing near radioactive materials and Superfund sites. Carroll’s measure would also require oil companies to document the quantity of water needed to horizontally drill a well and to test the quality of water wells within a half mile of a rig before and after drilling.

It joins a second bill introduced in the Colorado House that would require the conservation commission to adopt rules mandating that oil wells that are hydraulically fractured be set back at least 1,000 feet from a school or residence.

A third bill that would clarify existing law with regard to how cities and counties can regulate fracking is expected to be introduced in the Colorado House sometime this month, Chris Kennedy, chief of staff for State Representative Matt Jones, a Democrat, said in an interview.

More oil and gas coverage here and here.

Patent issued to Anticline Disposal LLC for the treatment of produced water from oil and gas exploration and production

February 3, 2012


From Water World:

According to the abstract released by the U.S. Patent & Trademark Office: “Systems and methods have been developed for reclaiming water contaminated with the expected range of contaminants typically associated with produced water, including water contaminated with slick water, methanol and boron. The system includes anaerobically digesting the contaminated water, followed by aerating the water to enhance biological digestion. After aeration, the water is separated using a flotation operation that effectively removes the spent friction reducing agents and allows the treated water to be reclaimed and reused as fracturing water, even though it retains levels of contaminants, including boron and methanol, that would prevent its discharge to the environment under existing standards. The treated water may further be treated by removing the methanol via biological digestion in a bioreactor, separating a majority of the contaminants from the water by reverse osmosis and removing the boron that passes through the reverse osmosis system with a boron-removing ion exchange resin.”

Here’s the link to the Anticline Disposal LLC website.

More oil and gas coverage here and here.

David Neslin is leaving the Colorado Oil and Gas Conservation Commission for private practice

February 2, 2012


Here’s the release from the Colorado Department of Natural Resources (David Neslin/Todd Hartman):

David Neslin will be resigning from his post as Director of the Colorado Oil and Gas Conservation Commission to return to the practice of law effective in February. Neslin was appointed director of the COGCC in November of 2007.

Under Neslin’s tenure, the COGCC comprehensively updated the state’s oil and gas regulations to strengthen environmental protections during a significant increase in energy development. Neslin also oversaw changes within the agency that resulted in more efficient permit reviews and other process improvements assisting industry and the public.

Neslin worked closely with environmental groups and industry to develop the country’s strongest chemical disclosure law for hydraulic fracturing and he continues to work productively with several local governments on regulatory issues as the potential for energy development grows along the Front Range. Neslin frequently speaks before the public on oil and gas issues, and has testified on regulatory issues before Congress.

“Leading this agency through a time of dynamic change in energy development in Colorado has been a challenging, exciting and rewarding experience,” Neslin said. “I look forward to continuing the work of building collaborative, productive solutions to energy and natural resources issues in a new forum.”

“David’s many talents have been a great asset for our state,” said Gov. John Hickenlooper. “He earnestly, ably and consistently brought varied interests together to do what’s best for the environment, for business and for Colorado. We thank him for his service and wish him luck in his new job.”

“David Neslin presided over a transformative change in oil and gas regulation in Colorado,” said Department of Natural Resources executive director Mike King. “He has left the state in a strong position to address the industry’s increasing investment in Colorado, while ensuring that those operators working here are held to the highest standards for protection of the public and our environment.

“He deftly managed the COGCC through the most challenging period in agency history, and conducted his work with grace, poise and the highest order of professionalism.” King added. “We will miss him, and extend our gratitude for his public service.”

Neslin will be joining the Denver law firm of Davis Graham & Stubbs with a focus on public lands and energy on March 1. Prior to joining Colorado state government in 2007, Neslin was a partner in the Denver law office of Arnold & Porter, where he also focused on lands and natural resource matters.

From The Grand Junction Daily Sentinel (Dennis Webb):

Neslin on March 1 will join Davis Graham & Stubbs LLP in Denver, where he will deal with oil and gas and public lands matters.

Neslin became the state commission’s acting director in 2007, and was named director in 2009. He oversaw the controversial 2008 overhaul of the state’s oil and gas rules, aimed at better balancing development with protection of the environment and public health. Critics blamed those rules for a subsequent decline in drilling in the state, but Neslin cited falling natural gas prices and noted that Colorado remained among the most active states for oil and gas development in the Rocky Mountain region.

In December, he helped negotiate a compromise rule requiring public disclosure of the contents of hydraulic fracturing fluids, while providing for trade secret protections. It’s considered the most far-reaching fracturing disclosure requirement of any state.

More coverage from Cathy Proctor writing for the Denver Business Journal. From the article:

Shortly after Neslin was appointed acting director of COGCC in November 2007, he oversaw the massive, acrimonious rewrite of Colorado’s oil and gas regulations, which dictate industry operations in the state. The new rules were implemented in April 2009, when Neslin was appointed permanent director of COGCC.

During his tenure, Colorado’s oil and gas industry shrank as wholesale natural gas prices dropped. But Neslin also saw the industry grow again, as a new oil discovery in northern Weld County has evolved into Colorado’s fledgling Niobrara oil field, which some oil and ggas companies say could produce more than 1 billion barrels of oil.

More oil and gas coverage here and here.

Brian Werner: ‘Tell me when the next big drought comes, and you’re going to see people screaming about storage’

February 1, 2012


From the Fort Collins Coloradoan (Bobby Magill):

“Tell me when the next big drought comes, and you’re going to see people screaming about storage,” said Brian Werner, spokesman for the Northern Colorado Water Conservancy District in Berthoud. “Their willingness (to consider building new reservoirs) ebbs and flows based on when your last drought was.”

The uncertainty about the mountain snowpack, which fluctuates every year, is the primary argument for building new reservoirs in the West, said Reagan Waskom, director of the Colorado Water Institute at Colorado State University. “The amazing thing is, it comes down to three or four big storms every year, whether they get them, or they bypass us,” he said…

One of five major proposed water storage projects in Larimer County that are in various stages of planning, [Northern Integrated Supply Project] calls for storing about 170,000 acre-feet of Poudre River water in the proposed Glade Reservoir north of Ted’s Place. A final decision could come sometime in 2013 or 2014…

The other four proposed projects include expansions to Fort Collins’ Halligan Reservoir and Greeley’s Seaman Reservoir, the Chimney Hollow Reservoir west of Carter Lake and the more uncertain Cactus Hill Reservoir proposed for a site on the Weld County line between Wellington and Nunn. If those projects are built, Waskom said, it’s hard to conceive of other such large projects being built in Northern Colorado regardless of the need because there are few other places to build them, at least in Larimer County. “Unless we can get Aaron Million’s project or a West Slope diversion built, we don’t have any more water left,” he said…

“All the easy projects have been built,” [Waskom] said. “Now we’re dealing with the hard projects. What comes after the projects, that’s the question, right? Where’s the water and reservoir sites, and where’s the political will to build projects?”

More infrastructure coverage here.

The Colorado Geological Survey has developed an online tool to further understanding of the Niobrara shale play

January 30, 2012


Here’s the link to the CGS page. Here’s the introduction:

The Niobrara strata in the Denver Basin are currently being developed for oil production using horizontal drilling and hydraulic fracturing. This development is moving into parts of the Denver Basin where many people depend on groundwater to meet their household needs. Citizens are concerned that this activity may adversely affect their water wells. This calculation tool was developed to help citizens or planners understand the geologic conditions that exist beneath their property.

The tool is designed to help people visualize the spatial relation of hydraulic fracturing in the Niobrara Formation to the important fresh-water aquifers. The tool will show the average depth to the Niobrara Formation at any selected point or address on the map. It will also show the minimum thickness of the shale barrier (Pierre Shale) that separates the Niobrara strata from fresh water aquifers. The tool also provides the depth of the deepest fresh water aquifer at any spot on the map.

The above cross section [ed. Click on the the thumbnail graphic above and to the right] represents what we would encounter if a giant, vertical slice were cut out of the Denver Basin so that we could observe the various layers of rock. Notice that the Niobrara strata are so deep that they are actually below sea level in some parts of the basin.The illustration shows how an oil company would drill a vertical well into the Niobrara strata and then turn the drill bit so that it would drill horizontally in the Niobrara limestone layers. After the horizontal part of the well is drilled (sometimes more than a mile in length), the company pumps liquid and sand out into the horizontal borehole. The pressure of this slurry fractures the limestone so that the oil flows into the well at much higher rates than it normally would without the artificial fracturing.

Controlling where fracturing occurs is important for two reasons. First, if fracturing were to extend into overlying freshwater aquifers it would create a potential pathway for contamination of water supplies. Second, oil production would decrease if fractures extended into non-oil bearing formations.

Fortunately, in the Denver Basin we have a stack of rocks (the Pierre Shale) that separates the Niobrara from shallower aquifers. The properties of the Pierre Shale are ideal for preventing upward migration of fractures or fluids. The Pierre Shale has extremely low permeability and it is very thick (varying from more than a half a mile thick to about a mile and a half thick). These two properties combine to make the possibility of fractures or fluids working their way up through it, essentially nil. The calculation tool will show you how thick this barrier is at any spot in the Denver Basin.

More coverage the Craig Daily Press:

Citizens around the state have been seeking a better understanding of how ground water supplies are protected amid energy development and the geologic conditions that separate ground water from the oil and natural gas deposits in the Niobrara.

The purpose of the tool is to answer the following questions: If a company were to hydraulically fracture the Niobrara formation under a house, how deep would this be occurring? How thick would the shale barrier be between the house’s water well and the Niobrara strata?

More oil and gas coverage here and here.

Water use in hydraulic fracturing by Colorado drillers will increase but will remain a small part of overall water use

January 26, 2012


From the Denver Business Journal (Cathy Proctor):

“In relative terms, the amount of water used for hydraulic fracturing is a very small percentage of the water that’s used in the state of Colorado — most of it is used for agriculture,” said David Neslin, the director of the Colorado Oil & Gas Conservation Commission, which regulates industry activities in the state.

The report — “Water Source and Demand for the Hydraulic Fracturing of Oil and Gas Wells in Colorado from 2010 through 2015,” available for download here — cautioned that predicting water use related to oil and gas operations is difficult.

More oil and gas coverage here and here.

Commerce City delays decision on moratorium for hydraulic fracturing for one more month

January 24, 2012


From 9News.com (Jeffrey Wolf):

…the council decided to push off a decision on a moratorium for another month to discuss the issue further. Another vote on whether to move ahead with the six-month moratorium will happen on Feb. 27. The state received an application by Texas-based Hilcorp to begin fracking at a well near Tower Road and 96th Avenue. It would be the first well in Commerce City if it goes through…

The state’s rules regarding oil and gas development trump local control, but Hilcorp would still need to get a conditional-use permit from the county…

If Hilcorp does not get a conditional use permit from the county, yet meets all the requirements to get one, the attorney representing Hilcorp says the company might take legal action.

From The Denver Post (Monte Whaley):

The city also set up a committee to specifically examine fracking and its implications.

Several residents argued that the city needed the six-month suspension of fracking to further study the implications of oil and gas drilling.

However, [Councilman Jim Bensen] warned that an oil company could ignore the moratorium and start fracking activity within the city because state law supercedes any local restrictions. That could land the city in court, fighting an expensive legal battle with the oil company and the state, he said.

More oil and gas coverage here and here.

Hydraulic fracturing of oil and gas consumes about a tenth of a percent of water used in Colorado in 2010

January 23, 2012


From The Grand Junction Daily Sentinel (Dennis Webb):

Hydraulic fracturing of oil and gas used consumed than a tenth of a percent of water used in Colorado in 2010, a new report shows.That amount could increase by about 4,800 acre-feet in 2015 from 13,900 acre-feet in 2010, but that still would represent just a little more than a tenth of a percent of the state total, according to the study, prepared by Colorado Oil and Gas Conservation Commission staff with the help of the state Division of Water Resources.

The Commerce City council plans a vote on a six month moratorium on hydraulic fracturing tonight. Here’s a report from Monte Whaley writing for The Denver Post. From the article:

The city also set up a committee to specifically examine fracking and its implications. The committee’s recommendations are expected to be considered at tonight’s [6:30 PM] meeting. The meeting will be held at the Commerce City Council chambers at 7887 East 60th Ave. The council building is located just west of Dick’s Sporting Goods Park.

More oil and gas coverage here and here.

Sand Creek: Benzene laden flows from the Suncor refinery are still discharging into the surface water

January 21, 2012


From The Denver Post (Bruce Finley):

Colorado Department of Public Health and Environment data — from samples taken by Suncor — showed benzene concentrations at 720 parts per billion on Jan. 9 at the point where Sand Creek meets the South Platte, up from 190 on Jan. 6, and 144 times higher than the 5 ppb national drinking-water standard. Benzene is a chemical found in crude oil that is classified as cancer-causing, especially affecting blood. Downriver on the South Platte, the data show benzene at 240 ppb on Jan. 9, a decrease from 590 on Jan. 6 but still 48 times higher than the standard…

Spilled contaminants from decades of refinery operations at the site have seeped underground, “and it is snaking through. The pressures change. It finds the path of least resistance, and that’s apparently what has happened: It has found the path of least resistance to get into Sand Creek,” Colorado health department environmental-programs director Martha Rudolph said in an interview last week…

Suncor officials Friday said blood tests were done on 675 employees and contractors. Suncor cannot comment on results, spokeswoman Lisha Burnett said. “Any retesting that may be required is handled between the individual and a doctor.” Refinery crews are excavating water pipelines and have not found any breaks or cracks, Burnett said. “One theory that we’re investigating is the permeation of hydrocarbons through plastic pipe.”

Suncor will build a large slurry wall made of claylike material along Sand Creek and collector trenches to protect waterways — as well as a trench system and wall on Suncor’s property to prevent the spread of hydrocarbons, she said.

More Sand Creek coverage here.

More than half the speakers at Longmont City Council’s annual open forum addressed hydraulic fracturing concerns

January 20, 2012


From the Longmont Times-Call (Scott Rochat):

They praised the city’s 120-day moratorium on drilling applications, urged the adoption of tough regulations such as a 1,000-foot separation between wells and occupied buildings, and deplored the amount of water used in hydraulically fracturing a well to get at hard-to-reach deposits — an estimated 5 million gallons to start the well, and still more when a well is “re-fracked.”[...]

Asked for their own comments on drilling, both [Councilwoman Sarah Levison] and Councilwoman Witt said they didn’t consider the moratorium — which runs through April 17 — to be enough time for the city to revise regulations. Witt said that what the city really needed was an energy master plan, but she could see that taking two years: far longer, she said, than any moratorium the city could practically issue…

[Councilman Brian Bagley], in turn, urged the audience to go to the Legislature with the same passion. With wells in Firestone and unincorporated Boulder and Weld County, he said, the city just doesn’t have the jurisdiction to solve the problem by itself. “It’s like being in court and saying ‘I want a divorce’ and being told ‘Sorry, this is municipal court — we do traffic tickets, you need to go to district court,’” Bagley said. “I wish I had a better answer for people. But we’ll do the best we can.”

The EPA is seeking volunteer scientists for peer review of their draft report on the Pavillion Oil Field

January 13, 2012


From The Hill (Ben German):

The Environmental Protection Agency is seeking scientists to volunteer for what promises to be a closely watched job: reviewing its politically explosive report about groundwater contamination from hydraulic fracturing in a Wyoming natural-gas field. The agency plans to publish a Federal Register notice Tuesday seeking nominations for scientists to peer review the draft study released in December about contamination near Pavillion, Wyo…

The upcoming Federal Register notice seeks scientists and engineers with expertise in petroleum geology, hydrology, geophysics and other fields.

More oil and gas coverage here and here.

DNR is evaluating the impact of oil and gas exploration and production on water supplies

January 13, 2012


From 9News.com (Jessica Zartler):

Some water conservation districts and environmental groups have expressed concern over the sustained use of water in hydraulic fracturing operations and now, the Department of Natural Resources is doing its own analysis to crunch the numbers and address questions from across the state about the short and long-term impacts on Colorado’s water resources. The report is set to be released sometime this month.

Individual water districts are not waiting to start looking at the issue, including the district where residents in the Reunion Subdivision have seen the latest hydrant-hook-up. The South Adams County Water and Sanitation District has already held board meetings and accepted public comment to set its guidelines for when and how much water it will allow oil and gas companies to use.

The water district says at this point is has only issued one construction hydrant permit for water use to Select Energy Services, the company that recently reactivated a fracking operation near the Reunion subdivision.

Under the permit, the company is paying $4.87 per thousand gallons for its water, $1.10 more than the average residential customer. By the end of December, the fracking operation had used 453,700 gallons of water – more than three times the average use of a South Adams Water household for an entire year.

The water district says although it is still working out the details on the limits it will set for leasing water, it does see some potential benefits to leasing water to fracking operations. South Adams County Water and Sanitation District spokesman Jim Jones cites the possibility of lower utility bills for residential customers due to increased profits and less impact on local roads because companies can pump the water direct instead of trucking it in from an outside source.

Meanwhile, here’s a report about waterless hydraulic fracturing from Matt Goodman writing for CBSDFW.com. From the article:

What if it was possible to frack without water?

In 2008, Calgary-based energy company GasFrac did just that: it used a thick propane gel in place of treated water. The method, called liquefied petroleum gas (LPG) fracturing –– or simply gas fracking –– pumps a mix of the gel and sand into the shale formations more than a mile underground.

That mixture is the fracking fluid. It’s used to break up the rock, releasing natural gas bubbles trapped inside. While facing extreme pressure deep inside the earth, the propane gel turns into a vapor and returns to the surface with the natural gas, where it can be recaptured.

“We don’t do any water with the frack,” said Emmett Capt, GasFrac’s vice president of U.S. operations. “We use what actually comes out of the ground.”

Since 2008, GasFrac has successfully harvested natural gas using its method about 1,000 times, Capt said. Nine hundred of those were at wells in the Canadian provinces of Alberta, British Columbia and New Brunswick.

Finally, Governor Hickenlooper wants local government to tread cautiously in the area of oil and gas regulation. Here’s a report from David O. Williams writing for the Colorado Independent. From the article:

“When the Environmental Defense Fund and Halliburton stood together in Colorado in support of the state’s new ‘fracking’ disclosure rule, other states took notice,” Hickenlooper said during his State of the State address. “It’s another reason why we believe so passionately in the power of partnership and collaboration.”

State Rep. Matt Jones, D-Louisville, said last month he was working on a bill with Sen. Bob Bacon, D-Fort Collins, that would give local governments greater control over drilling operations, including hydraulic fracturing. They’ll be fighting an uphill battle with Hickenlooper, however.

“In that same spirit [of collaboration], we intend to work with counties and municipalities to make sure we have appropriate regulation on oil and gas development, but recognize the state can’t have 64 or even more different sets of rules,” Hickenlooper said, referring to the number of counties in the state…

“My focus has been actually getting the oil and gas commission to move ahead on the rules we have already given them the authority for,” state Sen. Gail Schwartz, D-Snowmass, said. “Some of the issues are reclamation, setbacks, and the other issue is air quality.”

Schwartz said the COGCC can go ahead with a rulemaking on those issues without the legislature getting involved.

“They have the authority to do it; we’ve already done it legislatively,” Schwartz said. “We’ve already had that fight. We have the battle scars from that. We need to have the commission stepping up and really using their authority as opposed to providing more legislation, and if they don’t, it will call for more legislation.”

More oil and gas coverage here and here.


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