Denver: Niobrara Shale Conference recap — Two new possible plays near the Niobrara

From The Greeley Tribune (Jason Shueh) via Windsor Now!:

The inaugural Niobrara Shale Conference, named after the oil and gas shale formation running beneath Weld, was held at the Colorado Convention Center on Tuesday and Wednesday and called in a variety of industry specialists, resident mineral owners and geologists…

A notable presentation during the conference included one on hydraulic fracturing by Anadarko’s Jim Raney, who was speaking as spokesman for American Petroleum Institute, an industry trade group. Raney encouraged industry leaders to take a more proactive and environmental approach when working with the community. He strongly cautioned that if the industry didn’t work with the community first, there would be less of an industry to work in.

Another notable presentation included a panel discussion among land and mineral rights owners about leasing negotiations.

Smiley said that while he enjoyed all of the presenters, he thought the lecture by geologist Steve Sonnenberg sparked a lot of attention, especially when Sonnenberg pointed to a few Niobrara hot spots…

The new exploration areas included the Fort Hays Limestone — part of the Niobrara — and the Greenhorn formation — near the Niobrara — as potential territories for drilling.

More oil and gas coverage here and here.

Sand Creek: Suncor Energy hopes to volatize benzene into the atmosphere to reduce levels in the creek and the South Platte River

From The Denver Post (Bruce Finley):

This poses a regulatory dilemma: Is it worse to release benzene into the air or into the water? Colorado Department of Public Health and Environment regulators haven’t decided. “It’s an important balancing act,” spokesman Warren Smith said. “We want to protect both as best we can.”

The latest test data show benzene concentrations in the South Platte River remain more than 30 times higher than the federal drinking-water standard of 5 parts per billion. In an attempt to reduce those levels, a diesel-powered pump pulls 500 gallons a minute out of Sand Creek and returns it to the stream in an aerial arc. The action is designed to free the benzene from the water before it lands back in the stream…

The fountain aeration — a temporary fix — is part of Suncor’s overall cleanup efforts following the discovery in November of an underground plume of hydrocarbon material from the refinery oozing into the water from creek banks.

Suncor recently completed two underground walls designed to intercept toxic material spreading from the refinery. Sump pumps and vacuum systems near the walls are designed to remove liquid hydrocarbons and toxic vapors from contaminated soil. A Suncor environmental contractor’s map, released by CDPHE, shows an underground plume of benzene and other contaminants spreading under the adjacent Metro Wastewater Treatment Plant and nearly reaching the South Platte directly upriver from the confluence with Sand Creek. This plume also is spreading under the open space greenway bicycle corridor toward Interstate 270. Four monitoring wells — a fifth is planned — may help monitor the eastern edge of the plume. Benzene concentrations are low and decreasing at far edges of the plume but reach as high as 10,000 parts per billion (ppb) at the center. Suncor crews have completed a 1,000-foot wall on Metro Wastewater property to shield Sand Creek. They built a 2,100-foot wall at the western edge of Suncor’s property.

More oil and gas coverage here and here.

Oil and gas task force makes recommendations related to state and local regulatory jurisdiction

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

A task force created by Gov. John Hickenlooper to clarify and better coordinate the regulatory jurisdiction between state and local government has finished its work and made recommendations in a letter to the governor and General Assembly.

“The Task Force does not make recommendations for new laws, but instead recommends a collaborative process through which issues can be resolved without litigation or new legislation,” the task force letter says. “The Task Force determined that whether there is sufficient reason to amend (Colorado Oil and Gas Conservation Commission) rules on substantive issues listed in the Executive Order, such as those impacting landowners, should be resolved on an issue-by-issue basis through a robust stakeholder process.”

Hickenlooper created the task force by Executive Order on Feb. 29, 2012. The group was asked to deliver a report no later than today to the governor, Speaker of the Colorado House of Representatives and President of the Colorado Senate.

“The task force has provided a roadmap for how best to deal with issues of local control,” Hickenlooper said. “We very much appreciate the task force members’ time and commitment to finding collaborative solutions.”

The task force recommended:

• Encouraging local governments to designate a Local Government Designee (LGD) and to participate in the COGCC’s LGD program. Encourage LGDs to communicate industry proposals and issues with local elected officials and the public as soon as possible. However, if there is no LGD, then the municipal or county clerk may be the contact for a local jurisdiction. Providing strong encouragement to oil and gas operators to engage local government officials and the public as early in the COGCC permitting process as possible to solicit input. Initial outreach to the LGDs should occur before the application for permit to drill is filed with the COGCC. Issues to be addressed will vary on site-by-site basis.
• Informing LGDs of opportunity to request additional 10 days to review permits and to request assistance from Colorado Department of Public Health and Environment (CDPHE). COGCC shall inform LGDs if formal consultation with CDPHE or CPW is to occur on a drilling permit application.
• Taking actions to ensure that the two new LGD liaisons at COGCC will be effective in working with local governments, oil and gas operators, and the public.
• Providing for a mutual understanding of oil and gas industry and local government practices by facilitating distribution of accurate information. Local governments, oil and gas operators, and COGCC should collaborate to, for example, identify the potential development impacts, duration of drilling operations, and proposed mitigation to protect public health, safety, welfare and the environment.
• Formalizing and promote opportunities for technical training of LGDs and other training/briefings for the general public. This should include annual training for new LGDs and periodic work sessions for LGDs or local government entities, based on need.
• Providing general education presentations in community forums, covering the entire state periodically.
• Local governments and operators should consider using an Memorandum of Understanding (MOU) and/or Intergovernmental Agreement (IGA), as appropriate, to address issues of local concern (e.g. standard conditions of approval, public outreach, etc.).
• Promoting opportunity for COGCC staff to obtain information regarding local government process and requirements, as appropriate. Local governments are encouraged to notify COGCC early in the process of developing local regulations.

The Task Force convened on March 9 and met once per week through April 12, in addition to two additional subcommittee working sessions. At the meetings, the Task Force was briefed on the COGCC’s Local Government Designee program, the COGCC inspection program, and received an overview of COGCC’s permitting process and regulatory timelines. Members learned about the legal underpinnings for Memorandums of Understanding (MOU) and Intergovernmental Agreements (IGA) between the state and local jurisdictions with regard to inspection authority. The Task Force also heard policy perspectives from Gunnison County, a local jurisdiction that recently entered into an MOU and has a pending IGA with the State, as well as from LGDs in jurisdictions where oil and gas activity has long been established.

Finally, the Task Force received more than 1,600 public comments.

All meetings of the Task Force were publicly noticed and streamed on the internet. All documents considered or generated by the Task Force were posted on a dedicated web page and available for the public to download and review.

“The Task Force discussed jurisdictional issues regarding substantive regulations but determined that drawing bright lines between state and local jurisdictional authority was neither realistic nor productive,” the task force letter says. “A more constructive approach will result from collaboration and coordination as outlined above. Through these processes, and the protocols that give them structure, questions around jurisdictional regulatory schemes will most effectively be resolved.”

The task force members were: Mike King, Chair, Executive Director of the Colorado Department of Natural Resources; Diana Allen, Member, Lakewood City Council (on behalf of Colorado Municipal League); Brian Bagley, Attorney, Longmont (on behalf of Colorado Senate President); Reeves Brown, Executive Director, Colorado Department of Local Affairs; Stan Dempsey, President, Colorado Petroleum Association; Barbara Green, Attorney, Denver (on behalf of Colorado Conservation Voters); Jack Hilbert, Commissioner, Douglas County Board of County Commissioners (on behalf of Colorado Counties Inc.); Tommy Holton, Mayor, Fort Lupton and Colorado Oil and Gas Conservation Commissioner; Tisha Conoly Schuller, Chief Executive Officer, Colorado Oil and Gas Association; Casey Shpall, Deputy Attorney General; Andy Spielman, Attorney, Denver and Colorado Oil and Gas Conservation Commissioner; and Ken Wonstolen, Attorney, Denver (on behalf of Colorado House of Representatives Speaker).

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

In the final report, the panel did not call for new laws or changes to old ones to clarify how energy operations should be regulated in the state, but rather recommended “a collaborative process through which issues can be resolved without litigation or new legislation.”

Hickenlooper, in accepting the recommendations, said the task force “has provided a roadmap for how best to deal with issues of local control.” His statement did not indicate whether he agrees with the recommendations.

State leaders and the energy industry have been debating what role local governments should have in regulating oil and gas operations in Colorado.

Traditionally, the state regulates what happens at or under well sites, including drilling and hydraulic fracturing, using rules overseen by the Colorado Oil and Gas Conservation Commission (COGCC). And cities and counties generally set land-use rules focused on off-site impacts of drilling, such as noise, dust and traffic.

More coverage from Kristen Wyatt writing for the Associated Press via The Denver Post. From the article:

“A more constructive approach will result from collaboration and coordination,” the task force of energy companies, local governments and environmental activists concluded. The task force was set up about a month and a half ago after several rival bills regarding energy zoning failed in the state Legislature.

More oil and gas coverage here and here.

‘How close to no-growth edicts are we in places like southeast-metro Denver and other locales?’ — Bart Taylor (ColoradoBiz)

Here’s an in-depth look at business’ role in the world of water supplies, from Bart Taylor writing for Colorado Biz. From the article:

When real-estate reawakens, as it will, water will replace finance as a significant barrier to growth in Colorado, Nevada, and Arizona, and other locales in the West. No-growth is real-estate’s ‘nuclear option’. How close to no-growth edicts are we in places like southeast-metro Denver and other locales? Don’t believe water can impact development? Developers of Sterling Ranch, or the Canyons, both in Douglas County, may disagree.

On the western slope in Colorado, and in communities along the River throughout the Basin, business that relies on steady, regular flows for their livelihood are attuned to the major fight developing over the future of the River. New alliances are forming to join the battle, like Protect the Flows, a coalition of business and environmental interests in western Colorado. They generally oppose new appropriations from the River, though Upper Basin interests may be entitled to more. Who’s right? Business, or, well, business that needs the water?

What impact can new corporate sustainability initiatives have on reducing demand and extending current supply? Should water replace energy conservation as the compelling ‘green’ initiative for business? If so, how?

Without a sustainable water plan – one that business supports – can the West promote its otherwise brilliant future? Or will industry rule out Colorado and the West and locate elsewhere?

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

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

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

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

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

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

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

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

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

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

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

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

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

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’

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

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

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’

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

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

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?

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

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.