Court mulls water dispute in coal-bed gas drilling
September 11, 2008
DENVER ” A case with potentially far-reaching effects on Colorado’s oil and gas industry will be decided by the Colorado Supreme Court.
The court heard arguments Wednesday in a dispute over water that’s pumped from the ground in order to draw natural gas out of coal beds. The justices are expected to rule later.
Landowners in southwest Colorado had sued, saying the practice threatens their limited water supplies. They argue that gas companies should defer to water users with older water rights and replace the water they use when it belongs to others.
The state engineer, who administers Colorado water law, and BP America Production Co., appealed a ruling last year by a district court in La Plata County that said the water produced while extracting the gas from coal seams is subject to state water law.
Pumping groundwater relieves the pressure trapping the methane gas trapped in the coal seams. Other gas drilling might produce water, but not in the volumes that coal-bed methane extraction does. Millions of gallons of water might be pumped over the life of one well.
BP America and the state engineer say the water is a waste product of the drilling and should continue to be regulated under state oil and gas rules. BP America re-injects the water into the ground, usually at deeper levels than they draw it.
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“BP supports the state’s position that the current regulatory framework which is based on established Colorado water law adequately protects the water rights in these (coal-bed methane) production areas,” BP America spokeswoman Paula Barnett said in a written statement. “We await the court’s decision before further commenting on the case.”
If the lower court decision stands, companies drilling coal-bed methane would have to apply for well permits or replace the water they divert with water they buy elsewhere.
“I think it would put energy producers into the lineup with every other water user. That would be a dramatic change,” Sarah Klahn, the attorney representing the two ranching families who sued, said after the hearing.
A water district and a city in south-central Colorado, where coal-bed methane drilling is on the rise, filed briefs supporting Klahn’s clients. Klahn is involved in a similar case in Wyoming, another big coal-bed methane producing area.
Colorado Solicitor General Dan Domenico, arguing for the state engineer’s office, said making energy companies get well permits for water that is a byproduct of drilling and which the companies don’t use is stretching the bounds of state water law.
District Court Judge Gregory Lyman in Durango said in his July 2, 2007, ruling that water produced from coal-bed methane drilling fits the definition of water being put to “a beneficial use,” the trigger under Colorado law requiring the state engineer to regulate the water use and companies to follow water law.
That means the companies would have to defer to users with older water rights or submit a plan to replace water they divert from other users.
The families who sued have used springs, seeps and surface water for more than 30 years and are concerned that pumping area groundwater will deplete their sources. The area is in southwest Colorado’s San Juan Basin, a major coal-bed methane producer.
Water districts and communities in the Raton Basin of south-central Colorado, where coal-bed development is spreading, filed briefs in the case supporting the plaintiffs: William Vance Jr., Elizabeth Vance, James Fitzgerald and Mary Fitzgerald.
The briefs by the Purgatoire River Water Conservancy District in Colorado Springs and the city of Trinidad say the magnitude and impact of water depletions from coal-bed methane drilling in the Raton Basin appear to be much greater than depletions in southwest Colorado.
The federal government is studying the impacts of coal-bed methane drilling in the Rockies on surface and groundwater. Coal-bed methane accounted for 9.4 percent of the natural gas produced nationwide in 2006 and the percentage is growing, according to the Environmental Protection Agency.