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State gas commissioner, county discuss outcrop
10/26/2007 By: Carole McWilliams
As coalbed methane development continues with closer well spacing, La Plata County officials are anticipating requests to drill within 1.5 miles of the Fruitland formation outcrop where methane seeps and even underground coal fires have been an issue.
They discussed these concerns on Oct. 16 with Garfield County Commissioner and new Colorado Oil and Gas Conservation Commission member Tresi Houpt.
County Emergency Management Director Butch Knowlton said the outcrop is now recognized as a 25-mile-long geological hazard area, most of it privately owned.
This is separate from the part of the outcrop on Southern Ute land in the southwest part of the county. That’s where coal fires have happened. The fires have been in very remote areas, but the concern is that they could happen in populated areas.
The outcrop crosses the Pine River just south of Bear Creek Canyon. It crosses the Animas River just north of WalMart.
Private land on the outcrop can be bought and sold, Knowlton said. The county’s geographical information system (GIS) can red flag those parcels with a notation that gas seep mitigation is needed, he said.
The County Building Department has brochures on ways to deal with seeps. The seeps become dangerous if gas builds up in closed spaces, like a pumphouse or home foundation, in certain concentrations.
But some gas seeps are too much to mitigate. Amoco (now BP) has bought out seven outcrop properties and torn down the houses because of seeps, Knowlton said. “Out of the seven parcels that Amoco bought, the seeps were so prolific that it’s a wonder that people didn’t die.”
Gas technical advisor Mike Matheson recounted the history of Fruitland outcrop issues. Seeps existed long before coalbed methane drilling started in the late 1980s. “We noticed an increase in seeps in the early 1990s,” he said.
What became known as the 3M study was done in the late 1990s and early 2000 because industry wanted to go from 320 acre spacing down to 160 acre spacing for Fruitland wells. The study was intended to predict what would happen at the outcrop with the closer spacing.
“The conclusion was that the horse was really already out of the barn,” he said. “The 3M study concluded that overall development (not just near the outcrop) reduced the amount of water in the formation. The horse was out of the barn 15 or 20 years ago” in terms of outcrop seeps.
But the COGCC included a 1.5 mile setback from the outcrop in its order allowing 160 acre well spacing in 2000, because “some bad things happened” right after some Fruitland wells were drilled near the outcrop, Matheson said.
With drilling now happening on 80 acre spacing, the county wants a new outcrop study, he said. It’s just getting started, with a $4 million appropriation gotten by State Sen. Jim Isgar. It will be paid by a tax on gas wells.
The COGCC staff is fine-tuning the request for proposals to do the new study, Matheson said. He expects it will be next spring before a consultant starts on the study, and a couple of years before there are many conclusions.
Matheson advised, “In certain areas it may be appropriate to go into the 1.5 mile buffer to capture the gas as a mitigation tool.” The new study is referred to as 4M.
“We’ve been studying this darn thing for 15-plus years. Industry has never agreed that their production has caused an increase in seeps,” Matheson said. “We’re trying to sidestep finger-pointing and liability issues to figure out what is happening and how to mitigate it.”
A tremendous amount of money has already been spent studying outcrop issues, he said.
The COGCC underwent a fundamental change this year. In the past it has been accused of being stacked with pro-industry people at the expense of surface owners who get the impacts of drilling.
This year the legislature changed the COGCC from seven to nine members, only three of them with ties to industry. Tresi Houpt is one of the new members who started this summer.
The new group is starting a major review of its rules, and the county is in the midst of revising its oil and gas land use regulations to address 80-acre well spacing. Matheson said the county will incorporate language from the memorandums of understanding the county reached with gas companies, starting with BP. A key feature of those was a requirement to drill 80-acre wells directionally from existing pads of 160-acre wells whenever possible.
“In the infill hearings in 2000, we girded ourselves to do battle with the OGCC, mainly on land use issues,” Matheson said. “It was a mess. This time the county decided to work with industry well before their application (for 80 acre spacing), mainly BP, to come up with an agreement to handle the issues before we bring it to you (the OGCC).”
Interim County Manager Joanne Spina added, “We were very proud of the MOU process. Nothing is perfect, but we felt it was a huge leap forward from the acrimony in 2000. ... We feel that we have great relationships with industry and our property owners.”
Knowlton noted that around seven operators stepped forward to help find out what happened after gas seeping from an old abandoned well bore blew up a house near Bondad. “It’s nice to have industry help, because we can’t afford that equipment,” he said.
La Plata County Energy Council director Christi Zeller sat in on the discussion. She said the industry group is working with some newer smaller operators and service companies and their employees to let them know that some ways of doing things are not acceptable in La Plata County.
But she said, “We have to deal with what is happening today, not re-hash what happened 10 or 15 years ago.”
Houpt responded that it is helpful to her “to hear what happened 10 years ago if you live in a county where development is just starting. ... I get calls from counties that are just starting to get a couple applications. I draw from best practices of all the counties.”
Houpt urged the county officials to keep COGCC members advised of local concerns.
Matheson said, “Just getting the commission, their staff and the Department of Natural Resources to realize local governments have a role, and they can work together and not conflict, is a great step forward.”
Houpt agreed, “It’s important to make sure all decision makers are working together instead of impacting each other.”
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