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  Home Page » News » Gas Groups Start Filing For Water Rights

Gas groups start filing for water rights

Industry tries to establish priority for future claims of beneficial use

by Katie Burford
Herald Staff Writer It may be brackish and thousands of feet underground, but in Colorado, every drop of water counts.

That's why gas companies are filing applications for rights to water that comes out of their wells during the process of producing natural gas.

“The oil and gas industry is only seeking the water rights associated with oil and gas production," said Bruce Gantner, a ConocoPhillips environmental consultant who is handling comments about the company's application.

Others filing applications in the area include BP, the Southern Ute Tribe and Chevron.

But some observers of the process called it a “water grab" and question the legal framework for the gas companies' claims.

“I think that the applications are overreaching, and they're very broad, and they're probably speculative, as well," said Amy Huff, a water attorney who recently presented at a public meeting about the subject.

As always, nothing related to water is simple.

Beneficial use

The water in question spent millennia trapped in coal seams formed when the San Juan Basin was swampland and sea. In the 1980s, a technique was pioneered that made it possible to extract methane gas from the coal beds by hydraulically fracturing the formation, which first releases water, then gas.

The water, mixed with chemicals and fluids used to fracture the rock, later typically is disposed of by injecting it deep underground, but it also can be stored in evaporative ponds or discharged on the surface.

Viewed as a worthless byproduct, the water for decades existed outside the purview of state regulators and water courts.

But in 2005, two area ranching families, William and Elizabeth Vance and James and Terry Fitzgerald, sued the state engineer's office, arguing that the extraction has depleted their water supplies.

In 2007, they prevailed in a Durango water court decision, which the Supreme Court upheld.

The result is that the gas companies now have to get water permits for their gas wells on the basis that they are putting the water to beneficial use.

Though the Vance case does not require gas companies to apply for rights to the so-called “produced water," most have done so.

“It just became a need to integrate into the water rights systems," said Christi Zeller, executive director of the La Plata Energy Council.

She called it “a natural consequence" of the court ruling.

In Colorado, water is allocated on a priority basis, with senior users at the front of the line, said Dick Wolfe, state engineer for the Division of Water Resources. Without a court-recognized right, gas companies remain permanently at the back of the line, even though there are no other takers at this point.

“They're trying to get their standing in court to affirm that priority," he said.

The sheer volume of wells involved - more than 3,000 in this area - and the unprecedented nature of applications gives some observers pause, as does the question of how water behaves underground.

Determining priority

Gas companies firmly assert that water to which they are seeking rights is deep underground and has no effect on water people use for drinking or irrigating.

“This water is not of a drinking-water quality," Gantner, with ConocoPhillips, said.

Zeller argued that domestic wells run a couple hundred feet deep or less while gas wells are about 3,500 feet or deeper.

Most gas wells do not feed into any streams or rivers, meaning they are nontributary, according to a map released last month by the state engineer's office.

Users of tributary water can be required to have a plan to replace that water in times of shortage, guaranteeing a supply for senior right holders. Having their wells designated as nontributary frees gas operators of this requirement.

Critics of the process said the determination was based on modeling done by the industry.

“There's always this question of do they start with the result they want," Huff said.

But Wolfe said the modeling was the most sophisticated and complete done to date.

He said an earlier study commissioned by his office found more tributary water but was less detailed and more conservative.

“It was kind of this cursory evaluation," he said.

Huff said if the water is nontributary, it is presumed to belong to the landowner.

But this assumed ownership, which doesn't apply to nontributary water withdrawn for gas and oil development, can be trumped unless it is adjudicated in water court.

Most domestic wells are exempt from the priority system because their usage is deemed to be minimal.

Though landowners could go to court to assert the right to their nontributary water, they may go from being exempt to being at the back of the line and potentially subject to being cut off in times of scarcity.

“The threat by the state is that you could be turned off when the river goes on call," Huff said. “There is that stick that is out there. I don't know if that's a reality."

Huff acknowledged nobody else is clamoring for gas companies' produced water.

“If it's nontributary and it's really not connected, then maybe it doesn't matter," she said.

But she's not entirely convinced.

“I think that they should have to prove that it's nontributary in the court,"

she said.

kburford@durangoherald.com

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