Coalbed Methane Produced Water In The Western Us

sion would have little impact on surface water. In contrast, tributary water is water that contributes flow to surface water and therefore impacts senior water rights on the surface water. A water well permit for tributary water use would have to address senior surface water rights (under the prior appropriation doctrines) and require approval of an augmentation plan in Colorado water court (Rein, 2009).

Recently, the entire landscape regarding Colorado's regulation of CBM operations and produced water was overturned in Vance et al. v. Wolfe by the Colorado Supreme Court whose decision can have broad implications for oil and gas producers in the state. In April 2009 the Court ruled that extraction of tributary groundwater produced from CBM wells is a "beneficial use" of water that must be regulated under state water laws. The decision also determined that CBM wells producing tributary groundwater are, in effect, water wells that require well permits issued by the State Engineer and, where applicable, these wells may also require a court-approved plan (an augmentation plan) to replace out-of-priority depletions to impacted stream systems.

Vance involves the appeal of a declaratory judgment issued by the Water Court for Water Division 7, which has jurisdiction over all "water matters" in the San Juan River Basin in southwestern Colorado. The plaintiffs were ranchers and landowners who own surface water rights in the basin, which they claimed could be impacted by water withdrawals related to CBM production.

In affirming the Water Court's decision, the Colorado Supreme Court in Vance ruled that extraction of water through CBM wells constitutes beneficial use and an appropriation of water; thus, CBM wells that produce tributary water are subject to water well permitting, water court adjudication, and administration in Colorado's water rights priority system. In so ruling, the court expressly declined to give deference to the State Engineer's longstanding policy of refusing to regulate produced water on the grounds that it is a waste product subject only to the jurisdiction of the COGCC (Colorado Supreme Court, 2009).

To deal with the implications of Vance, the Colorado General Assembly passed House Bill 09-1303, which would provide an orderly process for bringing CBM wells that produce tributary groundwater into the state's well permitting and water rights administration system. Under the legislation, operators of CBM wells that produce tributary groundwater will be required to obtain well permits and administrative approval of plans to replace depletions caused by well pumping, no later than March 31, 2010. Operators will be required to file applications with the water court for approval of long-term "plans for augmentation" no later than December 31, 2012. The legislation also authorizes the State Engineer to adopt rules to assist with regulation of the production of nontributary groundwater by delineating areas of nontributary groundwater withdrawal. If produced CBM water can be shown to be nontributary, the need for water well permitting and an augmentation plan can be avoided for a CBM well and its produced water (Rein, 2009).

New Mexico

The Office of the State Engineer for New Mexico has jurisdiction over the supervision, measurement, appropriation, and distribution of all surface water and groundwater resources in New Mexico. Under New Mexico law, all ground- and surface waters belong to the public and are subject to appropriation under the Doctrine of Prior Appropriation.41 However, the State Engineer has no authority over aquifers containing nonpotable water located 2,500 feet or more below the land surface. In New Mexico most CBM wells fall under this provision and are, therefore, not permitted by the State Engineer (New Mexico Legislature, 2009).42

The New Mexico Environment Department (NMED) oversees the main environmental protection laws for the state, including surface water quality through NPDES permits and issues related to watershed protection.43 The Water Quality Control Commission (WQCC), an administrative part of the NMED, has responsibility for enforcing the Water Quality Act and delegates authority for enforcing certain regulations under this act to the Oil Conservation Division (OCD).44

The OCD of the New Mexico Department of Energy, Minerals, and Natural Resources, under the New Mexico Oil and Gas Act, administers "water produced or used in connection with the drilling for or production of oil and gas" and may regulate surface or subsurface disposal of produced water to protect freshwater sources (New Mexico SWQB, 2000). CBM produced water is not explicitly regulated by existing state regulations but is included under the provisions of the Act. Approved disposal methods for produced water include lined pits, below-grade storage tanks, and treatment and discharge for beneficial uses. As of 1993, unlined pits were prohibited by state law. The OCD regulates subsurface injection of produced water in Class II wells and is the lead agency for the UIC program for the state, because most injection wells in New Mexico are associated with oil and gas production; 99 percent of CBM produced water in the state is managed by deep-injection wells. The OCD also performs groundwater monitoring to carry out responsibilities delegated to it by the WQCC and to ensure reasonable protection of fresh water as required by the New Mexico Oil and Gas Act (New Mexico SWQB, 2000).

CHAPTER SUMMARY

The requirements associated with leasing and permitting CBM operations on federal and tribal lands through BLM and protecting water resources on federal, state, tribal, or

41See www.ose.state.nm.us/ (accessed March 4, 2010).

42M. Fesmire, presentation to the committee, June 2, 2009.

43See www.nmenv.state.nm.us/SWQB/ (accessed March 4, 2010).

44See www.netl.doe.gov/technologies/PWMIS/regs/state/newmexico/index.html (accessed March 4, 2010).

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