09d

• Board Meeting Date: 3/18/2008
• Description: CWCB Director's Report
• Board Meetings - Doc Type: Memo

Preferred Alternative in the Final PEIS and further recommended that the BLM explicitly commit to
preparing a supplemental PEIS at a later date, when adequate inforniation is available and do so prior to
proceeding with the establishment of commercial oil shale regulations and the subsequent offering of
commercial leases. Copies of the extensive comment letter will be made available to Board members if
desired.
COMPACT CASE COULD IMPACT STATE -The U.S. Supreme Court recently accepted a case
filed by Montana against the state of Wyoming, claiming that coalbed methane has contributed to
depletion of water in the Tongue and Powder rivers in violation of the Yellowstone River Compact. North
Dakota also is a party to the 1950 compact.
Montana also raises issues of increased storage and irrigated acreage as reasons for the compact violation,
but more than 20,000 methane wells have been drilled in the river basins. Wyoming counters that
Montana has not proved injury.
Colorado officials are debating whether to file as an interested party in the case, since it could face some
of the same issues, said State Engineer Dick Wolfe.
Colorado has mining and drilling operations in three different basins that produce water from drilling
operations. The case also has some similarities to the Republican River Compact case, said State Engineer
Dick Wolfe.
Colorado now treats produced water as a `~n-aste" product, although a pending state Supreme Court case
could change that. Last summer, a water court judge in Durango ruled water pumped from coalbed
methane operations had the potential to injure the water supplies of nearby ranches and constituted a
"beneficial use" under Colorado water law.
The state appealed the decision, saying produced water is adequately regulated as a waste product and
falls under the jurisdiction of the state Oil and Gas Conservation Commission, rather than the Division of
Water Resources.
Wyoming, on the other hand, issues water well permits to energy drillers, Wolfe said.
In the Arkansas River Basin, about 2,000 oil and gas wells produce about 2,500 acre-feet of water
annually in the Raton Basin, according to a draft report on an investigation by the Colorado Geological
Survey.
There has been new concern by well owners near Walsenburg about methane in the water supply creating
a dangerous situation.
The Colorado Geological Survey study concluded most of the quality of water produced by the gas wells
was suitable for beneficial use.
Colorado does not now recognize the removal of water in the drilling operations as a beneficial use, as the
Durango ranchers claimed, which would require it to become part of the priority appropriation system,
Wolfe said.
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