Environmental Report Calls Water Reinjection Feasible for Powder River Basin Gas: Greewire

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Greenwire Page 2 of 3 CBM development produces large volumes of groundwater, and the amount extracted is significantly higher in the Powder River Basin than other CBM producing areas, according to the study, which notes that Powder River Basin CBM wells average 400 42- gallon barrels of water produced per day for each well. Currently, coalbed methane producers in the basin often discharge the water directly into rivers and drainages or store it in surface impoundments. The water is sometimes used for irrigation and livestock watering. Industry notes there are many beneficial uses from keeping the water on the surface, such as livestock watering, but critics of expanded development worry about depletion of groundwater sources and that salty groundwater harms surface waters and soils. One major industry player says environmentalists' calls for widespread underground injection of produced water could not occur alongside aggressive development of CBM in the Powder River Basin, but says technologies are increasingly becoming available to treat produced water prior to surface discharge. Mike Caskey, executive vice president and chief operating officer of Denver -based Fidelity Exploration & Production Co., says the company has "looked and looked and looked" for suitable areas in Montana for produced water injection. "It is just not a tool that is widely available," he said. Fidelity is the only company that is currently producing CBM in Montana, but other companies are seeking to begin operations. Caskey said that large scale reinjection would run the risk of repressurizing areas, thereby preventing gas extraction. But a consultant who prepared the study for the Northern Plains Resource Council -- which works with activists, ranchers and other concerned about expanded CBM production -- says injection into areas from which gas has already been extracted is feasible if CBM is developed at a "sustainable" rate. "If everyone tries to produce from every well at the same time it is not possible," said Jim Kuipers of Kuipers and Associates, who has been a consultant to various environmental groups, mining companies and government agencies. Instead, he says that "staging" development can allow for reinjection at sites where the gas has been recovered. According to the study, the "most sustainable practices" are "re- injection into aquifers depleted or otherwise affected by CBM production," and "injection or percolation into depleted aquifers with water treatment as necessary to protect and /or enhance water quality." Other preferred options are use of treated water for "crop, livestock, municipal or industrial use." It estimates that at $5 per thousand cubic feet, CBM producers' return on investment would decline very little by re- injecting the water. The study concludes that produced water at CBM sites should be subject to effluent guidelines under the Clean Water Act (CWA) that require reinjection or treatment prior to discharge. The findings are based in part on a draft 2003 copy of an unreleased U.S. EPA stud aimed at advising federal regulators drafting CWA discharge permits for CBM production on tribal areas in the agency's Region 8, which includes the Powder River Basin. The economic analysis concludes that re- injecting produced water is possible but would limit production to some degree, especially when using "deep well" injection into existing wells. "Deep well injection costs are even higher and production losses may total 25 percent of the baseline, but if existing wells are converted to deep well injection, the costs may be feasible," the analysis states. http: / /www.eenews. net / Greenwire /Backissues /090304/09030407.htm 9/3/2004