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Dealing with drilling in the Fruitland Outcrop

By Lindsey Bright
Staff Writer

Last summer, July 2011, an unintended occurrence happened deep in the geologic layers beneath Archuleta County near the Fruitland Outcrop.

Petrox Petroleum had a permit, through the Colorado Oil and Gas Conservation Commission, and a lease to drill on private land into subsurface land with privately-owned mineral rights.

According to Brad Dodd, physical resources assistant manager for the San Juan region of the Bureau of Land Management, Petrox had a permit to drill a coal-bed methane (CBM) well into the private land. What happened on a horizontal lateral of the Candelaria 10U No. 3, however, was that they drilled through the private land and into federal land, then back into private land.

The drilling into federal land had not been permitted as part of the application for permission to drill (APD) process with both the U.S. Forest Service and the Bureau of Land Management. The process that operators must go through to acquire an APD to drill in the Northern San Juan Basin was developed over several years since 2001 when five operators requested that the well density in the area be increased from 320 acre well-spacing to 160 acre well-spacing, or from two wells per square mile to four wells per square mile. Due to this request, a process for completing and approving an environmental impact statement was begun to analyze the possible impacts. The EIS was approved in 2007. USFS Walt Brown, Columbine district geologist, said the EIS has been appealed several times but, up to this date, has been upheld by the courts. San Juan National Forest Supervisor Mark Stiles wrote the Record of Decision.

“Part of the record of decision was an outcrop zone approach,” explained Brown, who has been involved with the process for several years. This included a variety of stipulations if an operator were to drill, explore or develop within the one and one-half miles surrounding the outcrop zone. The ROD states, “Within Archuleta County, drilling within 1 1/2 miles of the outcrop will be permitted following an incremental, monitor-and-evaluate-as-you-go approach.”

The outcrop zone approach requires that operators intending to do subsurface mitigation, hydrologic balance or gas well development within the outcrop zone must: Document the existing environment in the proposed project area and submit documentation with the APD, prepare a drilling, production, monitoring and mitigation plan, monitor projects with data collection systems, collect project monitoring data for the amount of time necessary to reasonably characterize and quantify potential effects, evaluate and submit project monitoring and characterization results on at least a quarterly basis unless otherwise authorized, identify and document any abandoned coal mines within two miles, prepare and submit an annual outcrop impact risk assessment report for the project, and establish a working group to assist in further developing this decision framework and the related modeling and to assist in the evaluation of the data collected.

This last point would involve the Technical Working Group (TWG) along with the Northern San Juan Stakeholder’s Working Group.

In order to comply with the regulations set forth in the ROD, Petrox hired LT Environmental Inc. to prepare a Outcrop Zone Report. The report states its purpose is also to “characterize the Project Area and evaluate the existing conditions for future CBM production of federal minerals within the outcrop zone.”

“Petrox was the first to trigger this approach,” Brown said. Brown added that the Outcrop Zone Report, along with the APD, should have been submitted prior to drilling in subsurface federal land.

“The state caught the mistake, confirmed that Petrox had drilled through federal land and required that Petrox produce an APD,” Brown said.

The Petrox report was presented to the technical working group (TWG), consisting of petroleum engineers and geologists, on Sept. 18. The TWG outlined and detailed what data and monitoring Petrox would continue to do and send to the TWG. Such data and monitoring includes water chemistry data from new production wells, initial downhole pressure data for new drill production wells, coal desorption data and more.

The summary from this TWG meeting ends with, “The Outcrop Zone Report and subsequent monitoring will be utilized for all APDs within the Fosset Gulch Unit for Petrox,” which gives some of the stakeholders pause. If this report is to be a standard used for further APDs in the project area, then landowners Kathleen Delzell and Jim Fitzgerald, as well as former San Juan Citizens Alliance Energy Issues organizer Josh Joswick (all members of the stakeholders group), believe adequate time should be given them to respond.

Brown said that the timing was short, adding, “The BLM was under some pressure to keep the APD process moving.”

The report was presented to the stakeholders group at a meeting on Sept. 26. They were given until Oct. 24 to comment. However, Dodd said this date was extended upon request. On Nov. 7, the APD was approved by the USFS and BLM.

“We felt the report meets requirements of the record of decision for this particular APD. The BLM has the ability to modify the permit anytime based on new data for the life of the well,” Brown said. He also reiterated that this is a living document. Comments from landowners, stakeholders and interested parties will always be accepted and evaluated in regards to the well.

Delzell, a land and mineral owner on the Archuleta County side of the Fruitland outcrop since 1962, pointed out that, in the Powerpoint presentation LTE gave to stakeholders on Sept. 26, it was stated that springs dry up in the winter time. In the presentation, the slide titled “Hydrogeology” states, “There are 27 (natural springs) identified along the Kf (Fruitland) outcrop in the Project Area,” and the next line states, “Flow in late spring and run dry during the summer months.” Delzell, however, said that the way she gets water is from her well in the summer months.

“If they start drilling around there, will I still have water? I don’t know,” Delzell said.

Brown said that surface and ground waters not inventoried yet would be added to the report. Also, based on the technical working group’s comment, after a new well is put on line, pressure monitoring will be required.

Delzell said that she would have liked more time to thoroughly review the 220-page document. “If this is what people are going to look back to, I want it to be right,” Delzell said.

Brown said that though the document is approved, it may still be amended. He also affirmed that this document will be used as the starting point for future APDs both from Petrox and other interested operators.

“We’d recommend they start with this document and update it as appropriate,” Brown said.

In fact, this report is already being used by operators applying for APDs in the area.

Fitzgerald said that, typically, wells for coal-bed methane typically are shallow, only 700-800 feet. A major concern from the stakeholder committees, Fitzgerald and Josh Joswick, with San Juan Citizens Alliance, involves the potential for coal fires on the outcrop.

“The portion of the report about the potential for coal seam fires was deficient. The data they presented was not adequate,” Joswick said.

Joswick related how, in 1998, in Valencia Canyon in La Plata County, a coal seam fire started and is still burning today. The major problem with a coal seam fire is the potential for it to continue burning because there is no economically feasible way to put the fire out. Orr said he thinks he and his colleagues have discovered a way to put coal fires out, however, it is too expensive to be put into practice.

Franklin M. Orr, Jr., a director of the Precourt Institute for Energy at Stanford University, has studied a coal fire that has been burning on the Southern Ute Indian Reservation for the past several years. Orr said he had no initial research interest in coal fires, but one man at the Ute reservation kept pestering him until finally he took a trip out to San Juan Basin.

Orr explained that the coal bed in the San Juan Basin resembles a tipped up pie plate. The part tipped up, coming out of the surface, is the outcrop.

There are several coal fires burning in America, China and Indonesia. The longest burning coal fire is one in Centralia, Penn., that has been burning since 1962.

For a coal fire to ignite, Orr explained that several factors must be in place. There must be fuel, such as coal or methane. There must be oxygen.

Lastly, there must be heat.

“There has to be enough heat to get it started,” Orr said, adding, “Conditions are pretty widespread once you get to the outcrop.”

In Orr’s opinion, more than drilling development, lightning strikes are the most likely ignition source.

However, Joswick mentioned the close proximity of the outcrop to U.S. 160 on the Archuleta County side of the outcrop.

“The outcrop runs under 160 for one and a half miles. If a coal seam fire starts under than and it gets out of control under 160, then what happens? We raised that issue,” Joswick said. The report did not have an answer for that.

Fitzgerald said these fires also emit a large amount of greenhouse gases.

The comments Joswick submitted on behalf of the San Juan Citizens Alliance emphasize these potential hazards. “The concern is that the potential for coal seam fires at the Fruitland outcrop in the Project Area needs to be analyzed. From reading the report, what is written about coal seam fires does not sufficiently address this concern,” the comments states.

Most of the comments are similar to those relating to specific sections of the 200-plus page report. However, Joswick writes in the last paragraph of the Alliance’s comments, “If the NSJB Stakeholders Group is going to be anything more than a one-way information sharing exercise, the stakeholders must be given more lead time for participation, for the reasons I have mentioned here, (…) and for the BLM to live up to the initial commitment we believe was made about what our role is, as ‘stakeholder.’”

Brown acknowledged that the process was not as smooth as it could have been.

“This was the first time through complicated process. There were dilemmas with timeframes,” Brown said, adding, “Hopefully, we’ll learn from our mistakes of the past and move forward.”

Moving forward, said Brown, would include the BLM and USFS enhancing communication with stakeholders’ groups and working out the kinks in the approach to future drilling in the outcrop. However, those involved with the stakeholder’s working group are not satisfied with how rushed this first APD process was.

lindsey@pagosasun.com

This story was posted on November 19, 2012.