On an average day in Wyoming, energy companies
drill nine new wells to pull methane gas out of the state’s coal
beds. In 1995, the state had 427 coalbed methane wells. Now, the
total is more than 21,000, and another 30,000 have been approved,
according to Don Likwartz, supervisor of the Wyoming Oil and Gas
Conservation Commission.
The government agencies charged with overseeing
this industry are having a hard time keeping up with the rush.
Most of Wyoming’s coalbed methane drilling occurs
in the Powder River Basin — 14 million acres of rolling plains in
the northeastern part of the state. The U.S. Bureau of Land Management
has leased 95 percent of its mineral rights in the basin to energy
companies. The resulting new roads, power lines and pipelines all
have environmental impacts. But most worrisome to landowners are
the millions of gallons of water that developers pump out of the
ground to access the gas. This water is often high in minerals and
salt — each well produces an average of 20 tons of salt per year
— and when wastewater spills or leaches into the ground, it can
destroy ranchland and wildlife habitat.
The wastewater is supposed to be regulated by
state and federal agencies (HCN,
11/5/01: Wyoming’s Powder Keg). But it has recently become apparent
that many drillers have been operating below the regulators’ radar.
In January, a survey by the state engineer’s
office, which oversees water rights, revealed that less than half
of the 217 coalbed methane reservoirs in one drainage in the Powder
River Basin had the required permits. Energy companies were illegally
using 125 unpermitted reservoirs to hold salty wastewater. Similar
violations are probably occurring across the state, says Likwartz.
"The struggle that we have is that we have not
added personnel to deal specifically with reservoir control," says
Harry LaBonde, deputy state engineer.
Ranchers and environmental groups have been asking
for enforcement and monitoring for years, but only in the last six
months have legal decisions and administrative moves begun to tighten
the reins.
The discovery of the unpermitted reservoirs has
prompted the state engineer’s office to ask the Legislature to allow
for fining violators up to $1,250 per day. Currently, there are
no penalties. The state engineer has also requested $150,000 to
survey all of the state’s reservoirs.
"There is no doubt that we are playing catch-up,"
says LaBonde. "But the state, and government in general, normally
does not staff up in anticipation of development."
Gov. Dave Freudenthal, D, has echoed the call
for more funding. "For this development to proceed, it is critical
that the state provide a sufficient regulatory mechanism to address
and mitigate the effects of the development," Freudenthal wrote
in a letter responding to the survey’s findings. "Especially given
the importance of coalbed methane development to the state’s financial
health."
According to Likwartz, in 2004, coalbed methane
generated about $144 million in tax revenue for the state. Over
the next 75 years, the estimated 25 trillion cubic feet of gas under
Wyoming’s soil could bring the state more than $10 billion in tax
revenue.
Wyoming’s Department of Environmental Quality,
which issues permits for surface water discharge, hired eight new
staff members in 2004 to deal with the twenty-fold increase in permit
applications since 1997. "The current staffing levels are adequate
to do what we need to do," says Todd Parfitt, the department’s program
manager. Yet the department has only six field inspectors, who are
responsible for the 900 permitted sites and also have to respond
to all complaints.
"There is no muscle or backbone behind the enforcement,"
says Jill Morrison of the citizens’ group Powder River Basin Resource
Council. Federal agencies, such as the U.S. Army Corps of Engineers
and the Bureau of Land Management, have tried to streamline the
permitting process, but their laxness is coming back to haunt them
in the courts.
Under the Clean Water Act, the U.S. Army Corps
of Engineers permits the discharge of water and dredge materials
from gas drilling in any interstate rivers and their tributaries.
In 2000, the Corps issued a statewide permit that pre-authorized
gas companies to go about their business without applying for individual
permits.
The Wyoming Outdoor Council sued the Corps, and
in early January, U.S. District Court Judge William Downes declared
that the general permit is illegal because it did not consider the
cumulative environmental impacts of coalbed methane development.
And last August, the 10th Circuit Court came
down hard on the BLM. The court determined that three BLM leases
to Pennaco Energy Inc. in the Powder River Basin should have specifically
looked at the impacts of water disposal methods used in coalbed
methane drilling, rather than assuming that the methods would be
the same as for traditional oil and gas extraction. BLM staff will
now have to review 417 other leases, and possibly add environmental
protections, or even buy out the leases.
"Certainly, things are changing to fit new situations,"
says Richard Zander, associate field manager for the BLM’s Buffalo
office. "And we’ve adapted to fit those changes."
The author is an intern at High Country News.
CONTACTS:Powder River Basin Resource Council www.powderriverbasin.org
307-672-5809
Wyoming Department of Environmental Quality deq.state.wy.us 307-777-7937
Bureau of Land Management Wyoming office www.wy.blm.gov 307-775-6256
