DURANGO, Colo.—Companies pumping groundwater to tap gas in coal seams are subject to state water law and must obtain permits like other water users, a water court judge has ruled in a case with potentially far-reching effects on the oil and gas industry.
The ruling Monday by a Durango-based water court judge in a 2005 lawsuit filed against the state engineer’s office could immediately affect at least 1,200 gas wells in southwestern Colorado.
Two ranch families concerned that companies extracting natural gas from coal seams will endanger the streams and seeps they depend on for their livestock, hay pastures and other uses filed the lawsuit.
BP America Production Co., which has several coal-bed methane wells in the area’s San Juan Basin, intervened in the case in support of the state engineer. BP spokesman Dan Larson said the company is studying the case and it wasn’t immediately clear if the ruling would force the company to shut down any wells.
Large amounts of water are pumped from coal seams to release trapped methane gas.
“The court has properly found that the gas industry can’t keep jeopardizing our way of life and that the state can’t keep ignoring that they are,” said Jim Fitzgerald, one of the ranchers.
The families filed the lawsuit after the state engineer’s office decided against requiring energy companies to get water permits or file plans to replace water they use. Attorneys for the state engineer argued that water produced during coal-bed methane production was a waste byproduct and subject only to Colorado Oil and Gas Conservation Commission rules.
But District Judge Gregory Lyman in his ruling said that when the companies pump groundwater to extract gas, they are putting the water to “beneficial use,” a legal distinction that places water users under the jurisdiction of the state engineer. That means companies must defer to those with senior, or older, water rights and ensure they don’t endanger other users’ water supplies.
“Our clients are certainly not interested in shutting down coal-bed methane operations in Colorado,” said attorney Sarah Klahn, who represents the families. “They’re interested in seeing them proceed sanely.”
Klahn said companies typically inject the water several thousand feet into the ground, making it inaccessible to her clients.
Spokesman Nate Strauch said the Colorado attorney general’s office, which is representing the state engineer, is reviewing the ruling to decide whether to appeal it to the Colorado Supreme Court, which oversees the water court.
Larson, BP’s spokesman, said the decision, “creates some confusion around application of the law.”
“The company has and will continue to comply with state laws,” Larson said.
Klahn said she and other attorneys for the plaintiffs sought curtailment of any water production that is in violation of state water law.
Klahn represents ranchers in a similar case in northeast Wyoming, a large coal-bed methane producing area. Area residents have raised concerns about companies dumping the water on the ground because the water is high in sodium and other salts that can kill crops and damage soil if used for irrigation.
The water is considered generally acceptable for animals, which have a higher salt tolerance.
