DURANGO, Colo.—The state has asked that a water court ruling with potentially far-reaching effects on the oil and gas industry be put on hold while it prepares an appeal.
The state engineer’s office is also seeking clarification of the July 2 ruling by a Durango-based water court judge that water produced during natural gas drilling is subject to state water law.
Denver attorney Sarah Klahn, who represents the two ranch families whose lawsuit led to the ruling, said Thursday that she is preparing a response to the state’s motions.
District Judge Gregory Lyman’s ruling applies to groundwater pumped out when natural gas is extracted from coal seams. Pumping the water helps release methane gas trapped in the seams.
Lyman said 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.
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.
The decision stems from a lawsuit by two southwest Colorado ranch families concerned that the pumping of vast amounts of water will endanger the streams and seeps they depend on for their livestock, hay pastures and other uses.
In a motion filed Tuesday, the state engineer’s office argued the families haven’t proved imminent harm to their water rights or other interests. By contrast, the state engineer’s office said it would be overwhelmed dealing with water permits for about 2,000 coalbed methane wells in southwest Colorado.
Coalbed methane operations in the San Juan Basin, one of the country’s largest coalbed methane producers, might have to be suspended while the office processes water permits and gas companies file water rights and water augmentation plans, according to the state engineer’s motion.
“The Court’s Order reverses a long-standing Colorado policy in a manner that has the potential to adversely affect water users, oil and gas producers, communities and consumers across the state,” according to the motion.
BP America Production Co., which has several coal-bed methane wells in the area, filed a motion supporting the engineer’s request for a stay of the decision.
A similar case is under way 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.
