Energy firms’ water sources hard to tap

Unlike other states, Colorado does not require oil and natural-gas companies to disclose the source of the water they use for drilling, according to a new analysis by the University of Colorado’s School of Law, raising concerns about water planning in a drought-ridden region.

Laws in seven states require oil and gas companies to report the physical source of surface or groundwater used for oil and gas development: Utah, Oklahoma, Louisiana, Ohio, West Virginia, Pennsylvania and New York.

Colorado and Wyoming do not require oil and gas companies to state the source of the water, whether it comes from cities or towns, farms or ranches or the companies’ own recycling operations.

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The study of state regulation comes from research done by CU law students as part of an effort by the school’s Getches-Wilkinson Center for Natural Resources, Energy and the Environment to compare and contrast regulations on water quality and quantity in oil and gas development in 13 major shale oil- and gas-producing states. The analysis covers water reporting requirements, administration systems and disposal methods.

The Colorado Oil and Gas Conservation Commission, the state oil regulatory agency, does not require operators to identify water sources on drilling permit applications primarily because the agency does not have authority over water administration, said Todd Hartman, spokesman for the state Department of Natural Resources, which oversees the state oil commission.

The state oil commission, however, is sharing drilling notifications with the state Division of Water Resources so engineers in that agency can follow up with oil companies when necessary to ensure they have a legal source of water, Hartman said. The state oil commission also requires oil companies to report water quantities used.

Wyoming’s rule is similar to Colorado’s in that the state does not require an operator to report physical sources of water, said Tom Kropatsch, deputy oil and gas supervisor for the Wyoming Oil and Gas Conservation Commission. The state does require that companies report what type of water they are using – for example, fresh water or produced water – which rises to the surface during oil and gas production.

Other states that require oil and gas operators to report physical sources of water tend to include spaces for reporting on two forms: one before the company drills and another after the company completes a well, said Matt Samelson, an attorney who consulted on the database project for the Getches-Wilkinson Center.

“In order to provide a full picture, the source of water used is needed,” Samelson said.

The lack of reporting has raised concerns among environmentalists and researchers who have tried to track the use of water in oil and gas development. They worry that lack of information about physical water sources could hamper water planning in the South Platte River Basin, which has suffered from drought and rising water prices in recent years.

Laura Belanger, water resources engineer for Boulder-based conservation group Western Resource Advocates, said that knowing where water used in oil and gas comes from would help the state better plan for water use.

“We do water planning as a state because we need to figure out what future demands are going to be and where that water is going to come from,” she said. “If we don’t have a handle on what oil and gas is requiring and where they’re getting their supplies from, that makes it really difficult for us to plan for the future.”

A study by the state of Colorado forecasts a shortage of more than 3 million acre feet in Colorado River water by 2060. An acre foot equals 326,000 gallons, enough to supply 2.5 households annually.

Northern Colorado and the Boulder Valley get a portion of their water from the Colorado-Big Thompson Project, which transports water from the Colorado River Basin to the Front Range through the Adams Tunnel. Demand for water will increase from an average 15.3 million acre-feet annually to between 18.1 million and 20.4 million acre-feet, according to the Colorado River Basin Water Supply and Demand Study.

The oil industry argues that it uses less than 1 percent of the state’s annual water use. But in Northern Front Range area, scarce water resources in the South Platte River Basin have pressured growing municipalities and agriculture.

“When you add in oil and gas also, that’s a significant new player in the area,” Belanger said. “It would be extremely useful and beneficial to everyone in the state if we did understand better where those water supplies were coming from.”

It’s unknown what portion of water used in oil and gas development comes from purchases made from cities, farmers or from other private landowners, but Colorado State University is researching the subject.

Julie Kallenberger, water education and outreach specialist for the Colorado Water Institute at CSU, and a team of researchers gathered data on oil and gas water sources for almost two years and now have begun to analyze it. Researchers do not have an estimate of the percentage of water that comes from various sources, but they hope to determine that information. They also plan to look at issues such as whether some farmers have decided to sell their water to oil and gas companies instead of using it to produce crops.

The team has looked at water sources mostly in Weld and Garfield counties, cobbling together data from Internet sources and meetings with the state oil commission.

“It’s been a challenging effort to find information,” she said. “One of the things we’re going to have to do is acknowledge that there are going to be gaps in the data, because we’re not certain we have it all.”

Steve Lynn can be reached at 970-232-3147, 303-630-1968 or slynn@bizwestmedia.com. Follow him on Twitter at @SteveLynnBW.