December 31, 2014

Newsmakers July 25-Aug. 7: Oil, gas firms dig deep for new water

Applications to the state of Colorado to use deep underground aquifers for oil and gas development in Northern Colorado surged, reflecting the new lengths that oil and gas companies have gone to obtain the scarce resource in the South Platte River Basin.

More than a dozen distinct parcels of land have applied to withdraw a total of 35,600 acre feet of non-tributary groundwater for potential use in oil and gas development since 2011, according to the state Division of Water Resources. The total nearly triples the 12,700-acre-foot capacity in Lake Loveland.

An acre-foot equals 326,000 gallons, or enough to supply the needs of 2.5 households in one year. Non-tributary means groundwater that is not believed to significantly connect to tributary water that feeds surface water systems such as rivers. The ancient water typically is located hundreds of feet below the surface and derived from glacial melt or prehistoric seawater. Drilling wells to reach it can be costly.

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By contrast, the state agency saw no applications for non-tributary water use specifically for oil and gas before 2011, said Kevin Rein, deputy state engineer in the state Division of Water Resources. The present oil boom began in 2009 after EOG Resources Inc. (NYSE: EOG) drilled the Jake well. Last year, oil production set a record at more than 64 million barrels, 80 percent of which came from Weld County.

Unlike rivers and streams where people own water rights in various places, non-tributary water can be diverted by property owners if they can show it would not affect stream and river flows. Applicants must demonstrate through scientific evidence and modeling that the aquifers are in fact non-tributary before they can receive state permits to use the water.

Noble Energy Inc. (NYSE: NBL), among the top oil and natural-gas producers in the region, alone has applied for nearly 4,700 acre feet on the Wells and Ball ranches in Weld County. The company last year said about 80 percent of its water came from wells and ponds, 18 percent came from cities and 2 percent is recycled.

UPDATE

Rein, the deputy state engineer, said that the Division of Water Resources has not approved any additional non-tributary water use for oil and gas development since BizWest first reported the story in July.

Meanwhile, it’s unclear how much of the water is being pumped or sold for oil and gas development for applications that the state has approved.

“For those that have been approved, although they are required to keep records of their pumping, at this time we are not requiring submittal of those records,” he said. “So I can’t answer as to the amount, if any, that is being used or is involved in a sale.”

A Noble Energy spokesman did not respond to requests for comment on the company’s use of non-tributary water.

Applications to the state of Colorado to use deep underground aquifers for oil and gas development in Northern Colorado surged, reflecting the new lengths that oil and gas companies have gone to obtain the scarce resource in the South Platte River Basin.

More than a dozen distinct parcels of land have applied to withdraw a total of 35,600 acre feet of non-tributary groundwater for potential use in oil and gas development since 2011, according to the state Division of Water Resources. The total nearly triples the 12,700-acre-foot capacity in…

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