Probe finds wastewater well company linked to earthquakes did not violate rules

GREELEY – NGL Water Solutions DJ LLC, the company whose oil and natural-gas wastewater well was linked to earthquakes near Greeley, neither violated its permit from the state Oil and Gas Conservation Commission nor broke the state agency’s rules, an investigation by the state of Colorado has concluded.

“After a detailed examination, the COGCC determined that NGL remained within the parameters of its permit and did not violate agency rules,” said Todd Hartman, spokesman for the state Division of Natural Resources, the agency that oversees the state oil commission.

NGL senior vice president Doug White issued a statement regarding the ruling.

“NGL maintains all of its operations in strict compliance with regulatory and safety standards,” White said.

Hartman said the state agency also granted a request by NGL to boost by 20 percent — to 12,000 barrels per day — the amount of wastewater the company can inject into its well, known as C4A, near Greeley.

“NGL and the University of Colorado both continue to have seismometers near the C4A well to monitor activity and COGCC is in communication with both entities,” he said.

The decision to allow NGL to increase its disposal volume follows low-level quake activity captured by a state monitoring program.

Since injections were temporarily suspended at the well in June, earthquakes have occurred near the 10,400-foot-deep well, according to documents obtained by BizWest through a Colorado Open Records Act request. At least one was nearly as large as the event that triggered a state investigation.

Last summer, the Colorado Oil and Gas Conservation Commission briefly suspended activity after large quakes struck and a public outcry erupted. Injection activity was then allowed to resume in late July and the state launched an investigation into whether NGL had violated the terms of its disposal permit.

The permit, granted in the spring of 2013, allows the company to inject 10,000 gallons of wastewater daily. After the incidents last spring, however, the state required NGL to cut back the amount of water it injected. The amounts injected have been allowed to increase gradually and subsequent small quakes have been documented.

Matt Lepore, director of the state oil commission, said that NGL is being allowed to inject the additional wastewater below a certain pressure. Keeping that pressure constant, combined with an effort last year by NGL to seal off the bottom portion of the well, will help lessen the chance of future felt earthquakes occurring.

“We have actively managed this particular circumstance in a way that we feel comfortable with,” Lepore said.

The risk of additional earthquakes occurring that could be felt is “small,” he said.

“We think the risks can be managed,” he said. “We think we have done that at this location.”

In Northern Colorado, the drilling technique known as hydraulic fracturing, or fracking, generates enormous amounts of wastewater that oil companies typically inject thousands of feet underground.

Fracking involves pumping millions of gallons of water mixed with sand and chemicals into a drilled hole to extract oil and gas from dense shale formations. Injection wells such as the one operated by NGL are designated specifically for wastewater and regulated by state authorities. NGL operates many of the permitted disposal wells in Weld County.

In an Oct. 28 email, NGL told the state oil commission that it was “not aware of any abnormal seismic activity in the area” and asked the agency to increase its maximum daily injection rate to 12,000 barrels of wastewater per day.

The agency has said the 10,000 barrel-per-day maximum listed on the permit “is not a binding limit.” NGL said it “vigorously objects” to the state oil commission establishing a daily injection rate limit.