Archives for October 2012

RE: 10-30-2012 Oil and Gas Committee Meeting, last night was definitely a trip to the sausage factory.  Will I ever taste those delicious sizzling patties quite the same way?

At the risk of over simplification, since the last meeting in August, planners have moved off of their 65 page opus of new zoning law as the preferred vehicle for regulating oil and gas development.  And they’ve considered and moved off from establishing a memorandum of understanding [MOU] with the Colorado Oil and Gas Conservation Commission [COGCC], the state regulatory agency.

Rather than use county zoning law, or state regulatory law, to control this industry, they’ve decided to write MOU’s directly between the county and oil and gas developers.  They still plan to put all the same regulatory requirements into each deal as had been anticipated in the draft zoning documents.  Now, however, those details will be contractual rather than regulatory.

Moreover, the details may attract less public attention because they won’t be written into law.  They’ll be handled by attachments to boiler plate MOU contract language that will come out of private negotiations between developers and the county.

A regulatory distinction without a difference you might say, and I would agree.  From a property holder’s perspective, would a government taking under the 5th Am. be any less of one if enforced through a contractual process required to receive a permit to exploit minerals, rather than through a zoning law containing much the same language?

Here are the working documents under discussion at the meeting.

10-30-2012 Draft Memorandum of Understanding

10-30-2012 Two Draft Permit Methods

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Now to my issue.  If the purpose of regulating oil and gas is to protect the environment of health, safety and welfare of Elbert County citizens and their property, none of this scheherazade dance of the seven veils accomplishes that.

Ground water property can only be protected through the doctrine of beneficial use.  That means you have to use it before you can defend your property right against someone else damaging it.  For example, we have 4 aquifers under our land with water in them.  We only use water from one of them at about 300 feet down.  There are 3 more aquifers underneath us that contain much more water, all of it, theoretically, belonging to us too.

We could even get the Colorado State Engineer to issue a Determination of Water Rights that would say how much water those aquifers theoretically contain.  Of course an open question on water determinations is whether future recovery methods will increase water reserve estimates, as they have all other mineral deposits in the ground, and should one get locked into a state allocation based on recovery methods predicated on old technology?

Anyway, with a state-granted water right determination in hand, we could actually sell an interest in those theoretical properties if someone wanted to buy it.  But unless we were to drill a well into those deeper aquifers and actually use that water, the ownership of that water is entirely theoretical and without a means to defend in court.

If someone were to extract water from a neighboring property out of one of those aquifers, and that extraction were to damage our water property interest in that same aquifer, unless we were also using water from that aquifer, we would have no way to defend our water property.  More importantly, unless we were also using water from that aquifer, we would have no way of knowing that we had been damaged.

So, that’s the doctrine of beneficial use.  You have to use it before you can defend it.

“Beneficial use” doctrine encourages the economic use of water.  It assumes that when the water comes out of the ground, it will serve our society under the guiding hand of one user or another.  Either way, the water is still good for use.  This doctrine, however, is inadequate to protect water quality while it remains untapped in the ground and subject to risk of contamination.

Whether the regulatory vehicle for delivering the above environmental protection law turns out to be zoning or an MOU contract, remedial efforts for ground water contamination will only potentially commence after evidence of damage is presented.  Only existing beneficial users of water will be able to show evidence of damage.  Therefore, only existing beneficial users of water will have enforcement protection under this regulatory scheme.

Every foreseeable oil and gas well in this region will penetrate all existing water aquifers.  Fracturing of those wells will occur deep in the ground, far removed from water supplies.  There’s no foreseeable risk of water contamination from that process.  Whatever risks exist to water, they exist from the vertical cased section of each well at depths in the vicinity of the water aquifers.

Even though all aquifers will be penetrated by each oil well, only the aquifers that currently have water wells into them will be tested for contamination.  And only a positive test for water contamination can enliven a remedial process, or some sort of compensation back to the water-owning injured party.

How much water remains in the ground in untapped aquifers is a question for the Colorado State Engineer.  I’m sure it’s not an easy question to answer, however, my gut tells me it’s a lot.  In our case, we have much larger theoretical reserves in our deep aquifers that have never been tapped than we have in the aquifer we drink out of.  Since only large agencies such as towns and subdivisions with central water systems can afford to drill into those deep aquifers, and since most of Elbert County is not populated with towns and subdivisions, it is fair to say that our water aquifer profile of usage is probably typical.

So it’s reasonable to conclude that the majority of water in the ground is not currently tapped.  Under the proposed regulations, this majority of water in the ground will never be tested for contamination.  We will never know if that water quality has been negatively impacted until some time in the future when the economics of recovering deeper water have changed, or when a real need arises to recover that deeper water.

Planners and regulators are putting window dressing on this problem with a water testing protocol that only looks at existing beneficial users – existing water wells in the vicinity of a vertical oil and gas well bore.

There’s a disconnect here.  The proposed regulatory schemes have no reality feedback mechanism to inform us about whether or not they succeed in protecting the majority of our water in untested aquifers.  Best Management Practices [BMP] for drilling must be accepted on faith alone.

You see this sort of thing a lot in government – untested outcomes – and it is one of the reasons government is always the last place you look for a real solution.

It doesn’t take an expert to recognize the disconnect, identify the problem, and understand that our regulatory scheme does not solve it.  One planner described to me last night how they do the best they can with limited information.  Well, that’s nice as far as it goes.  But doing the best you can, while acknowledging that you have inadequate information to assure success, seems to me a good argument for going back to the drawing board to come up with a better plan that addresses the nature of the real problem.

If the nature of solving this energy exploration problem, with scientifically demonstrable measures necessary to monitor successful performance in place, means that the process becomes more expensive, then that is the nature of the problem to solve.

Solving a different problem, i.e. testing for negative impacts in a small minority of places – where the testing is least expensive – as a method to prove out the general viability of the process at large, seems to be wishful thinking in the extreme.  Contamination problems, if they come to exist, will not direct themselves to the most convenient test sites.

This is willful blindness.

I’m sure a testing protocol could be devised to adequately monitor drilling and production integrity through all of the impacted aquifers in the region of each well bore.  To the Oil and Gas Committee, I say go back to the drawing board and solve the real problem.  Don’t hand us a mess of government legalese to paper over a premature solution.

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