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Colorado's CBM Operators Given Reprieve on Groundwater Rules

June 8, 2009
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Colorado's coalbed methane (CBM) producers will have another year to comply with new state groundwater regulations under legislation signed by Gov. Bill Ritter last week.

Without the legislation, CBM production may have come to a halt because of a Colorado Supreme Court ruling in April, Ritter noted. Under the high court's ruling, all of the state's CBM wells, now estimated at around 4,600, would have had 60 days to obtain water well permits from the state Division of Water Resources (DWR), which doesn't have the staff to process thousands of permits in a short period of time.

"We would have had to shut down wells while they applied for permit approval -- an outcome we all wanted to avoid," Ritter said.

The legislation followed a lengthy court battle that began when two ranching families in La Plata County, CO, asked a state water court to determine the legal obligations of the state's engineers and division engineers regarding well permits and augmentation plans when groundwater was diverted to produce CBM (Vance v. Wolfe, No. 07SA293).

The state's engineers and BP America Production Co. intervened in the action, arguing that the use of water in CBM operations was not a "beneficial use" and thus did not need to be regulated.

However, the water court held for the ranchers in a declaratory judgment, and the Colorado Supreme Court affirmed the ruling in April (see NGI, April 27).

House Bill 1303 was unanimously passed by the Colorado General Assembly. It holds the high court ruling at bay until March 31, 2010. The bill establishes a process to integrate into the regulatory scheme those CBM wells that remove tributary groundwater. Between 2010 and 2012 the DWR would approve annual substitute water supply plans for these wells. Beginning in 2013 only CBM wells with an approved augmentation plan or an approved substitute water supply plan would be allowed to remove tributary groundwater.

The bill's sponsors were State Sen. Jim Isgar and State Rep. Kathleen Curry. The plaintiffs and their legal representatives also cooperated in drafting the bill, officials said.

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