If any of the growing number of producers delay coal bed methanegas drilling programs in the Powder River Basin, it won’t bebecause production has dried up. Most likely, it will be delayedwhile the Wyoming Department of Environmental Quality wrangles withrequested water pollution permits required for the projects, anddebates between business and environmentalists over jobs and cleanwater.

Denver’s Barrett Resources Inc., which has set up a substantialdrilling program in the prolific Powder River Basin, said last weekit is facing long delays in ramping up its coal bed methane gasprogram because the Wyoming DEQ may decide to hold public hearingsabout the water discharges. Up to now, the water discharge permitsrequired for the coal bed methane projects have sailed throughregulatory processes with few problems.

During a conference call with analysts last week, Barrett CEOPeter Dea said he was unsure whether the company’s plans to drillbetween 800 and 1,000 wells in the basin next year would beaffected by proposed public hearings. Drilling slated to begin inthe fourth quarter is on schedule, but year 2001 plans may beaffected.

“I do think it’s likely we’ll start slowly next year drilling,”COO Joe Jaggers said, but he added that it was too soon to know howexpected public hearings would affect the overall drilling program.

Wyoming DEQ’s Leah Krafft said that the state has not yetscheduled public hearings about water discharges from Barrett’s orany other company’s proposed drilling programs, but she admittedthis was the direction DEQ was headed.

“There have been a lot of permits that have been objected to,”she said, mostly related to the concern that high sodiumconcentrations in discharged water from coal bed methane productionwould lower crop production in the agricultural state. The DEQ isdirected to hold public hearings by the state’s independentEnvironmental Quality Council, and Krafft said she expected thatwould happen. The EQC, appointed by the governor, oversees DEQactions.

This year, several state legislative proposals have called formore stringent regulations on coal bed methane drilling, and moreenvironmental groups have publicly challenged the regulation of thestate’s water quality.

The 1972 federal Clean Water Act requires that pollutantdischarges from a point source into surface waters be regulated.Depending on the process, companies are issued National PollutantDischarge Elimination System permits, and in Wyoming, the DEQregulates the discharges from produced water from coal bed methanewells under a general NPDES permit. A general permit is anadministrative tool that may be used to issue many permits for onecompany’s operations.

Typically, a company does not have to develop a specialtreatment system for a general permit. However, in Wyoming,environmental groups say that the coal bed methane drilling isdestroying the state’s water. They want the state to crack down onthe NPDES permitting, and begin scrutinizing processes morethoroughly.

Wyoming Gov. Jim Geringer has long supported the oil and gasindustry in the state, and in August, he accepted a petition withnearly 4,000 signatures that also supported coal bed methanedevelopment.

The Petroleum Association of Wyoming and the Wyoming IndependentProducers Association distributed the petition to measure supportfor coal bed methane projects-mostly in response to what they saidwere “unnecessary demands to impose a moratorium,” and todemonstrate support for the “positive economic and communitybenefits” because of the projects.

“With the recent announcement of reserves equaling 25 Tcf,Wyoming’s Powder River Basin is secure in its position as aworld-class resource for energy production,” said Bob Ugland,director of the Minerals, Energy and Transportation division of theWyoming Business Council. “Wyoming will receive substantial incomefrom the production and sale of coal bed methane, which could bringthe state $7.5 billion over a 35-year period.”

Wyoming has 130 coal bed methane drilling rigs, and on average,87 are actively working at any one time. The 87 working rigssupport 348 direct jobs and 957 indirect jobs, paying well aboveWyoming’s average salary, according to the governor’s office.

Carolyn Davis, Houston

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