A Colorado state court judge has ruled against the state engineer’s office for the first time, saying that coalbed methane (CBM) developers who “divert” water as part of the natural gas production process are required to get a water permit from the engineer’s office in the same way that other water users do.

The July 2 decision by Colorado Sixth District Court Judge Gregory C. Lyman, a water judge, broke with the precedent that had exempted oil and gas producers from rules governing other ground water users who must get permits from the state engineer’s office. That agency, and co-defendant BP America Production, argued that it does not have jurisdiction because all oil and gas matters come under the state Oil and Gas Conservation Commission, which is authorized to permit and regulate oil and gas wells.

However, the judge cited another law, the Ground Water Act, which regulates activities involving water that is in or tributary to natural surface streams. All ground water is considered tributary to streams. Lyman relied on the absence of an exemption for oil and gas wells in the Ground Water Act to determine that “dewatering of geologic formations by removing tributary ground water to facilitate or permit mining of minerals requires a water well permit.”

He ruled in favor of a summary judgment requested by the plaintiffs, farmers Jim and Terry Fitzgerald of La Plata County and Bill and Beth Vance of Archuleta County. Their attorney, Sarah A. Klahn with White & Jankowski, Denver, said their view is that the ruling could be applied across the state, not just in the Sixth District because the state engineer’s authority is statewide.

A water well permit costs $200, but the issue is whether there is water available for appropriation or whether the rights have already been parceled out to others. In the latter case, the new applicant would have to submit a water augmentation plan showing how it would replace depletions. BP has not said whether it will appeal the decision.

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