|
BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
|
||
|
IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
) ) ) ) |
CAUSE NO. 112
ORDER NO. 112-151 |
This cause came on for hearing before the Colorado Oil and Gas Conservation Commission (“COGCC”) on December 3, 1998 at 8:30 a.m. in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law. The matter comes on the Commission’s own motion pursuant to Rule 502.a. to consider action on a comprehensive staff monitoring, mapping and modeling proposal (the “3M Proposal”) in La Plata County to provide the Commission with necessary tools to promote Fruitland coalbed methane development, prevent waste of coalbed methane resources, establish appropriate “spacing” to economically and efficiently recover Fruitland coalbed methane resources while preventing the drilling of unnecessary wells, protect public health, safety and welfare, and prevent and mitigate unnecessary significant adverse environmental impacts taking into account cost effectiveness and technical feasibility as follows:
FINDINGS
The Commission finds as follows:
Notice and Jurisdiction
1. Operators actively conducting oil and gas operations in the Ignacio-Blanco Field are interested parties in the subject matter of the above-referenced hearing.
2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.
3. The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.
Fruitland Coalbed Methane History
4. On June 15, 1988, the Commission issued Order No. 112‑60 which established 320‑acre drilling and spacing units for the production of gas and associated hydrocarbons from the Fruitland Coal seams, underlying certain lands in the Ignacio‑Blanco Field, with the units to consist of a governmental half section and the permitted well to be located in the NW¼ and the SE¼ of each section, no closer than 990 feet from the boundaries of the quarter section, nor closer than 130 feet to any interior quarter section line. Order No. 112-61 was subsequently adopted amending Order No. 112-60 to establish additional field rules for the Fruitland Coal seams.
5. The Commission has entered approximately twenty three (23) orders allowing additional wells to be drilled or recompleted for production from the Fruitland Coal seams on certain 320-acre drilling and spacing units.
6. Increased drilling and production activity and citizen and local government concerns have caused the Commission to seek additional data to evaluate and to monitor potential that drilling operations to develop the Fruitland coal seams may have on public health, safety, and welfare and on the environment.
December Hearing Data and Proceedings
7. On October 28, 1998, the Director provided the Commission with a comprehensive staff monitoring, mapping and modeling proposal (the “3M Proposal”) in La Plata County.
8. At the December 3, 1998 hearing, the Commission heard the following testimony and evidence:
a. Dick Baughman of the Southern Ute Indian Tribe (“SUIT”) presented information regarding the Tribe’s continuing investigative and monitoring efforts on the reservation concerning the Fruitland Coal seams.
b. COGCC staff presented the Commissioners with the rationale and justification for the 3M Proposal along with the details outlining the modeling, monitoring and mapping project. Staff also presented the cost and the source of funding for the proposal.
c. Warren Holland, a representative attending on behalf of La Plata County and the La Plata County Board of County Commissioners discussed his view regarding the 3M Proposal and expressed the County's general support for the proposal.
d. A representative for J. M. Huber and EnerVest provided written comments and expressed their support for the proposal.
e. Representatives from Amoco Production Company, Hallwood and Burlington Resources provided comments and expressed support for the proposal.
9. After deliberation, the Commission found it appropriate to adopt the 3M Proposal, supporting the Budget Supplemental Request, the Budget Amendment for FY 99-00 and ongoing future FY budget requests.
10. The Commission found it appropriate for COGCC staff to regularly report on the status of this Order.
11. Based on the information and recommendations presented at the time of hearing, the Commission unanimously agreed to take appropriate action to adopt the comprehensive monitoring, mapping and modeling proposal (the "3M Proposal") in La Plata County, granting COGCC staff the authority to take into account all relevant data to adjust the parameters of the proposal as appropriate.
ORDER
NOW, THEREFORE, IT IS ORDERED that the Commission shall adopt the comprehensive staff monitoring, mapping and modeling proposal (the “3M Proposal”) in La Plata County as follows:
Install and maintain several clusters of pressure monitoring wells completed separately in individual coalbeds within the Fruitland Formation. The well cluster shall be installed in La Plata County along an approximately twenty-eight (28) mile section of the Fruitland Formation outcrop from the Southern Ute Indian Tribe (“SUIT”) Reservation exterior boundary to Beaver Creek near the Archuleta County line. Monitoring well clusters shall be proposed for installation near: the Animas River outcrop cut at Carbon Junction; the Florida River outcrop cut; the South Fork of Texas Creek outcrop cut; the Pine River outcrop cut; the Beaver Creek outcrop cut; and other locations identified by the Director and the Commission. Monitoring well clusters shall be installed subject to long term surface use agreements.
Complete a geologic mapping project to examine the above-referenced section of Fruitland Formation outcrop as well as the geologic data from wells within the adjacent few miles south of that section of Fruitland Formation outcrop to provide necessary geologic input for the integrated petroleum reservoir/hydrologic computer models referenced below.
Build and maintain integrated petroleum reservoir/hydrologic ground water computer models covering several large areas of the Fruitland Formation within La Plata County. It is expected that each large area subject to modeling shall include one or more of the monitoring well cluster locations referenced above.
After complying with appropriate notice and hearing requirements, issue a Commission order requiring operators of all La Plata County Fruitland coalbed methane wells without 1998 measured shut-in bottom hole pressures to measure the shut-in bottom hole pressures of such wells and report the pressure measurements for all Fruitland wells to the Director prior to December 1, 1999. Acceptable methods of measurement shall include a dead-weight-calibrated surface pressure measurement and shooting a fluid level following a 48-hour shut-in period as well as other similar or more precise methods of measurement. Reporting under this proposal would be subject to the terms of existing agreements with Bureau of Land Management (“BLM”) and SUIT as well as the Commission’s statutory jurisdictional authority. No order shall be entered without either conducting a hearing or securing the operator's consent.
Form a technical peer review team selected by the Director and the Commission to review and advise the Director and the Commission on the Fruitland Formation monitoring, mapping and computer modeling processes. The technical peer review team shall be comprised of individuals with demonstrated technical expertise and experience in studying the Fruitland Formation in La Plata County. The individuals would be expected to come from employers such as SUIT, La Plata County Government, BLM, other federal and state agencies, oil and gas companies operating in La Plata County, as well as professional geologic, hydrologic, and petroleum reservoir engineering consulting companies. However, such individuals shall serve as technical peer reviewers, not necessarily as representatives of their employers. Several of the peer review team individuals shall be expected to be residents of La Plata County, and most of the technical peer review team meetings shall be expected to be held in La Plata County.
Make appropriate use of the monitoring wells, geologic mapping, computer modeling and other related projects that are in progress or have been completed to date at the Pine River and elsewhere along the Fruitland Formation outcrop.
Request 100% funding for these proposals from the Severance Tax State Share Operational Account through an FY 98-99 supplemental budget request, an FY 99-00 budget request amendment, and ongoing future FY budget requests as approved by the Commission.
Coordinate these proposed Fruitland Formation monitoring, mapping and computer modeling efforts with any similar efforts that may be conducted by SUIT over the adjacent approximately twenty-two (22) mile section of Fruitland coal outcrop to the southwest from the SUIT Reservation exterior boundary to the Colorado -New Mexico state boundary.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
ENTERED this day of December, 1998, as of December 3, 1998.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
December 21, 1998