Order No. 1R-10 (was 1-10)

IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND IN PARTICULAR WITH REFERENCE TO RULE #326

Cause No. 1R, 1 Order No. 1R-10 (was 1-10)

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on February 15, 1972 at 2 p. m., in Room 132, State Services Building, Denver, Colorado, after giving Notice of Hearing as required by Law, on the Commission's own motion, for the purpose of determining rules and regulations governing the construction, maintenance, and operation of retaining pits in an area including all of Adams, Arapahoe, and Elbert Counties, and part of Weld County, Colorado.

FINDINGS

The Commission found as follows:

1. That due notice of the time, place, and purpose of the hearing has been given in all respects as required by law.

2. That 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.

3. That the area includes, among, other lands, the Lost Creek Drainage Basin as well as most of the Kiowa-Bijou Creek Basin, and is described as follows:

Adams County, Colorado

All Lands

Arapahoe County, Colorado

All Lands

Elbert County, Colorado

All Lands

Weld County, Colorado

T. 1N thru 4N (incl. ) R 61W thru 68W (incl.)

All Sections

T. 5N R. 61W thru 67W (incl.)

All Sections

4. That the Pierre Shale formation is considered the bedrock formation underlying most of the above described area. It is exposed in the extreme eastern portion of the area. Overlying the Pierre Shale are four principal formations, each of which outcrop in the area under consideration. The oldest of these formations, overlying the Pierre Shale, is time Fox Hills formations It consists essentially of sandstone beds. Although it outcrops in northern and eastern portions of the area, it dips to depths of over 1500 feet in other parts of the area. The Laramie formation overlies the Fox Hills and consists of clays, shales, silty sands, coal seams, and thick sandstone beds near the base of the forma tion. Overlying the Laramie are the Denver and Arapahoe formations which are composed of clays, shales, and several notable sandstone beds. The alluvial deposits of Quaternary age overlay above formations and are mainly found as stream-channel, deposits along the South Platte River, Lost Creek, Kiowa, and Bijou Creeks, and other tributaries. Many of the clay and shale beds in the formations described and also the coal seams in the Laramie, are of suffic ient thickness to be reasonably considered impervious to seepage from pits.

5. That each of the four formations described, as well as the alluvial deposits overlying the Pierre Shale in places, contain significant aquifers. The Fox Hills is of particular importance as it contains an aquifer continuous from its eastern outcrop throughout the area. The aquifers in the alluvial deposits often yield moderate to large quantities of water to many domestic, stock irrigation, public supply, and industrial wells. The aquifers in the fo rmations below the alluvial deposits yield small to moderate quantities of water to wells in the area.

6. That while the formation below the alluvial deposits may contain clay, shale beds, or coal seams which form impermeable barriers of sufficient thickness to prevent seepage of oil field waters from entering the deeper underlying aquifers, special precautions must be taken to prevent seepage from a retaining pit, located on the outcrop of formations or on the alluvium, from reaching aquifers contained in such formations or alluvium.

7. That the aquifers containing a very substantial quantity of water in storage. The water in the aquifer of the alluvial deposits generally moves in the direction following the stream course while the water in the deeper aquifers generally moves in a northwesterly to northeasterly direction, depending upon the location within the area. The water in these aquifers is generally of good quality and because of its great need for domestic and public supply, should be protected.

8. That most of the produced water from oil field operations in the area is from the "J" Sand, with lesser amounts from the "D" Sand and Sussex formation. The total dissolved solids of the produced water -range from approximately 1500 to 24, 000 parts per millions The upper limits being that water from the Sussex formation.

9. That accepted standards for water quality have been established by the Water Pollution Control Commission for domestic use as less than 500 parts per million of total dissolved solids, and less than 3000 parts per million for livestock and irrigation purposes. These limits are guidelines of acceptable water use depending on varying circumstances and tolerances established b people, livestock, and types of crops.

10, That as indicated in the testimony of the previous hearing on the Northern High Plains Ground Water Basin, a serious oil reserve deficiency situation exists in the United States today and will become more serious in the future. An average of less than 40% of the oil in a reservoir is recovered by present known methods and an effort should be made to keep small fields producing so they will be available for treatment by more sophisticated recovery met hods being developed.

11, That since oil field retaining pits are attractive to and used by ducks, geese, and other wildlife in the area, such pits should be kept free of even small accumulations of oil The Oil and Gas Conservation Commission has the responsibility and authority to prevent destruction of wildlife from oil field sources.

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ORDER

NOW, THEREFORE, IT IS ORDERED that the following shall apply to the area as described in Finding 3 herein.

1. That the Director be authorized and directed to approve on behalf of the Commission:

a. All pits designed and located in accordance with and fully complying with and fully complying with the Commission's regulations (Rules 325 and 326 .

b. All pits meeting the standard of (a) above except where the pit is not lined, and applicant supplies substantial evidence to the Director that the quality of the produced water is substantially the equivalent of the underlying aquifer.

c. All pits located in or over a stratum of such impervious nature and of such thickness that it would be reasonable to expect that seepage from such pits could not reach any underlying aquifer and also where it would be reasonable, to expect that any horizontal flow of the produced waters through formations above such. impervious stratum could not reach any nearby wells or other waters of the State

2. The applicant, may, in the event a premature abandonment of producing oil or gas wells will result in not being able to comply with Paragraph 1 herein above, submit to the Director a complete economic statement of the situation, including estimates of lining the pit or other methods of reasonably protecting the pit from seepage and oil accumulations, consideration being given to the volume of water being handled, and estimates as to the production and reserves that may be lost in primary and secondary recovery methods. The Director shall then submit such application to the Commission for its final action.

3. That applicant may, in the event he believes that produced water from his well or wells is of a quality usable for stock or irrigation purposes and that a strict enforcement of Paragraph 1 herein above will prevent such use, submit such test result and materials substantiating such need and a proposed plan showing how such use can be accomplished.

4. Not withstanding Paragraphs 1. 2. and 3 hereinabove, where it appears to the Director that produced water from a field, fields, or combination of wells should be disposed of underground, he shall notify the Commission of such recommendation and notify the operators in the affected areas. The operators shall have a maximum of one hundred twenty (120) days to continue the use of pits during which time they shall be required to submit a plan for undergro und disposal of the produced water.

5. In the case of any other application not requiring action under the foregoing paragraphs, the Director shall submit such application to the Commission with his recommendation for final action - 3 -6. Any applicant desiring a hearing before the Commission, either before the Director makes any recommendation to the Commission., or after such recommendation., shall be entitled to such hearing upon request. If the hearing is desired because of the Director's recommendation, such request shall be made within thirty (30) days of notice of the Director's recommendation.

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 Order

ORDERED this 14th day of March 1972.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Frank J. Piro, Secretary