Fitting a Square Peg in a Round [Drill] Hole: The Evolving Legal Treatment of Coalbed Methane Produced Water in the Intermountain West

Abstract

Groundwater resources in the Intermountain West (Colorado, Montana, New Mexico, Utah, and Wyoming) continue to dwindle while populations expand. Oil and natural gas production in the region continues to increase, with a corresponding increase in production waste (mostly water). In the 1950s, each state set up an oil and gas conservation commission to regulate the disposal of the relatively small amounts of highly saline water produced during conventional oil and gas extraction. Beginning in the 1980s, however, energy producers began extracting methane trapped in coal seams that were too deep to mine conventionally. Today, this coalbed methane comprises nearly 10% of total domestic natural gas production. In order to extract coalbed methane, large quantities of water—often high-quality water—must be removed and disposed. That water does not fit into the regulatory scheme of byproduct waste to be governed solely by state oil and gas conservation commissions, nor is it extracted and used in the same manner as traditional groundwater resources subject to state groundwater laws. This paper examines Colorado’s recent shift from the byproduct waste model to a groundwater resource model and proposes specific legislative changes that would recognize coalbed methane produced water as a unique resource. Those changes would help slow the waste of high-quality groundwater resources without unduly burdening energy producers, and would encourage treatment and traditional uses of the water. Colorado’s approach may then serve as a template for other states in the region who are attempting to meet their water and energy needs while preserving groundwater resources for future generations.