CHAPTER 7 FEDERAL AND WESTERN STATES ENVIRONMENTAL REGULATION OF COALBED GAS DEVELOPMENT
| Jurisdiction | United States |
(Apr 1992)
FEDERAL AND WESTERN STATES ENVIRONMENTAL REGULATION OF COALBED GAS DEVELOPMENT
Davis, Graham & Stubbs
Santa Fe, New Mexico
Jeffrey B. Groy
Davis, Graham & Stubbs
Denver, Colorado
Matt McEneny
Meridian Oil, Inc.
Farmington, New Mexico
TABLE OF CONTENTS
Page
I. INTRODUCTION
II. FEDERAL ENVIRONMENTAL REGULATION
A. Background
B. Summary of Coalbed Gas Waste Streams
1. Drilling Operations
2. Completions
3. Field Production Operations
4. Natural Gas Plants
5. Naturally Occurring Radioactive Materials
C. Federal Environmental Statutes
1. Clean Air Act
2. Comprehensive Environmental Response, Compensation, and Liability Act
3. Emergency Planning and Community Right-to-Know Act
4. Resource Conservation and Recovery Act
5. Clean Water Act
6. Safe Drinking Water Act
7. Toxic Substances Control Act
8. Federal Insecticide, Fungicide and Rodenticide Act
9. Endangered Species Act
10. Wilderness Act
11. Wild and Scenic Rivers Act
12. Noise Control Act
13. Federal Land Policy and Management Act
14. National Environmental Policy Act
15. Oil Pollution Act
16. Archeological Statutes
III. ENVIRONMENTAL REGULATION IN THE WESTERN STATES
A. Generally
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B. Colorado
1. Background
2. Water Disposal
3. Air Emissions
C. Montana
1. Background
2. Water Disposal
3. Air Emissions
D. New Mexico
1. Background
2. Water Disposal
3. Air Emissions
E. Utah
1. Background
2. Water Disposal
3. Air Emissions
F. Wyoming
1. Background
2. Water Disposal
3. Air Emissions
IV. CONCLUSION
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I. INTRODUCTION 1
Coalbed gas became recognized as an enormous energy resource during the 1980s. It has been estimated that as much as 850 trillion cubic feet of coalbed gas is trapped in the coal basins of the United States, exceeding by a factor of four the estimates of other forms of natural gas.2 The San Juan Basin of northwestern New Mexico and southwestern Colorado is one of two large-scale commercial producers of coalbed gas in the United States.3 Because of increased development of coalbed gas reserves in the previous decade, attention has recently focused on the environmental impact of coalbed gas exploration and production activities.
Numerous federal and state statutes and regulations may apply to coalbed gas operations depending on the nature and quality of the contaminants or emissions at issue and the environmental media involved (e.g., groundwater, land, surface water, air). Hazardous chemicals, substances and wastes are subject to a myriad of federal and/or state emission limitations, health and safety standards, notice and reporting requirements, as well as investigation and cleanup obligations.4 This paper will provide an overview of federal environmental statutes and regulations potentially applicable to coalbed gas development activities, with the primary focus on the substantive regulations as opposed to liability.5 In addition, the paper will summarize the environmental regulatory schemes addressing discharges to
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water and air currently in effect in Colorado, Montana, New Mexico, Utah and Wyoming.
II. FEDERAL ENVIRONMENTAL REGULATION
A. Background.
Historically, environmental regulation of the oil and gas industry was primarily the states' responsibility. State oil and gas conservation commissions regulated (and still regulate) oil and gas operations, including matters pertaining to the disposal of exploration and production wastes, well plugging and injection well disposal.6
Coalbed gas development and production are not specifically regulated by the federal government. Federal regulatory requirements generally applicable to the oil and gas industry, however, apply to coalbed gas-related activities. In recent years, Congress has enacted and amended a number of federal environmental statutes that impose a complex regulatory scheme, with attendant liability, on the owners and operators of oil and gas operations. Many of these statutes impose strict liability on owners and operators, and several of these statutes also impose liability on the current owners and operators of the oil and gas properties for the activities of prior owners and operators.7
B. Summary of Coalbed Gas Waste Streams.
Natural gas is one of the cleanest sources of energy, both in terms of emissions when used as a fuel and in terms of waste generated during exploration and production activities. The environmentally relevant materials produced in the normal course of gas production, transmission and distribution are significantly less harmful, in quantity and quality, than those materials generated during coal production or oil production, refining and use. Nevertheless, wastes are generated in all phases of coalbed gas operations, including drilling operations, completions, field production operations and natural gas plants.
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1. Drilling Operations.
Drilling operations mainly produce wastes from drilling rigs and reserve pits. Wastes generated from drilling rigs are generally associated with mechanical equipment.8 The types of wastes produced include hydraulic fluids, used lubrication oil and filters, rigwash fluids (used to wash down the rig floor), fuel spills, mud additive spills and drill formation cuttings.9
During the drilling of a well, fluids are used to cool the drilling bits, maintain the necessary hydrostatic pressure and move drill cuttings to the surface. Reserve pits are used to mix and collect drilling mud, which contains various additives that control the physical and chemical properties (e.g., density and viscosity) of the mud. The types of wastes produced include residual drilling fluids and solids, cement returns, oil and formation cuttings.10
2. Completions.
Newly drilled wells must be completed after drilling. Completion of a well usually involves perforating the well, installing downhole equipment and fracturing or acidizing the well to enhance production capacity. The types of wastes produced include hydraulic fluids, used lubrication oil and filters and spent workover fluids, which include weighing agents, surfactants, muds, produced water, acids, inhibitors, gels and solvents.11
3. Field Production Operations.
The primary functions of the field production process are to separate the well fluids, which usually consist of a mixture of liquid hydrocarbons, gas, water and solids, recover the gas and liquid constituents and remove the nonmerchantable
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wastes.12 The production operations consist of a number of processes although few wastes are generated at gas wells.13
Separators segregate produced liquids from gases and produced water from liquid hydrocarbons. The type of waste produced is referred to as "bottoms," which is the residues (e.g., sand and scale) that settle to the bottom.14
Compressors, which are necessary to operate the production facilities, are driven by electric motors or internal combustion engines. The types of wastes produced include engine cooling water, used lubrication oil and filters and hydraulic oil.15 In addition, the engines discharge pollutants into the air.
Produced water may be temporarily stored in settling tanks or waste pits (to separate the sand and solids) or disposed of in evaporative pits. The types of wastes produced include tank bottoms, sand and solids, hydrogen sulfide, concentrated brine and scale.16
Scrubbers may be used to separate fluids from gas.17 Recovered fluids may include condensate, oil and/or produced water.18
Injection wells that reinject produced water as a disposal mechanism need a pump, which is either an electric motor or an internal combustion engine. The types of wastes produced include used lubrication oil and filters.
4. Natural Gas Plants.
Natural gas plants provide centralized dehydration, compression and sweetening facilities for processing the natural gas and extracting natural gas liquids, such as butane, ethane
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and propane.19 There are typically five extraction and treating processes and each process generates various types of wastes:
a-b. Inlet Separation and Compression.
During these processes, natural gas from the field is gathered, produced water and liquid hydrocarbons are separated and the gas is compressed to sufficient pressure to allow the plant to operate. The types of wastes produced include produced water, pigging materials, inlet filter media, corrosion treatment fluids, pipe scale, rust, engine cooling water and used lubrication oil and filters.20
c. Dehydration.
Dehydration is the process of extracting water vapor from the natural gas to make the gas marketable. Dehydration of coalbed gas is the same as glycol-based systems used for conventional gas wells.21 The types of wastes produced include glycol-based fluids, glycol filters, condensed water, solid desiccants and treating chemicals.22
d. Sweetening.
The sweetening process can be done at the plant when field facilities are not available. The sweetening units at the plant reduce the content of hydrogen sulfide, carbon dioxide and other impurities. The types of wastes produced include spent iron sponge, spent glycol, spent amine, spent caustic and fiber media.
e. Natural Gas Liquids ("NGL") Recovery.
NGL recovery is the process whereby heavier hydrocarbons, such as butane and propane, are extracted. The types of wastes produced include used lubrication oil and filters, spent absorption oil, waste water, cooling tower water and spent blowdown water.23
5. Naturally Occurring Radioactive Materials.
A recent concern for oil and gas operations, including coalbed gas facilities, is naturally occurring radioactive
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materials ("NORM"), such as uranium, thorium and radium. NORM, which is found in geologic formations where oil, gas and other...
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