BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

 

*   *   *

 

IN THE MATTER OF THE APPLICATION OF           )

PUBLIC SERVICE COMPANY OF COLORADO      )            CAUSE NO. 146

FOR AN ORDER AUTHORIZING THE CLOSURE   )

OF THE LEYDEN UNDERGROUND NATURAL       )            DOCKET NO. ______

GAS STORAGE FACILITY IN JEFFERSON               )

COUNTY, COLORADO                                                    )

 

                                                                                                                                                           

 

APPLICATION

                                                                                                                                                           

 

The Applicant, Public Service Company of Colorado (“Public Service”), respectfully petitions the Oil and Gas Conservation Commission of the State of Colorado for an order authorizing the closure of the Leyden Underground Natural Gas Storage Facility operated by Public Service in Jefferson County, Colorado.  In support of its application, Public Service states as follows:

1.                  Public Service is a Colorado corporation and is an operating public utility, as defined in C.R.S. § 40-1-103, engaged, inter alia, in the purchase, distribution, sale and transportation of natural gas in various areas in the State of Colorado.  Public Service provides natural gas service to over 1.1 million residential, commercial, and industrial customers in Colorado.  Public Service is a wholly-owned subsidiary of Xcel Energy Inc., which is a registered public utility holding company under the federal Public Utility Holding Company Act.

2.                  The address of Public Service is 1225 17th Street, Suite 900, Denver, Colorado 80202-5533.  The names, addresses and telephone numbers of Public Service’s representatives upon whom all notices, pleadings, correspondence, and other documents regarding this Application should be served are as follows:

William C. Uding, P.E.

Gas Storage Projects Director

Xcel Energy Services Inc.

555 15th Street, Suite 700

Denver, Colorado  80202-5533

Telephone:  (303) 571-7383

 

and


James D. Albright, Esq.

Assistant General Counsel

Xcel Energy Services Inc.

1225 17th Street, Suite 900

Denver, Colorado  80202-5533

Telephone: (303) 294-2753

 

3.                  By Order No. 146-1 issued September 30, 1960, the Commission approved Public Service’s application to establish a project for storage of natural gas in an underground reservoir situated in all or parts of Sections 21-22, 26-28, and 33-35 of Township 2 South, Range 70 West, Jefferson County, Colorado.  The project was established in the caverns of an abandoned coal mine known as the Leyden Coal Mine and became known as the Leyden Underground Natural Gas Storage Facility (the “Leyden Facility”).  Public Service has operated the Leyden Facility since 1960, injecting and withdrawing natural gas to support its natural gas distribution and delivery operations in the Front Range area of Colorado.

4.                  In the Spring of 2000, Public Service announced its decision to close the Leyden Facility due to the increasing incompatibility of its continued gas storage operations with the encroaching residential and commercial development of the surrounding area.  Public Service obtained authority from the Colorado Public Utilities Commission to abandon the Leyden Facility in January, 2001.  Injection of gas into storage ended on September 30, 2001, and Public Service has been withdrawing gas from the Leyden Facility since that time.

5.                  The Commission is vested with authority to regulate the public health, safety and welfare aspects, including protection of the environment, of the termination of operations and permanent closure of the Leyden Facility pursuant to Colorado Revised Statutes § 34‑60‑106(17) adopted in 2001 (the “Closure Statute”).  Prior to closure of the Leyden Facility, Public Service is required to obtain a certificate of closure from the Commission.  To obtain a certificate of closure, Public Service must demonstrate that its closure plan reasonably protects public health, safety and welfare, including protection of the environment.

6.                  Public Service has prepared and submits as Exhibit A to this Application its Closure Plan for the Leyden Facility.  The Closure Plan provides for the closure of the Leyden Facility as a gas storage facility following the withdrawal of recoverable storage gas from the caverns and the abandonment of certain wells and equipment.  As stated above, Public Service has been withdrawing gas from the Leyden Facility since the last injection occurred in 2001.  Upon issuance of a certificate of closure by the Commission, Public Service will begin to inject potable water through existing wells to flood the underground cavern, displacing storage gas and facilitating the withdrawal process. 

7.                  The water injected by Public Service will be supplied by the City of Arvada (“Arvada”) under an agreement entered into with Public Service dated January 27, 2003.  (A copy of the agreement is attached as Appendix F to the Closure Plan.)  The agreement contemplates injections beginning in 2003 and continuing through 2004-05, but delivery of volumes in excess of minimum amounts is subject to availability of water and competing demands for Arvada and its customers.  Upon completion of water injection operations, the Leyden Facility will be converted from natural gas storage to municipal water storage operations by Arvada.  All wells and related facilities that are useful to Arvada’s water storage operations will be conveyed by Public Service to Arvada.  All other wells and equipment will be plugged and abandoned or reclaimed by Public Service prior to the conversion.

8.                  The Closure Plan meets or exceeds the requirements of the Closure Statute in protecting the public health, safety and welfare, including the environment, relating to the closure of the Leyden Facility.  Section III of the Closure Plan provides for the recovery of residual natural gas reasonably recoverable from the underground caverns.  Section IV of the Closure Plan provides for the transfer of certain wells and well sites to Arvada for its use in ongoing water storage operations, while Section V provides for the abandonment of all other wells and reclamation of all other well sites in compliance with the Commission’s rules and regulations.  Section VI of the Closure Plan provides for the abandonment of the mine shafts that were originally sealed during the early 1960’s as part of the process to convert the abandoned coal mine to a gas storage facility.  Sections VII and VIII provide for the abandonment of wells used as observation wells during gas storage operations, and the abandonment of gas gathering pipelines and related above-ground facilities.  Finally, Sections IX and X of the Closure Plan provide for monitoring during and after closure of the Leyden Facility, including corrective actions if such monitoring indicates that the initial measures are insufficient.

9.                  Public Service submits as Exhibit B to this Application a Guarantee of Performance of its obligations relating to the closure of the Leyden Facility.  This Guarantee of Performance is tendered in accordance with C.R.S. § 34-60-106(13) to provide assurance that Public Service is financially capable of fulfilling its obligations imposed under the Closure Statute.  The Guarantee of Performance includes the most recent balance sheets and other financial statements reflecting the financial condition of Public Service.  The financial condition reflected in the Guarantee of Performance is more than sufficient to support Public Service’s obligations under the Closure Plan and any conditions the Commission may reasonably impose in connection with the closure.

10.              In addition to its Guarantee of Performance described in the preceding paragraph, Public Service has previously provided the Commission with a blanket plugging bond -- Bond No. 929222792, approved by the Commission on October 26, 2001 -- which covers the plugging and abandonment of wells to be plugged pursuant to the Closure Plan.  All other wells at the Leyden Facility will be conveyed to Arvada pursuant to Public Service’s Agreement with Arvada and will be converted to use as water injection and withdrawal wells.  Following completion of closure operations and conveyance of these wells to Arvada, the wells should be removed from continuing coverage under Public Service’s plugging bond.  Public Service has also provided a blanket bond -- Bond No. 400SF4078, approved by the Commission on July 31, 2001 -- to assure Public Service’s performance of obligations with respect to the Leyden Facility and other gas facilities operated by Public Service in Colorado.  These bonds remain available to the Commission to insure Public Service’s performance of these aspects of the Closure Plan.

11.              Attached as Exhibit C to this Application is a list of owners and other parties to whom Public Service intends to provide notice of this Application.  Public Service states to the best of its information and belief that the parties listed on Exhibit C represent all of the parties entitled to notice of this Application under the Closure Statute and Rule 503 of the Commission’s regulations.

12.              Attached as Exhibit D to this Application is the form of notice which Public Service has been served on all the persons identified on the above-referenced list.  In addition, Public Service is causing such notice to be published in the legal classified section of The Denver Post for three consecutive days following the filing of this Application.

WHEREFORE, Public Service respectfully requests that this matter be set for hearing by the Commission; that notice thereof be given as required by law; and that upon such hearing the Commission issue an order granting this Application and issuing a certificate of closure for the Leyden Facility as requested herein.  Public Service further requests that the Commission in its order grant such other provisions as the Commission may find to be necessary or desirable in the matter.

Dated this 3rd day of March, 2003.

Respectfully submitted,

 

 

 

By:                                                                 

James D. Albright, #18685

Assistant General Counsel

Xcel Energy Services Inc.

1225 17th Street, Suite 900

Denver, Colorado 80202-5533

Tel.:  (303) 294-2753

Fax:  (303) 294-2988

 

and

 

Gorsuch Kirgis LLP

G. Donohue Kane, #11346

1515 Arapahoe Street, Suite 1000

Denver, Colorado 80202

Tel.      (303) 376-5000

Fax:     (303) 376-5001

 

ATTORNEYS FOR PUBLIC SERVICE

COMPANY OF COLORADO


 

 

Verification

 

 

STATE OF COLORADO                         )

                                                                   )      ss.

CITY AND COUNTY OF DENVER       )

 

 

William C. Uding, of lawful age, being first duly sworn upon oath, deposes and says that he is Gas Storage Projects Director for Xcel Energy Services Inc., agent for Public Service Company of Colorado, that he has read the foregoing Application, including the Closure Plan attached as Exhibit A thereto, and that the matters therein contained are true to the best of his knowledge, information and belief.

 

                                                                            

William C. Uding

 

 

Subscribed and sworn to before me this 3rd day of March, 2003.

Witness my hand and official seal.

My commission expires: _______________________________.

 

                                                                            

Notary Public

 

( S E A L )

 

 

 

CLOSURE PLAN

 

FOR THE

 

LEYDEN UNDERGROUND

 

NATURAL GAS STORAGE FACILITY

 

 

 

 

 

 

 

 

Submitted by

 

Public Service Company of Colorado

 

To The

 

Colorado Oil and Gas Conservation Commission

 

March 3, 2003


 

 

 

Table of Contents

 

 

I.       Overview and Summary of Closure Plan

 

II.      Background and Description of the Leyden Facility

A.    Background

B.    The Leyden Facility – Geography, Geology and Operations

C.    The Decision to Close the Leyden Facility

D.    Gas Migration and Leakage of Storage Gas From the Leyden Facility

 

III.             Water Flooding of the Caverns and Removal of Storage Gas

 

IV.     Conversion of Certain Gas and Water Wells to Water Storage Operation

 

V.      Abandonment of Gas Injection/Withdrawal Wells

 

VI.     Abandonment of Shaft Seal Systems

 

VII.    Abandonment of Observation Wells

 

VIII.  Abandonment of Gathering Lines and Above Ground Facilities

 

IX.     Monitoring During Closure

 

X.      Post Closure Monitoring


LEYDEN UNDERGROUND.. 1

NATURAL GAS STORAGE FACILITY.. 1

Submitted by. 1

Public Service Company of Colorado.. 1

To The. 1

Colorado Oil and Gas Conservation Commission. 1

March 3, 2003. 1

Table of Contents. 2

I.     Overview and Summary of Closure Plan. 2

II.        Background and Description of the Leyden Facility. 2

I.   Overview and Summary of Closure Plan. 2

The Leyden Coal Mine operated for approximately 47 years from 1903 to 1950.  At the time of its conversion to natural gas storage operations in 1960, the Leyden Facility was located distant from any community with the exception of the tiny town of Leyden, which remains today.  The mine itself consisted of two horizontal coal seams, eight to ten feet thick, 700 to 1,100 feet below the surface.  The actual area of the cavern is approximately 1,300 acres, and the difference between this area and the leased area provides the Company with an approximate 500-foot buffer zone.  In 1990, Public Service renewed the initial leases for the facility for an additional 50 years.  Appendix A attached to this Closure Plan is a map of the Leyden Facility showing the perimeter of the mine and the extent of the Company’s leases. 4

IV.   Conversion of Certain Gas and Water Wells to Water Storage Operation. 11

Well #4, West Cavern. 11

Well #5, East Cavern. 11

Well #7, East Cavern. 12

An east cavern well, Well #7, was drilled and operated as a water production well.  It historically had been a marginal producer, having a poor connection to the cavern area.  This well was recently worked over to improve its capacity as a water injection well.  A 7-inch liner was installed in the well down through a previously open hole section below the cemented casing.  A 1.66-inch tubing string and down hole pressure gauge were also set during that workover.  Its use as a water injector will be evaluated at the time water is available for injection.  This well would then be transferred to the City for use in its water storage operations. 12

Well #8, West Cavern. 12

Well #8 is currently a gas withdrawal well on the south end of the west cavern.  This well will be used to recover gas that is displaced as water floods the caverns.  A 8⅝-inch liner is set through the cavern level in this well.  At the time water reaches the 13⅜-inch casing shoe of this well, 5011 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 8⅝-inch liner in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations. 12

Well #9, West Cavern. 12

Well #9 is currently a gas withdrawal well on the north end of the west cavern.  It is structurally the highest well in the facility.  This well will be used to recover gas that is displaced as water floods the caverns.  At the time water reaches the 7-inch casing shoe of this well, 5149 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 7-inch casing in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations. 12

Well #12, West Cavern. 12

Well #21, West Cavern. 13

Well #30 is a gas withdrawal well in the west cavern.  This well will be used to recover gas that is displaced as water floods the caverns.  At the time water reaches the 9⅝-inch casing shoe of this well, 5072 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 9⅝-inch casing in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations. 13

V.   Abandonment of Gas Injection/Withdrawal Wells. 13

VI.   Abandonment of Shaft Seal Systems. 13

VII.   Abandonment of Observation Wells. 14

Well #1. 14

Well #2. 15

Wells #10 & #11. 15

Well #13. 15

Well #17a and #17b. 15

Well #20. 15

Well #23. 16

Well #24. 16

Well #27. 16

Well #28. 16

Well #31. 16

Well #32. 17

Well #34. 17

This well was permitted through the State Engineers office as a water well.  It was drilled and completed in 1997.  Public Service plans to offer this well to the landowner who holds the water rights.  If the land owner does not want the well it will be plugged and abandoned according to the Sate Engineers rules and the lease agreement. 17

Well #35. 17

VIII.   Abandonment of Gathering Pipelines and Removal of Above Ground Facilities. 17

Surface Inspection. 17

Soil Gas Testing. 18

Observation Well Monitoring. 18

I.   Overview and Summary of Closure Plan

 

13.  The purpose of this document is to set forth Public Service Company of Colorado’s (“Public Service” or the “Company”) Closure Plan for the Leyden Underground Natural Gas Storage Facility (the “Leyden Facility”).  This Closure Plan focuses in detail on the steps that Public Service proposes to take in order to fully and permanently close the Leyden Facility as a natural gas storage facility in a manner that is orderly, efficient, and consistent with the public health, safety and welfare.  The closure process will involve:  (1) flooding the underground storage caverns with water to displace and remove the remaining recoverable storage gas; (2) plugging and abandoning certain gas injection/withdrawal wells that will no longer be required; (3) converting other gas injection/withdrawal wells for use in water storage operations and transferring those wells and the remaining water wells to the City of Arvada for its use in planned municipal water storage operations; (4) abandoning existing gas gathering lines and other above-ground facilities; (5) surface restoration as required by lease agreements, Commission regulations and other environmental regulations; (6) post-closure monitoring; and, finally, (7) cessation of post-closure monitoring and plugging and abandoning of monitoring wells.

14.   

15.  Although dependent largely on the availability of sufficient quantities of water for flooding the underground storage caverns, Public Service estimates that the closure process will take approximately two and one-half years from the date of commencement of water flooding, which currently is planned to occur in mid-2003.  Therefore, by the end of calendar year 2005, it is anticipated that the facility will be closed as a natural gas storage facility and the only remaining activities conducted by Public Service at the site will be post-closure monitoring and the subsequent abandonment of monitoring wells.

16.   

17.  In order to put into context the details of the Company’s proposed Closure Plan, the following section provides a background and description of the Leyden Facility.  The remaining sections of this Closure Plan discuss in greater detail the closure procedures summarized above.

 

II.   Background and Description of the Leyden Facility

 

A.        Background

 

The underground storage of natural gas is common, with over 400 underground gas storage facilities operating in the United States, nine of which are in Colorado.  Most of these facilities are in depleted gas or oil fields and some in salt mines or salt cavities.  The Leyden Facility, however, has the distinction of being the only converted abandoned coal mine in the United States used for natural gas storage and one of only two in the world.  The Leyden Facility was featured in a paper released by the United States Environmental Protection Agency in 1998 as a potential solution for the production-area storage of coal bed methane gas.[1]

 

The Leyden Facility was initially developed in 1958-1959 and was placed into operation by Public Service in 1960.  Since 1960, Public Service has operated the abandoned coal workings of the Leyden mine as an underground gas storage facility.  The Leyden project was pursued by Public Service because of its close proximity to Denver, the Company’s historic natural gas load center, the optimum injection and withdrawal capabilities of the abandoned mine caverns, and the reasonable costs to convert the Leyden Coal Mine into a natural gas storage reservoir.

 

In 1960, upon Public Service’s application in Cause No. 146, the Colorado Oil and Gas Conservation Commission (“Commission”) approved the Leyden Facility pursuant to its authority under C.R.S. § 34-64-104.  In accordance with the approved project, Public Service was authorized to store natural gas in the Lower Laramie formation, where the abandoned coal caverns were located.  In approving this request, the Commission found that there was substantial evidence that this natural gas storage project was in the public interest and welfare, that the storage reservoir was suitable and practicable, and that the formation or formations sought to be condemned were nonproductive of oil or gas in commercial quantities under either primary or secondary recovery methods.

18.   

 

B.  The Leyden Facility – Geography, Geology and Operations

 

The Leyden Facility consists of an underground gas storage field and the Leyden compressor station.  The underground gas storage field includes land and land rights, both owned and leased, wells, gathering lines, surface treating systems, shaft sealing systems, and a water treating and gathering system.  The Leyden Facility covers approximately 2,000 acres or 3.1 square miles.  It is located northwest of Arvada, Colorado, adjacent to Colorado Highways 93 and 72 and straddling West 82nd Avenue (Leyden Mine Road), about 14 miles from downtown Denver.  The property that makes up the Leyden Facility includes parts of sections 21, 22, 26, 27, 28, 33, 34 and 35-T2S-R70W, Jefferson County, Colorado.  Public Service owns two small tracts of the storage field area, 4.4 acres in section 27, where the water treatment system is located, and 30 acres of the buffer area in section 35.

 

The Leyden Coal Mine operated for approximately 47 years from 1903 to 1950.  At the time of its conversion to natural gas storage operations in 1960, the Leyden Facility was located distant from any community with the exception of the tiny town of Leyden, which remains today.  The mine itself consisted of two horizontal coal seams, eight to ten feet thick, 700 to 1,100 feet below the surface.  The actual area of the cavern is approximately 1,300 acres, and the difference between this area and the leased area provides the Company with an approximate 500-foot buffer zone.  In 1990, Public Service renewed the initial leases for the facility for an additional 50 years.  Appendix A attached to this Closure Plan is a map of the Leyden Facility showing the perimeter of the mine and the extent of the Company’s leases.

 

19.  Referring to Appendix A, the green shaded area of the map shows the extent of the natural gas storage leases, which includes some minor ownership of land purchased by the Company.  The rough black line just inside the green shading is the extent of the known coal mining activity underground.  About 6 million tons of coal were removed from the mine during its production, or less than 50 percent of the coal located in the mine, leaving a void of about 150 million cubic feet.  The lease property extends about 500 feet from the perimeter of the mine cavern in most areas, except for portion on the north side.

 

There are 14 gas injection/withdrawal wells and 20 observation and water wells on the Leyden property.  These wells were drilled under permits from the Commission and the State Engineer’s Office.  Gas injection and withdrawal wells are shown as small hollow centered blue dots inside the green boundary on Appendix A.  All gas injected or withdrawn from the storage facility moves through these wells.  The solid blue dot with the cross strokes are the observation wells.  Note that there are observation wells both on and off of the green-shaded leased property.  The observation wells directly over the mined area, which is inside the rough black line, are used to observe the various formations above the cavern level, and those outside of the mined area are used to monitor zones both above and below the un-mined coal seams in these areas.

 

The shafts that were constructed and used during the coal mining era to remove the coal are shown on the map in Appendix A as bold black squares with x’s in their center.  These shafts were sealed in the early 1960’s as a critical element of the storage seal, and have been remained sealed to the present day.  A photograph of a typical shaft seal site is contained in Appendix B to the Closure Plan.

 

20.  The gas gathering system is comprised of steel and plastic piping that is largely buried on the leased property and in public rights of way.  These lines vary in size from 24-inch to 4-inch diameter.

 

21.  The Leyden Station is located on a 6.7-acre tract of Company-owned property in Section 25, just east of the gas storage area on the north side of Leyden Road.  The map shows this area as the "Leyden Office".  The Leyden  Station is comprised of gas compression, dehydration, and metering equipment with offices, shops, warehouses and control facilities.  In order to accomplish the necessary gas injection and withdrawal process, approximately 17,000 horsepower in compression are installed in ten units at the Leyden Station.  Appendix C to the Closure Plan contains a photograph of the Leyden Station showing the location of the various buildings, filter separation and dehydration facilities.  The elevated spherical aluminum storage tank in the center of the photograph provides pressurized water for the entire needs of the facility.  It is planned that this station will be reconfigured for continued gas utility operations in conjunction with Public Service’s high pressure pipeline facilities in the area and is not a part of the Closure Plan.

 

22.  The Leyden Facility operates by injecting natural gas into the underground space left after coal mining.  These cavern spaces have almost entirely collapsed, leaving an underground “rubble pile” of rock that supports the overlying rock formations.  Due to the gradual nature of the collapse, there is no danger from subsidence at the surface over this facility.  The void created by the original coal removal process is still present in the rubble although not anywhere as spacious as the “rooms” in the coal mine.  Additionally, some of the sandstones within the Lower Laramie are porous and permeable enough to provide some storage capacity.  A west-to-east cross section of the geologic formations is shown in Appendix D to the Closure Plan.

 

In 1958, before Public Service began gas storage activities, the rubble pile voids and the sandstone pores were full of water.  These void spaces, where water can effectively be drained by gravity to a sump area or removed by pumping, are the primary areas within the storage reservoir where Public Service historically has stored natural gas.  Gas is also stored in sandstone pockets, or lenses, located above and on either side of the mine cavern.  Sandstone is porous and permeable and capable of holding natural gas.  The geologic formation of the storage facility where all this occurs is the Cretaceous Lower Laramie formation.  This overlies the Fox Hills sandstone and the Pierre Shale.  The Lower Laramie as found in the vicinity of Leyden is approximately 250 feet thick and is predominately shales, sandstones, and coals.  Coal found toward the base of the Lower Laramie was mined from two seams: the A, or upper, seam is what is now the east cavern, and the B, or lower, seam is what is now the west cavern.  The coal lies at a depth of roughly 700 to 1100 feet below the ground level.  Above the Lower Laramie is the Upper Laramie comprised mostly of clays, claystones and siltstones that extend nearly to the surface.  These rock types are very impermeable and are responsible for the Laramie-Foxhills aquifer being classified as non-tributary.  This same impermeable characteristic is what forms a very effective cap rock that prevents the vertical movement of gas to the surface.

 

The cap rock is a 400-foot thick layer composite of impervious clays, claystones, and siltstones separating the storage reservoir from the surface.  From core samples recovered during early well drilling, Public Service determined that the Upper Laramie formation is uniformly thick, and consistently made up of these non-porous, impermeable materials.  The Company also learned from observation wells, that the water levels in this formation do not materially change from year to year and, in addition, the water levels do not vary with pressure fluctuations.

 

23.  The sandstones of the Lower Laramie were full of water prior to the mining and gas storage activities.  Some of these sandstones continue to drain water into the storage area where it then runs by gravity down to the low end of the field by Well No. 12.  Additionally, the Fox Hills Sandstone, which is below the mined coal level, is at a higher pressure than the pressure of the storage reservoir.  Through a limited underground connection between the Fox Hills Sandstone and the storage reservoir, water flows to the path of least resistance into the storage reservoir and then down to the low end of the cavern.  Public Service routinely pumps this water out in order to maintain the void space available for gas storage, and to insure that the standing water in the bottom of the “cavern” area does not submerge the openings at the bottom of the gas withdrawal wells.

 

Public Service has a wastewater discharge permit  (Permit No. CO-0001279) issued by the Colorado Water Quality Control Division for wastewater discharges from the Leyden Facility into Leyden Creek.  The permitted outfalls are:  the discharge from Water Well No. 12; overflow from the livestock-watering pond that receives water from Well No. 21; discharge from the Leyden Knockout Tank; and discharge from the Retention Pond, including discharges into livestock watering pond.

 

 

C.  The Decision to Close the Leyden Facility

 

On April 14, 2000, after 40 years of reliable operation, Public Service filed an application with the Colorado Public Utilities Commission -- the agency delegated with the authority to regulate Public Service’s services, rates and facilities -- for authorization to permanently remove the Leyden Facility from public utility service.  Public Service’s decision to abandon the Leyden Facility was based on the conclusion that an underground gas storage field of this nature is no longer compatible with the land uses and development in the surrounding area and that, as a result, the ultimate cost to Public Service and its customers to continue operating the facility would exceed the costs necessary to replace it.  Over the course of the last ten years, residential, commercial and industrial development adjacent to Leyden has grown in a way never contemplated when the Leyden Facility was conceived.  When the Leyden Facility was placed into storage service in 1960, it was remotely located outside of the urban metropolis, surrounded by miles of rolling fields and a small, leftover coal mining town.  Today the limits of the City of Arvada are rapidly approaching the boundaries of the Leyden Facility.

 

In recent years, the Leyden Facility has come under intense public scrutiny due to a series of events concerning natural gas migration.  These events include a 1998 jury verdict in a Jefferson County District Court civil action brought against Public Service, which found that Leyden storage gas had migrated on to an adjacent landowner’s property, and the release of information concerning a new observation well, Well No. 36, which discovered storage gas about 175 feet from the mine cavern, but within Company-owned property.  The reaction in the press and by governmental officials, local landowners, developers and environmental groups to this information caused Public Service to re-evaluate the continued viability of Leyden as a gas storage site.  The Company concluded that a major natural gas storage operation such as Leyden, with its associated technical complexities and uncertainties, is inconsistent with the rapidly growing residential and commercial development being experienced in the area.  The Colorado Public Utilities Commission authorized the abandonment of the Leyden Facility from public utility service by orders issued December 29, 2000 and February 23, 2001.  Copies of the Public Utilities Commission’s orders are attached hereto as Appendix E.

 

24.   

25.  D.  Gas Migration and Leakage of Storage Gas From the Leyden Facility

26.   

27.  Public Service believes that to the extent any gas migration has ever occurred from the Leyden Facility, such migration could only have occurred through sandstone lenses in communication with the mine caverns.  While any such migration is virtually impossible to quantify with any degree of accuracy, at the end of the closure procedures proposed herein any such migrated gas will be at native pressures and pose no threat to safety or the environment greater than the coal bed methane gas already present in the underlying formations in the area.  In addition, Public Service firmly believes that, based on the characteristics of the Upper Laramie, the only way storage gas could ever leak to the surface in sufficient quantities to be recognized as such is through artificial penetrations, such as boreholes, through the cap rock.  There have been a few isolated instances of storage gas leaking to the surface over the 40-plus year life of the facility.  But it is important to note that in each case the cause was, in fact, a borehole.  The leaks were found by Public Service during leakage surveys, and they were all promptly repaired.

 

The first of these leaks was found in the Barbara Gulch area as bubbles under ice in 1964.  The source was traced back to an abandoned water well extending from below the mine level.  The well’s casing was removed and new casing installed.  This borehole is now operated as observation Well No. 17.

 

28.  In the mid 1970’s, gas bubbling was observed inside the concrete liner of shaft seal no. 2.  It was found that this gas bubbling was associated with pumping water from the east workings from water well nos. 7 and 13.  In response, Public Service discontinued pumping from these wells to allow the standing water in this area of the mine to cover the bottom of shaft no. 2.

 

Another borehole that was found leaking to the surface was discovered during a surface leakage survey that is a part of a regular effort by the field operators.  In December 1979, a surface leak of storage gas was located on the northeast edge of the field.  Again, a drill rig was brought in to the location of the gas and began drilling.  An unplugged core hole from the mining era was found shortly after drilling began.  This hole was cleaned to bottom, around 500 feet, and casing was cemented in the hole.  This is now operated as observation well no. 23.

 

To Public Service's knowledge, no gas from the storage facility has ever escaped to the surface except through man-made holes punched through the cap rock as explained.  Otherwise, the cap rock seal has been one hundred percent effective.

 

Public Service employs several methods for monitoring gas leakage at the Leyden Facility.  First, each well is visited and inspected not less than once per week.  Second, a walking survey with gas detection equipment is performed on a regular basis over the storage field area and the buried gas gathering piping.  An annual inspection of the gas storage area is also performed from a helicopter by looking for stressed or dead vegetation.  Finally, permanent soil vapor extraction points have been installed around the southeast perimeter of the storage area.  Samples from these monitor points are collected and analyzed in a laboratory for hydrocarbon gas content.

 

In 1999, Public Service drilled an observation well, Well No. 36, in which it discovered the existence of storage gas in a Lower Laramie sandstone about 775 feet below ground level outside the perimeter of the mine cavern.  The most likely path of the gas found in Well No. 36 is through fractures in the Lower Laramie rock above the original mine level that created a pathway to the sandstone lens allowing gas to migrate to this point.  This pathway was likely created as the roof collapsed into the now rubble pile area.  Once in the sandstone the gas appears to have migrated to the area where Well No. 36 was drilled.

 

III.   Water  Flooding of the Caverns and Removal of Storage Gas

 

29.  During the early engineering design work of the facility closure process, Public Service concluded that flooding of the abandoned mine workings with water was the most efficient and effective means to extract the remaining recoverable storage gas and retire the gas storage reservoir.  Injection of water is necessary to displace the gas volumetrically in the mine cavern.  Water flooding would also return the property as nearly as practical to its condition before gas storage operations commenced.  Although the underlying Fox Hills aquifer would fill the underground caverns eventually through natural water flow, it was determined that this natural water flooding process would take approximately 40 years, and would require Public Service to retain gas storage rights and remain on the leased property during this period.  It was therefore concluded that an external supply of water would need to be secured to facilitate the flooding operations.  An estimated 2100 acre-feet of water would be required to accomplish this.  Due to federal Environmental Protection Agency regulations, it was also concluded that the water supply should be potable.

30.   

31.  In mid-2001, Public Service and the City of Arvada (the “City”)) began discussing the concept of converting the caverns to water storage for the City’s use.  If the project were possible, it was believed that Public Service would get an economic, reliable, and high quality source of water necessary for the abandonment of the gas storage operation, significantly reducing the cost of the abandonment process.  The City in turn would be able to develop an innovative water storage facility with minimal use of land surface and minimal to no losses due to evaporation -- ideal for a long term “drought’ storage facility.  Many of the existing wells used in Public Service’s gas storage operations would also be useful to the water storage project, providing further cost benefit to both Public Service and the City.  Lastly, as a municipal water storage facility, the Leyden site would continue to serve the local community and provide a substantial public benefit, while maintaining current restrictions on surface development.  Public Service and the City agreed that it seemed to be an ideal fit.

 

32.  As a result, an agreement was consummated between Public Service and the City providing for the City to supply a quantity of water sufficient to flood the caverns, the termination of Public Service's rights under existing gas storage leases (including one lease where the City had acquired the landowner's interests),the City's acquisition of new rights and construction of facilities to conduct water storage operations, Public Service's conveyance of certain wells and equipment useful for the City's water storage operations, and the conveyance of an option (and funds) for the City to purchase a 102-acre parcel of land adjacent to the Leyden site.This Agreement was approved by the Arvada City Council on January 27, 2003, and was fully executed on January 28, 2003.  The Agreement with the City is subject to Public Service obtaining approval of its Closure Plan from the Commission.  A copy of the Agreement between the Public Service and the City is attached to this Closure Plan as Appendix F.

 

The last injections of natural gas by Public Service into the Leyden Facility for gas storage occurred on September 30, 2001.  After this, and through the 2001-02 winter heating season, Public Service used the Leyden Facility strictly on a withdrawal basis.  Public Service is currently drawing down the Leyden Facility using compression in order to remove the remaining recoverable gas.  Figure 1 is a plot showing the remaining gas in storage and daily gas withdrawal rate since September 2001.  The field is generally on line each week, producing from Monday morning through Friday afternoon under compression-assisted withdrawal.  The compression equipment is shut down over the weekend, as the station is no longer staffed during that time.  The recovery of the storage gas through the continued use of compression is expected to continue during much of the closure process. 

 

 

In accordance with the Agreement with the City of Arvada. Public Service plans to inject potable water into certain wells to aid in the removal of storage gas from the Leyden Facility.  In April 2001, Public Service received authorization by rule from the Environmental Protection Agency, under the requirements of Title 40 CFR, Section 144.24.  Under the Agreement with the City of Arvada, the City will provide treated water delivered to the injection wells.  The water flooding and concomitant removal of the remaining recoverable natural gas from the underground storage reservoir is anticipated to occur between the Summer of 2003 and the end of 2005.  Subject to approval by the Commission of this Closure Plan, the injection of water will begin during Summer 2003 at rates that are dependent on the availability of water as affected by the current drought.  The City will build the injection delivery system that will be capable of injecting water at rates of up to 3000 gallons per minute.  All water provided by the City is to be delivered as directed by Public Service to one or more of the following wells presently operated by Public Service within the boundaries of the Leyden Facility:  (i) Well No. 12 located in the SW/4 of Section 34, T. 2 S., R. 70 W; (ii) Well No. 7 located in the SW/4 of Section 26, T. 2 S., R. 70 W., or (iii) Well No. 18 located in the SW/4 of Section 26, T. 2 S., R. 70 W.  Water injection is expected to occur on an intermittent basis and continue until the water level in the east cavern reaches the casing shoe of Well #5, located at 5144 feet above sea level and in the west cavern until the water level reaches the casing shoe of Well #9, located 5149 feet above sea level.  It is at each of these points, which reflect the uppermost point of exit in each of the respective caverns, that the caverns will be fully flooded. 

 

IV.   Conversion of Certain Gas and Water Wells to Water Storage Operation

 

Several of the existing wells at the Leyden Facility will be used for the injection of water and later transferred to the City of Arvada for its use in planned water storage operations.  The Agreement with the City of Arvada provides for Public Service to convey to the City all of Public Service's right, title and interest in and to:  (i) all water wells, water rights associated with water wells, and all other water rights and/or rights of use related to the storage leases or Public Service's operations thereunder; (ii) all injection wells, withdrawal wells, pumping equipment, pipelines and other equipment useful for the City's use in proposed water storage operations, and (iii) all easements, rights of way, surface use agreements, and similar rights of access held by Public Service in connection with the wells, rights, and equipment to be conveyed.  Under the Agreement, once these wells and other properties are conveyed to the City, the City will assume and be responsible for all obligations to plug and abandon or reclaim the wells and other properties and to restore the surface of the lands on which such wells and properties are located, and Public Service will have no further liabilities for such obligations.  It is anticipated that the following wells will be transferred to the City at the time closure activities are completed:

 

Well #4, West Cavern

Well #4 is currently a gas withdrawal well on the north end of the west cavern.  This well will be used to recover gas that is displaced as water floods the caverns.  At the time water reaches the 10¾-inch casing shoe of this well, 5145 feet above sea level elevation, gas recovery will be complete.  A temporary plug will be set in the bottom of the 10¾-inch casing in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operation.

 

Well #5, East Cavern

Well #5 is an east cavern gas withdrawal well.  It is the structurally highest well in the east cavern.  This well will be used to recover the gas being displaced as the cavern is flooded with water.  When the injected water level reaches the 7-inch casing shoe located at 5144 feet above sea level, gas recovery will be complete.  A temporary plug will be set in the bottom of the 7-inch casing in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations.

 

Well #7, East Cavern

An east cavern well, Well #7, was drilled and operated as a water production well.  It historically had been a marginal producer, having a poor connection to the cavern area.  This well was recently worked over to improve its capacity as a water injection well.  A 7-inch liner was installed in the well down through a previously open hole section below the cemented casing.  A 1.66-inch tubing string and down hole pressure gauge were also set during that workover.  Its use as a water injector will be evaluated at the time water is available for injection.  This well would then be transferred to the City for use in its water storage operations.

 

Well #8, West Cavern

Well #8 is currently a gas withdrawal well on the south end of the west cavern.  This well will be used to recover gas that is displaced as water floods the caverns.  A 8⅝-inch liner is set through the cavern level in this well.  At the time water reaches the 13⅜-inch casing shoe of this well, 5011 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 8⅝-inch liner in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations.

 

Well #9, West Cavern

Well #9 is currently a gas withdrawal well on the north end of the west cavern.  It is structurally the highest well in the facility.  This well will be used to recover gas that is displaced as water floods the caverns.  At the time water reaches the 7-inch casing shoe of this well, 5149 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 7-inch casing in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations.

 

Well #12, West Cavern

A west cavern well, #12, has been the primary water withdrawal well.  It will be used as the primary water injection well.  This well currently has a submersible pump and 3½-inch tubing for water production.  The pump and tubing will be removed to aid in the injection process.  This well also has an existing 1.66-inch tubing string and down hole pressure gauge used for monitoring.  The 1.66-inch string and the down hole gauge will remain in place to monitor the injection process.  Following injection, the well will be transferred to the City for use in its water storage operation.

 

Well #19, West Cavern

Well #19 is a gas withdrawal well in the west cavern.  A 7-inch liner is set through the cavern level in this well.  When the injected water level reaches the 9⅝-inch casing shoe at 5050 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 7-inch liner in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations.

 

Well #21, West Cavern

Well #21 is currently a water withdrawal well that produces water from the west cavern.  This well and pumping equipment will be transferred to the City in its current condition.

 

Well #30,West Cavern

Well #30 is a gas withdrawal well in the west cavern.  This well will be used to recover gas that is displaced as water floods the caverns.  At the time water reaches the 9⅝-inch casing shoe of this well, 5072 feet above sea level elevation, gas recovery will be completed.  A temporary plug will be set in the bottom of the 9⅝-inch casing in order to fill the casing to surface with water.  The well will be logged to verify good cement bond and a gas detection log will be run.  If gas is found, the area will be perforated for possible additional gas recovery or venting.  Following that, the perforations would be cement squeezed, the temporary plug would be removed and the well transferred to the City for use in its water storage operations.

 

 

V.   Abandonment of Gas Injection/Withdrawal Wells

 

The remaining gas injection/withdrawal wells, Wells #3, #14, #15, #16, #18, #22, #25, #26 and #29, will be plugged and abandoned following these general procedures.  The injected water level will be allowed to reach above the production casing shoe and a permanent plug will be set.  The well bore will be filled with water and a cement bond log and gas detection log will be run.  Copies of these logs will be forwarded to the Commission Staff.  If inadequate cement or gas accumulations are suspected from these logging results, a remedial action such as a cement squeeze on a poor bond zone or perforating and evaluating a logged gas show will be conducted.  If gas zones are found in this manner, the gas will be recovered into the gathering system or vented as appropriate.  The well would then be abandoned according to the prevailing rules of the Commission.  The surface equipment and fencing will be removed and the site reclaimed according to the lease agreements and Commission standards.  The Commission’s Rules and Regulation govern the abandonment of gas storage wells.  In accordance with these rules, the Company will formally file its notice of intent with the Commission to plug each individual well, prior to any abandonment.  This notice of intent would contain information regarding the design, procedures and materials to be used in the plugging operations.  After the Commission approves or modifies the procedure, the field plugging operations will be conducted and the Commission will be notified by means of a Subsequent Report of Abandonment.

 

VI.   Abandonment of Shaft Seal Systems

 

The shaft seal systems refer to the four original mine shafts that were used to extract the coal during the mining operations from 1903 to 1950.  These shafts, which are about 10 feet by twelve feet on the surface, were originally vertical rectangular openings that extended from the surface to coal seams.  During the conversion of the facility for gas storage, these shafts were reopened and cleaned out to bottom.  A sealing mechanism was constructed in each of the shafts to contain the gas pressure during storage.  Roughly described from bottom to top, the seal consists of a concrete plug that was poured in the mined cavern section up into the shaft itself.  Refer to Appendix B for a photograph of one of the shaft seals.  A coarse fill material, (gravel), then fills the shaft to above the water level that was present in the mine during this shaft work in 1961.  This condition describes shafts #3 and #4.  Shafts #1 and #2 were only cleaned out to the level of the standing water in the shafts at that time.  Workers then entered the shaft down to the level of this fill to enlarge the diameter of a short section of each shaft by a few feet.  Another, or upper, concrete plug was then poured in this enlarged shaft area, typically 20~30 feet in height.  Above this upper plug is the mud section that varies from 50 feet to 123  feet, depending on the shaft.  The mud section is clean gravel and 9.0 pound per gallon drilling mud.  On top of the mud section is a short filter section, (sand), followed by a compacted clay fill section.  Bank run gravel then fills the shafts to the surface.  The shafts all have concrete liners from the surface to varying depths from 50 feet to 144 feet, and each is equipped with a metal cap with service entrances.  A well from the surface of each shaft extends down to the mud section.  Drilling mud has been circulated on a regular basis at each location in order to suspend the mud solids and additional mud is added as necessary.  The head created by this column of mud has been kept above storage pressures through out the facility’s operating history.

 

The proposed procedure for abandoning these shaft seal system is as follows.  The shafts will continue to be maintained as they were during normal operation until the gas pressure in the caverns falls below 40 psig.  When the cavern pressure is less than 40 psig, the circulation procedure will change and, as additional fluid is needed, only fresh water will be added instead of the 9.0#/gal mud.  If a shaft then circulates only the fresh water, the circulation and addition of water will be discontinued.  If the presence of gas is noted in the shafts above the mud section, the remedial action would be to add fresh water and reinstate the regular circulation schedule.  If this effort were not successful, mud would then be added and circulated.  At the time the injected water level in the caverns stands as high as the bottom of the mud section in each shaft, that shaft’s mud circulating well could then be plugged and abandoned per normal Commission rules regarding abandonment of wells.

 

 

VII.   Abandonment of Observation Wells

 

The Leyden Facility includes 17 wells that are classified as observation wells.  These wells provide a variety of data such as the monitoring of water levels in formations both above and below the storage zone, monitoring of repairs made to boreholes found during the storage operation, such as Wells #17 and #23, wells drilled for the purpose of improving the geologic description of the area, and wells that were unsuccessful as gas injection/withdrawal wells.  The following provides a well-by-well description of the current disposition and plans for these wells.

 

Well #1

This well was the first well drilled in the field and was planned as a gas injection-withdrawal well.  It was unsuccessful for that purpose as it encountered an unmined coal pillar.  It was plugged and abandoned in 1969 although the surface equipment is still in place.  The surface equipment will be removed and the well site reclaimed.  This work can be performed at any time during the closure process.

 

Well #2

The #2 well was also drilled as a gas withdrawal well.  It too found unmined coal instead of cavern and has been used as observation since that time.  A cast iron plug will be set in the bottom of the well, the well bore displaced with water and cement bond log and gas detection log will be run.  Poor cement and/or gas accumulations behind casing will be evaluated and remedied if found.  The well would then be plugged and abandoned according to current Commission rules and the surface reclaimed.  The abandonment work on this well could be done at anytime during the closure process.

 

Wells #10 & #11

Wells #10 and #11 are observation wells over the mined areas of the east and west caverns, respectively.  These wells are about 400 feet deep and monitor a water zone of the Upper Laramie Formation that is shown to be hydraulically isolated from the Lower Laramie water bearing sands and coals where the gas is stored.  These wells will continue operating as observation wells until the water injection phase of the closure is completed.  At that time, these wells will be plugged and abandoned according to the prevailing rules of the Commission and the well site will be reclaimed per terms of the lease agreements.

 

Well #13

Well #13 was originally drilled and operated as a water production well from the east cavern.  This well was a marginal water producer and pumping was discontinued in the early 1970’s after the east cavern was pumped down for gas storage operations.  The east cavern, having been mined earlier and somewhat higher in the stratigraphic section, does not have the water influx problems as the newer and lower west cavern.  This well was recently reworked to correct casing problems.  The cavern level was plugged and an upper zone of the Lower Laramie was perforated to evaluate a suspected gas show on logs.  That zone has shown to be dry.  This well could be plugged and abandoned at anytime during the closure process according to the prevailing Commission rules and lease agreements.

 

Well #17a and #17b

These wells are the result of a repair made to a disused water well that was found to be leaking gas to the surface in the early 1960s.  The original well bore was believed to be a coal exploration core hole that penetrated the Laramie Fox Hills aquifer.  The rancher then used it for stock water while it flowed to surface.  A short time after gas storage operations began, bubbles were found under ice in the adjacent Barbara Gulch.  A drill rig was used to reenter the borehole, remove the old casing and set and cement the new casing.  Difficulties during the workover caused the abandonment of the first reentry.  The rig was moved over a couple feet and a new well was started to reenter the original hole.  Both wellheads are still in place and are referred to as #17a and #17b.  The #17b well monitors the Lower Laramie at the level of the coal seams.  These wells will be plugged and abandoned according to Commission rules and the lease agreements at the time the water injection into the caverns is completed.

 

Well #20

This well was drilled in the mid 1970’s to observe an apparent problem with the east cavern shaft sealing systems.  When the east cavern water was pumped down to a level that exposed the shaft bottoms to the storage gas, leakage occurred up the #2 shaft.  This well was drilled and used to monitor this problem.  Pumping was discontinued from the east cavern and the shaft bottoms where again submerged.  This remedied the leakage from the #2 shaft.  The #20 well will be plugged and abandoned according to Commission rules and the lease agreements after the #1 and #2 Shaft Seal systems have been abandoned.

 

Well #23

Well #23 was drilled in 1981 to repair an old coal exploration core hole that was found to be leaking to surface.  The leak was found during one of the regular surface surveys that were used to search for leaks.  A drill rig was moved over the spot of gas leakage and the core hole was cleaned out and casing was set.  Located over the north edge of the east cavern, this well will be plugged and abandoned according to Commission rules after the water injection in the east cavern is completed.

 

Well #24

This well, located above the west cavern, was drilled to enhance the understanding of the geology of the cap rock at the Leyden facility.  It will be plugged and abandoned according to Commission rules and the lease agreement after the water injection in the west cavern is completed.

 

Well #27

This well, located above the west cavern, was drilled in 1990 to evaluate a shallow gas charged formation that was encountered while drilling wells #25 and #26.  The gas charged zone was encountered at 137 feet G.L.   The well was completed in the zone and a gas sample taken from the well.  The gas was confirmed to be storage gas, which probably entered the sand from casing leaks on Well #15 and #16 which had been repaired earlier in the year.  The well is monitored weekly and no significant pressure change has occurred from the initial 15 psig well head pressure.  After wells #15 and #16 have been plugged this well will be blown down and plugged and abandoned according to Commission rules and the lease agreements.

 

Well #28

This well, located above the east cavern, was drilled in 1990 to investigate a potential leak in well #3 and #5.  The only gas that was encountered was at a depth of 474 feet G.L., which was well below the suspected leaks in wells #3 and #5.  A sample of the gas from the zone at 474 feet G.L. was analyzed and it was determined that the gas was naturally occurring formation gas.  This well could be plugged and abandoned at anytime during the closure process according to the prevailing Commission rules and lease agreements.

 

Well #31

This well, located north of the cavern, was drilled in 1993 to ensure that the gas storage operation was not having a significant negative impact on the Fox Hills or other major aquifers.  While drilling down to the Fox Hills, gas was encountered at 661 feet G.L.  The well was completed and tested.  Gas analysis confirmed that this was storage gas.  A down hole pressure gauge was installed to monitor the pressure in the Fox Hills and a gas meter was installed to monitor the volume of gas being vented.  Monitoring will continue until water injection into the caverns is completed and no significant volume of gas is being vented.  This well will then be plugged and abandoned according to Commission rules and the lease agreements.

 

Well #32

Well #32 was drilled in 1995, north of the cavern to define the northern extent of a shallow gas charged sand found in well #31.  No gas was encountered in this well.  This well could be plugged and abandoned at anytime during the closure process according to the prevailing Commission rules and lease agreements.

 

Well #34

 This well was permitted through the State Engineers office as a water well.  It was drilled and completed in 1997.  Public Service plans to offer this well to the landowner who holds the water rights.  If the land owner does not want the well it will be plugged and abandoned according to the Sate Engineers rules and the lease agreement.

 

Well #35

This well was drilled in 1999 north of the cavern in an investigation of the landowner’s claim of migrated storage gas.  The well was not perforated or otherwise completed.  This well could be plugged and abandoned at anytime during the closure process according to the prevailing Commission rules and lease agreements.

 

 

VIII.   Abandonment of Gathering Pipelines and Removal of Above Ground Facilities

 

As part of the Closure Plan for the Leyden Facility, Public Service plans to abandon in place all gathering pipelines upstream of an existing valve located in Leyden road west of the station.  These lines vary in size from 4 inches up to 20 inches in diameter.

 

The abandoned lines will be cut away at the “K” valve and at each well connect.  The pipelines will then be purged with an inert gas to remove any natural gas.  Following the purge, the lines will be sealed with either a flat plate, a cap or the ends filled with slurry.  The pipelines will then be abandoned in place.

 

33.  Facilities that are above ground such as valve sets, separators and pipe clean out sets, will be removed and the surface will be reclaimed.

 

IX.   Monitoring During Closure

 

During the closure process, Public Service will continue the monitoring activities that it currently has in place.  Public Service conducts three different monitoring procedures over and around the storage facility, as follows:

 

Surface Inspection

Public Service inspects all of its wells visually at least once per week.  On an annual basis, the buried gas gathering lines are surveyed by walking with gas detection equipment (FID).  An overland walking survey of the storage cavern is also conducted in the same manner.  These practices will continue until after the caverns have been flooded with water, gas recovery is completed and the wells are abandoned or transferred to the City of Arvada.

 

Soil Gas Testing

In early 2000, Public Service installed 17 shallow soil gas monitoring wells around the south and east boundaries of the storage field.  Following the initial 3 sampling rounds, testing has been done on a quarterly basis for a total of 11 rounds since inception.  Public Service plans to continue this testing until the storage caverns have been flooded with water, the gas recovery is completed and the wells are abandoned or transferred to the City of Arvada.

 

Observation Well Monitoring

Pubic Service uses several deep observation wells to monitor various aspects of the gas storage facility.  Locations above, around and below the storage area yield a variety of information about the formations and the surrounding hydrology.  These observation wells are described below.

 

Wells #10 & #11

These wells are located above the east and west caverns respectively and are completed in the Upper Laramie.  Water level reading are taken and recorded weekly.  The stable levels of water observed in these two wells indicate the Middle Laramie is not affected by the pressure variations of the storage gas during the active gas storage history.  These wells will be plugged and abandoned according to Commission rules and the lease agreements after the water injection is completed.

 

Well #33

This observation well is located on Public Service fee property.  Well #33, located in the Leyden station yard, is completed in the Foxhills formation and is used to monitor the piezometric head level of the Foxhills aquifer on the east,  or down dip, side of the storage area.  The water levels are measured and recorded continuously with a down hole pressure gauge.

 

Well #36

Well #36 is located Public Service fee property on the south side of the field within the current buffer zone around the mined cavern.  This well is dually completed, one zone monitoring a Lower Laramie sand at a depth of 782-789 feet below ground level.  This sand was found to contain storage gas during drilling operations.  The Foxhills sand is also completed in this and is mechanically isolated from the Lower Laramie sand containing the storage gas.  Both zones of this well are being monitored with recording pressure gauges. 

 

 

X.   Post Closure Monitoring

 

Two wells, #33 and #36, along with their monitoring systems will be kept operational for 24 months beyond the date of completed water injection into cavern space.  Additionally, the soil gas testing from the existing locations south of Leyden road will continue for the same period on the current quarterly basis.  If a hazardous condition is found during the course of the closure process or during the post closure monitoring period, the Commission Staff will be advised, and an appropriate remedial action will be developed and implemented.

 

 



[1]               “Coal Mine Methane Storage in Abandoned Mines,” EPA Coalbed Methane Outreach Program Technical Options Series (July 1998).  A copy of the EPA paper may be accessed through the following weblink:  www.epa.gov/coalbed/pdf/stu001.pdf.