BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO

REPORT OF THE COMMISSION

                        This cause was heard by the Commission on February 22, 2011, at the Chancery Building, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order for renewal of an existing pit permit to allow continued discharge of treated production water from the Wellington Muddy Unit into the Boxelder Creek alluvium in Larimer County Colorado, and upon a staff request to extend the current permit until such time as staff can complete the permit renewal process.

FINDINGS

                        The Commission finds as follows:

1.    Wellington Operating Company, LLC (Wellington) as applicant herein, is an interested party 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 the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4.    On August 15, 2005, the Commission entered Order No. 1-108, which authorized Commission staff to process and approve a variance from Rule 901.f. and Rule 904.a.(2) to allow Wellington to discharge treated produced water from the Wellington Muddy Unit into the Boxelder Creek alluvium at the following location:

Township 9 North, Range 68 West, 6^th P.M.

Section 7:      SE¼

5.    The variance authorized by Order No. 1-108 was subject to the Commission staff imposing conditions of approval including the following: 1) amount of financial assurance to be provided; 2) identification of the responsible party(ies);  3) establishment of points of compliance (POC) closer to the infiltration pit than the property boundary; 4) installation of additional monitoring wells spaced at regular intervals across the paleo-channel of Boxelder Creek and between the POC and the infiltration pit; 5) establishment of type, monitoring frequency and location of each monitoring well; 6) preparation of a contingency plan; 7) establishment of a process for immediate notification of Commission and Water Quality Control Division (WQCD) staffs if an upset occurs; 8) monitoring of irrigation wells; and 9) any other conditions Commission staff, in consultation with WQCD, believe are appropriate.

6.    Wellington was issued a discharge permit (Permit) on December 5, 2005 for the 3W Production Water Treatment Facility (Pit Permit Numbers 281818 and 281824).  The Permit expires by its own terms on December 31, 2010.

7.    On October 7, 2010, Wellington, by its representative, filed with the Commission a verified application for a permit renewal, and requested a hearing before the Commission.  The matter was heard during the Commission’s November 29, 2010 hearing; however a final permit was not ready for consideration at that time.  Instead the Commission issued Order No. 1-161 (Docket No. 1011-GA-19), which continued the Permit until such time as a renewal permit is approved by the Commission, or Order No. 1-161 is otherwise modified by action of the Commission.

8.    Staff has now completed a draft permit in cooperation with the WQCD. The Manager of the WQCD - Groundwater, Land Application, and Industrial General Permits Unit has indicated his concurrence with the issuance of the draft permit by letter dated January 28, 2011 to the Commission Director.  Staff proposes to issue a permit renewal to Wellington, containing largely the same terms and conditions as the previous permit, with the exception of reducing monitoring frequency in some cases from monthly to quarterly.

9.    The draft permit has been available for inspection at the offices of the Commission and on the Commission web page since the publication of the Notice of Hearing. No public comments have been received regarding the draft permit.  

10.  Based on the facts stated in the verified application, the concurrence letter from the CDPHE- WQCD dated January 28, 2011, having received no protests, and based on the Hearing Officer review of the application, case file, and analysis by the Commission technical staff, the Commission should enter an order authorizing the execution of the proposed discharge permit as presented.

ORDER

                        NOW, THEREFORE IT IS ORDERED, that:

1.   The Director is hereby authorized to execute a discharge permit renewal to Wellington Operating Company, LLC, with the substance and form as consented to by the Colorado Department of Public Health and Environment   - Water Quality Control Division, by letter dated January 28, 2011.

2.   The term of the Permit shall be from January 1, 2011 through December 31, 2015.

                        IT IS FURTHER ORDERED, that the provisions contained in the above Order shall become effective immediately.

                        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  8^th  day of March, 2011, as of February 22, 2011.

                                                            OIL AND GAS CONSERVATION COMMISSION

                                                            OF THE STATE OF COLORADO

                                                                                                                                                                                        By__________________________         __

                                                                        Robert A. Willis, Acting Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

March 8, 2011