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BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
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IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE IGNACIO-BLANCO FIELD, LA PLATA COUNTY, COLORADO |
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CAUSE NO. 112
ORDER NO. 112-150 |
REPORT OF THE COMMISSION
This cause came on for hearing before the Colorado Oil and Gas Conservation Commission (“COGCC”) on October 20,1998 at 8:30 a.m. in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing, as required by law. The matter comes on the Commission’s own motion pursuant to Rule 502.a. to review the status of Amoco Production Company’s oil and gas operations and monitoring efforts along with COGCC staff recommendations in the Pine River area of La Plata County.
FINDINGS
The Commission finds as follows:
Notice and Jurisdiction
1. Amoco Production Company (“Amoco”) in 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 of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.
Pine River Ranches History
4. On September 3-4, 1996, the COGCC conducted a hearing to consider the status and potential action related to identified coal bed methane seeps potentially associated with Amoco Production Co. ("Amoco") oil and gas operations near the Pine River Ranches subdivision in La Plata County, Colorado ("Pine River Ranches"). At that time the COGCC did not find cause to order Amoco to take action. The COGCC asked staff and Amoco to develop a plan for continued cooperative efforts to monitor the methane seeps, and to provide the COGCC with periodic status reports.
5. In October, 1996, Amoco settled the majority of the civil litigation several residents of the Pine River Ranches related to Amoco's oil and gas operations near Pine River and nearby methane seeps.
6. By memorandum dated November 14, 1996, COGCC Staff Engineer Morris Bell informed the Commission that Amoco settled the civil litigation, and further, that Amoco had agreed to work with staff on monitoring and mitigation efforts in Pine River. Mr. Bell's memorandum provides for staff to report back to the Commission at the end of 1997.
7. From the end of 1996 to the present, COGCC staff, Amoco, La Plata County Officials, area surface owners and operators have worked together to establish and implement a mitigation and monitoring system for the methane seeps located in Pine River Ranches.
8. At its regularly scheduled hearing conducted in April, 1998, the COGCC directed staff to meet with Amoco to discuss additional monitoring, well testing and possible production curtailment in Pine River.
9. Staff and Amoco have met in accordance with COGCC instruction on several occasions since the April hearing to discuss alternatives. In these meetings Amoco advised staff it would not shut-in certain wells and curtail water production near Pine River Ranches.
10. At its regularly scheduled hearing conducted on July 9-10, 1998, the COGCC moved pursuant to Rule 508.a. to notice for hearing a status review of the Pine River mitigation and monitoring efforts, and to consider whether to issue an order requiring Amoco to run certain tests and surveys which might help to determine if there is any relationship between water production from three area wells and the methane seeps. COGCC staff set the hearing for October 20, 1998.
October Hearing Data and Proceedings
11. On September 28, 1998 Paul Oldaker provided the Commission with an updated written report entitled Monitoring Data Review Pine River Ranches.
12. On September 30, 1998 Amoco provided the Commission with a written report evaluating production from the Dulin D-1 Well.
13. At the October 20, 1998 hearing the Commission heard the following testimony and evidence:
a. Amoco representatives testified regarding the status of gas and water production from gas wells near Pine River Ranches, and presented updated information regarding Amoco's and GORT's continuing mitigation and monitoring efforts in Pine River Ranches.
b. Dave Cox of Questa Engineering Corporation ("Questa") testified regarding Questa report and presented to the Commission updated information regarding gas seepage in the Pine River area, La Plata County.
c. COGCC staff presented the Commissioners with a written recommendation for continued monitoring and improvement of data collection at the Pine River Ranches area by Amoco.
d. La Plata County representatives discussed their views regarding public health, safety and welfare concerns associated with the Pine River Ranches seeps, and the County's preferences with respect to well monitoring.
14. After deliberation by the Commission found it appropriate to adopt the ten (10) recommendations attached as Exhibit A and the Commission referred four (4) recommendations attached as Exhibit A1 to the Gas and Oil Regulatory Team (“GORT”) and Amoco for additional review.
15. The Commission deferred any decision related to the appropriate rate of water production for the Dulin D Well until addition data is compiled and analyzed.
16. Amoco represented that it would comply with the terms of the Commission Order, provided that its compliance is not deemed a finding regarding or waiver of any defenses that may be available to Amoco with respect to claims made by the Commission or third parties related to its operations near Pine River.
17. The Commission found it appropriate to consider the funding sources needed to implement COGCC staff recommendations.
18. The Commission recognized the importance of cooperative efforts and encouraged data sharing by all parties with an interest in Pine River Ranches and the surrounding area.
19. The Commission found that the accuracy and reliability of the technical data obtained from the recommended operations should be carefully monitored, and the methodology carefully scrutinized.
20. The Commission found that new modeling work is not required at this time in order to implement the staff recommendations.
21. The Commission found it appropriate for COGCC staff to continue coordination of the outcrop seep study, coordinating with Amoco and other governmental agencies.
22. The Commission found it appropriate for COGCC staff to periodically report on the status of this Order in conjunction with the reports on the recommendation action.
23. Based on the information and recommendations presented at the time of hearing, the Commission should adopt the recommendations attached as Exhibit A, and cooperate with GORT in the implementation of additional recommendations described in Exhibit A1.
ORDER
NOW, THEREFORE, IT IS ORDERED that the Commission shall adopt the ten (10) recommendations attached as Exhibit A with the consent of Amoco Production Company, without waiving any defenses, in order to facilitate continued monitoring and improvement of data collection at the Pine River Ranches area.
IT IS FURTHER ORDERED, that the Commission shall refer the four (4) recommendations attached as Exhibit A1 to the Gas and Oil Regulatory Team (“GORT”) and Amoco for additional review.
IT IS FURTHER ORDERED, that no final decision regarding the production rates for the Dulin D Well shall be made until additional data is collected and analyzed.
IT IS FURTHER ORDERED, that no new modeling work shall be undertaken at this time.
IT IS FURTHER ORDERED, that any monitoring and study shall be conducted with close attention to the technical accuracy and reliability.
IT IS FURTHER ORDERED, that the COGCC staff shall continue coordination of the outcrop seep study, coordinating with Amoco and other governmental agencies.
IT IS FURTHER ORDERED, that COGCC staff shall identify funding sources available to implement the Commission’s recommendations.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith, as the party agreed to accept the verbal order of the Commission.
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 day of November, 1998, as of October 20, 1998.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203
July 5, 2018
Exhibit A
To that Certain Order of the Oil and Gas Commission No. 112-150 related to operations and monitoring in the Pine River area, La Plata County, Colorado.
The following recommendations were adopted by the Commission at the October 20, 1998 hearing:
MORGAN FRONT YARD WELL AND BAROMETER
Background: Originally the Morgan Front Yard well was the domestic water supply for Mr. Tom Morgan’s home. Amoco drilled an alluvial well as a replacement for this Kirtland Shale well and the Morgans now use the alluvial well for their domestic water. Pressure data collected since 1994 indicate a recovery in water level since usage stopped.
Recommendations: Staff recommends that monitoring of the Morgan Front Yard be discontinued and if it is appropriate and more convenient, then Amoco should move the barometer that is also at this location to one of the other monitoring wells.
METHANE GAS MONITORING IN SALMON AND MAGEE, AND FORMER GOEHRING AND FERRIS ALLUVIAL WATER WELLS
Background: Amoco has continued to monitor the concentration of methane gas in the Salmon and Magee, and the former Goehring and Ferris alluvial water wells. Recently this monitoring has occurred on a semiannual basis.
Recommendations: Staff recommends that methane concentration monitoring be continued, but reduced from a semiannual to an annual basis.
GROUND WATER SAMPLING
Background: The last samples from the Killian Deep, Killian Shallow, Killian Replacement, and Pick Bar wells, which were collected in 1993 and 1994, showed the ground water in all four wells to be Na-HCO3 type water with very similar concentrations. This suggests that in this area the Fruitland Formation discharged enough water into the alluvium of the Los Pinos River, that the predominate geochemical signature for the alluvial wells was essentially coalbed water and that the subcrop and shallow portions of the Fruitland Formation also contained coalbed type water. All of the other alluvial water wells in the study area contain Ca-HCO3 type water with a much lower overall total dissolved solids concentration. Eventually, Amoco was denied access to the Killian wells and additional ground water samples have never been collected for analysis.
A brief description of these four wells follows:
Killian Deep well is an open hole completion through the Fruitland Formation (41.4 fbgs to 271 fbgs)
Killian Shallow well originally was an alluvial well that “tagged” the top of the Fruitland Formation (0 to 32 fbgs - alluvium and 32 fbgs to 34 fbgs – Fruitland Formation). It was used as the water supply well for the former Killian household. Inadvertently the alluvium of this well was cemented off during completion of the nearby Killian Deep well. Subsequently, Amoco deepened this hole below the alluvium into the Fruitland Formation (34 fbgs to 45 fbgs) and this is now the monitored interval.
Killian Replacement is an alluvial well that was drilled as a replacement water supply well for the former Killian household.
Pick Bar well is an alluvial well (0 to 32 fbgs – alluvium and 32 fbgs to 33.5 fbgs Fruitland Formation)
Interpretations by some of pressure data from various monitoring wells in the Pine River Ranches suggest that the pressure in the Fruitland Formation has been declining and that the hydrologic system has gone from the Fruitland Formation discharging into the alluvium to the alluvium discharging into the Fruitland Formation. Staff believes that this question needs to be answered.
Recommendation: Staff recommends that Amoco collect water samples from the three Killian water wells and if possible from the Pick Bar water well for laboratory analysis of the major cations (Ca, Na, Mg, K) and anions (HCO3, CO3, SO4, Cl), and for iron, manganese, and total dissolved solids. This information will be used as one indication of whether the Fruitland Formation is still discharging to the alluvium of the Los Pinos River.
INSTALL STAFF GAGES OR STILLING WELL IN THE LOS PINOS RIVER
Recommendation: Staff recommends that Amoco install either a stilling well and/or two staff gages in the Los Pinos River. These would be used to collect information on fluctuations of the water level in the river and would be used to facilitate the interpretation of pressure data from the alluvial and shallow wells.
CALIBRATE TRANSDUCER PRESSURE DATA WITH WATER LEVEL MEASUREMENTS
Recommendation: Staff recommends that the pressure transducers in the Killian Deep and Killian Shallow, and if possible Pick Bar be field calibrated with actual water level measurements. This information would be used to determine whether the decrease in pressure shown in the data from the Killian Deep (shallow Fruitland well) is real or a result of equipment drift.
In addition, if possible water level measurements should be made in the Killian Replacement well.
DATA FROM MONITORING WELLS
Background: Data from the monitoring wells has typically been presented on individual graphs with the pressure in psi on the y-axis and time on the z-axis. This allows for comparison of data from an individual well, but makes comparison of data from several wells difficult. Although the conversion of the pressure data to elevations should be easy, there is still some confusion about the elevation of the measuring points used for calculating the elevation of the transducers in the wells.
Recommendations: Staff recommends that Amoco provides the actual elevations of the water level/potentiometric head on the graphs, an explanation for when equipment was not properly working or when data were not collected, an explanation of which vertical datum was used, and the accuracy of the transducer elevation.
Staff recommends that Amoco construct simple hydrogeologic cross sections to illustrate whether ground water in the Fruitland Formation is discharging or recharging the alluvium of the Los Pinos River. These should show the thickness of the alluvium, the projected subcrop of various coals and other units of the Fruitland Formation and the Pictured Cliffs, completions of selected alluvial and shallow bedrock wells, and water levels/potentiometric surface at various times since 1994.
GURR FEDERAL SHUT-IN WELL AND POLE BARN MONITORING WELL
Background: Data from the Gurr Federal and the Pole Barn monitoring well suggest decrease in pressure in the Fruitland Formation. Staff believes that a determination of the reliability of these data must be made
Recommendation: Staff recommends that Amoco determine whether the pressure data are accurate, or whether they are an aberration of the pressure monitoring technique and equipment drift. Monitoring should be continued and the transducers must be field calibrated and checked on a routine basis to ensure the accuracy of the data.
COLLECT AND ANALYZE A WATER SAMPLE FROM THE JAMES #1 WELL - PICTURED CLIFFS
Recommendation: Staff recommends that Amoco collect a Pictured Cliffs water sample from the James #1 well and analyze it for major cations (Ca, Na, Mg, K) and anions (HCO3, CO3, SO4, Cl), and for iron, manganese, and total dissolved solids.
REPORTING REQUIREMENTS
Recommendation: Staff recommends that Amoco prepare a written report compiling new and historic data. This report would be submitted to staff by March 1 and September 1 of each year for review and comment and would be presented by Amoco to the COGCC at the April October hearings.
WORK PLAN
Recommendation: Staff recommends that prior to implementing any of the above recommendations, Amoco develop and submit for approval a work plan detailing the methods to be used to accomplish each task.
To that Certain Order of the Oil and Gas Commission No. 112-150 related to operations and monitoring in the Pine River area, la Plata County, Colorado.
The following recommendations were referred to the Gas and Oil Regulatory Team (“GORT”) and Amoco Production Company for additional review:
SALMON #1 MONITORING WELL:
Background: The Salmon #1 monitoring well was an open hole through the transitional zone between the Kirtland Shale and the Fruitland Formation and the Fruitland Formation and it extended into the top of the Pictured Cliffs Sandstone. The total depth of the well was 635 feet, but the transducer was placed at 346 feet below the ground surface (fbgs) because of the change in hole diameter from 7.9” to 3.8” at 355 fbgs where coring began. In addition, approximately the lower 100 feet of the hole has filled with rock debris sloughed from the sides of the hole. Pressure data from this hole have always been confusing and perhaps erroneous due to the build up of a gas cap and flow within the hole from the transition zone into the lower Fruitland coals.
Recommendation: Staff recommends that Amoco develop a plan for entering the well and setting a cement plug below the transition zone (approximately 380 fbgs), thereby converting the well to a transition zone monitoring well only. In addition, the transducer or some other device for measuring pressure must be installed and a method for ensuring that reliable data are collected must be developed.
SALMON #2 MONITORING WELL
Background: The Salmon #2 monitoring well was the venting well during the mitigation tests. It was completed as an open hole across the transition zone and the Fruitland Formation. In addition, the surface casing was perforated to test for gas in some of the higher zones of the Kirtland Shale. Since the venting test, pressure data have not been collected from this well.
Recommendation: Staff recommends that Amoco complete this hole as a Fruitland Formation only monitoring well, cementing off the transition zone and perforations in the casing. In addition, a transducer or some other device for measuring pressure must be installed and a method for ensuring that reliable data are collected must be developed.
SALMON #3 MONITORING WELL
Background: The Salmon #3 monitoring well has been completed with a packer separating the transition zone from the Fruitland Formation. Pressure transducers have been installed both above and below the packer. The precise depth of the pressure transducer below the packer (i.e. in the Fruitland Formation) is not known; therefore, head elevation can not be calculated.
Recommendation: Staff recommends that Amoco reinstall this pressure transducer so that its precise depth will be known.
Background: Before the Salmon #3 monitoring well was completed as described above, a series of “packer tests” were conducted on various lithologic intervals in the open hole. Similar tests were also run in the Salmon #2 monitoring well. These tests measured the potentiometric head of each interval, and were useful in identifying the overpressured zone now referred to as the transition zone.
Recommendation: Staff recommends that Amoco determine whether the pressure measurements currently being collected in Salmon #3 are comparable to the packer test measurements. If not, then whether some conversion factor can be applied so that all pressure data collected from the Salmon #3 and the Salmon #2 can be used and compared.