BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND ) CAUSE NO. 191
ESTABLISHMENT OF FIELD RULES TO GOVERN )
OPERATIONS IN THE MAMM CREEK FIELD, ) ORDER NO. 191-23
GARFIELD COUNTY, COLORADO )
This cause came on for hearing before the Commission at 9:00 a.m. on April 24, 2006, Suite 801, in The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for an order lifting the moratorium on drilling and completion operations established in Order No. 1V-276 for certain lands in Townships 6 and 7 South, Range 92 West, 6th P.M.
FINDINGS
The Commission finds as follows:
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 pursuant to the Oil and Gas Conservation Act.
4. On September 16, 2004, the Commission issued Order No. 1V-276, which among other things established that EnCana was a party to an enforcement proceeding relating to a natural gas seep in the West Divide Creek area in Garfield County, Colorado. The order resulting from that proceeding established a moratorium on drilling and completion operations within a two (2) mile radius of the seep. The moratorium was required to remain in place until the Colorado Oil and Gas Conservation Commission (“COGCC”) staff evaluates (1) the effectiveness of the Notice to All Operators Drilling Wells to the Mesaverde Group or Deeper in the Mamm Creek Field, Garfield County, effective July 23, 2004 (“notice”), and (2) EnCana’s compliance with any applicable Site Investigation and Remediation Workplan, Form 27, as approved or amended by the COGCC staff (“investigation and remediation requirements”), related to the gas seep in the area of West Divide Creek. After the COGCC staff evaluates the effectiveness of the notice and EnCana’s compliance with investigation and remediation requirements, it shall make any modifications it deems necessary and lift the moratorium when, in the COGCC staff’s determination, the appropriate safety precautions are set forth in the notice and EnCana has complied with all investigation and remediation requirements related to the gas seep in the area of West Divide Creek.
5. On December 27, 2005, corrected on March 16, 2006, EnCana, by its attorney, filed with the Commission a verified application for an order lifting the moratorium on drilling and completion operations established in Order No. 1V-276 for the below-listed lands:
Township 6 South, Range 92 West, 6th P.M.
Section 34: E½ NE¼, SE¼ SW¼, SE¼
Section 35: All
Section 36: S½ N½, S½
Township 7 South, Range 92 West, 6th P.M.
Sections 1 through 3: All
Sections 10 through 14: All
Section 15: E½, E½ NW¼
Section 23: NE¼, N½ NW¼
Section 24: N½
6. During the January 8, 2006 Commission hearing, a discussion was held regarding where the hearing in this matter should be conducted, as the application was filed in time for the February hearing scheduled in Denver. On January 11, 2006, the Board of County Commissioners of Garfield County filed with the Commission a Motion for Intervention under COGCC Rule 509.a. and a Motion for Continuance to the March 2006 hearing. Subsequently, the Commission docketed the matter for its March hearing scheduled to be conducted in Garfield County.
7. On January 25, 2006, Bill Barrett Corporation, by its attorney, filed with the Commission a Motion to Intervene under COGCC Rule 509.a.
8. On February 23, 2006, Lisa Bracken, Emma Eicher and Robert Eicher filed with the Commission a written statement under Rule 510. On March 16, 2006, Donald G. Price filed with the Commission a letter in support of lifting the moratorium.
9. On March 17, 2006, EnCana Oil & Gas (USA) Inc. continued the matter to the April 2006 hearing and the hearing in this matter was continued. Garfield County concurred with the continuance and with the Denver location for the April hearing.
10. At the time of
the hearing, the Commission heard testimony from Chris Williams, Environmental,
Health and Safety Manager for EnCana, who described the mitigation work
performed by EnCana subsequent to the discovery of the West Divide Creek Gas
Seep, including the samples taken and analyses results, the impacted ground
water at the seep discharge area, the benzene plume before and after the
installation of the remediation system, and the surface reclamation at the seep
area. He testified that there have been no human health impacts from the seep,
and that no water wells, creek, springs or ponds outside the discharge area
were impacted by the seep. Mr. Williams testified that no BTEX constituents
have been detected in West Divide Creek since April 2005, that there have been
no impacts to aquatic life from the seep, that stream bubble intensity and
length of affected reach continues to decrease, and that weekly sampling of the
creek will continue to be conducted. In addition, he testified that all of the
monitoring wells except two (2) show a decrease in benzene concentrations, that
the remediation system has effectively stopped migration of the plume, and that
the surface has been successfully reclaimed.
11. The Commission heard testimony from Joel Fox, Team Lead for the South Piceance, who described EnCana’s drilling plans for 2006 and its belief on what caused the seep. He testified that EnCana proposes two (2) new drilling pads and plans to drill eighteen (18) new wells. Mr. Fox presented the definition of a seep from the Geology of Petroleum, by A.I. Levorsen, 1967, and described common petroleum seeps in general and illustrated the geology of the gas seep likely to have occurred at West Divide Creek. He testified that the Divide Creek seep and the fault network were likely formed more than 20 million years ago, that the Schwartz wellbore probably intercepted a fault somewhere in the lower Wasatch or upper Williams Fork Formations, that the cement job failed sometime between final placement and approximately four (4) hours after placement, and that gas from the Schwartz Well charged the fault and seep system.
12. The Commission heard testimony from Mike Dempsey, Geologist for EnCana, who testified that EnCana believes the area identified by COGCC staff for additional requirements is supported by the geology, that the Wasatch Formation sands are low quality and discontinuous due to fluvial origin, and that naturally occurring gas in the Wasatch Formation is responsible for minor mud log shows.
13. The Commission
heard testimony from John Moran, Engineer for EnCana, who described EnCana’s
cementing practices prior to the July 23, 2004 Notice to Operators which
established additional cementing and reporting requirements within Mamm Creek
and Divide Creek Fields. He testified about hydrostatic pressure and cement
properties, the Schwartz wellbore configuration, and the cementing and
monitoring process currently in place. Mr. Moran testified that since the
Notice to Operators and EnCana’s new
process have been in place, no seep incidents have occurred and two (2) wells out of two
hundred thirty- one
(231)
have required follow up remedial cementing operations. In addition, he
testified that bradenhead pressure is now reported daily during the drilling
and completion phases, and monitored in real time during the production phase
using remote communication systems. Further, Mr. Moran testified that the
current processes would have prevented the seep and will continue to prevent
similar incidents. He testified that EnCana has improved its operations since
the West Divide Creek Gas Seep by increasing
the number of employees on each rig, the type of employees, and the training of
those employees.
14. The Commission heard testimony from Debbie Baldwin, Environmental Manager for the COGCC, who presented the staff’s review of the remediation of the West Divide Creek Gas Seep, including an analysis of the results from the ground water sampling. She testified that natural attenuation of the biogenic methane in the seep area has occurred.
15. The Commission heard testimony from Jaime Adkins, Northwest Engineer for the COGCC, who presented the staff’s review of data from wells drilled in and around the moratorium area. He testified as to the requirements established in the July 23, 2004 Notice to Operator, presented a summary of wells drilled under the Notice, and described how wells were remediated in and near the moratorium area. Mr. Adkins testified that the staff believes the Notice to operators has been 100% successful in preventing the type of conditions that resulted in the West Divide Creek Gas Seep. In addition, he presented proposed revisions to the Notice to Operators recommended by staff to be included for certain lands known as “The East Mamm Creek Area”. Mr. Adkins concluded that the moratorium should be lifted because the requirements in Order No. 1V-276 have been met, and that with the proposed revisions to the Notice to Operators, appropriate safety precautions have been established for future drilling.
16. Don DeFord, Garfield County Attorney, stated that the County supports the COGCC staff position on the application and supports lifting the moratorium but would like to reserve the right to come back to the Commission in thirty (30) days should the County have additional concerns.
17. Bill Barrett Corporation, by its attorney, stated its support of the application and concurred with the COGCC staff position.
18. Pursuant to Rule 510., a statement was made by Orlyn Bell who indicated that he was pleased with the cooperation between the parties, that the presentation was well done by all of the parties, and that the issues have been resolved with the proposed revisions to the Notice to Operators, along with the commitments made by from the operators. He described his concerns on behalf of the New Multa Trina Ditch Company located to the west of the seep area regarding potential impacts to the ditch from drilling operations.
19. The Commission heard from Dominick Spencer, Drilling Engineer for Bill Barrett Corporation, who stated that a superintendent is always on site during drilling operations, and that the superintendents are all certified well control operators.
20. A letter in support of the application was presented at the hearing from Thomas and Sandra Lloyd of Last Dance, LLC.
21. After deliberation, based on the facts stated in the verified application and the testimony and exhibits presented at the hearing, the Commission should enter an order lifting the moratorium on drilling and completion operations established in Order No. 1V-276 for certain lands in Townships 6 and 7 South, Range 92 West, 6th P.M., with operations being conducted in accordance with the revised Notice to Operators.
ORDER
NOW, THEREFORE IT IS ORDERED, that the moratorium established in Order No. 1V-276 is hereby lifted for the below-listed lands:
Township 6 South, Range 92 West, 6th P.M.
Section 34: E½ NE¼, SE¼ SW¼, SE¼
Section 35: All
Section 36: S½ N½, S½
Township 7 South, Range 92 West, 6th P.M.
Sections 1 through 3: All
Sections 10 through 14: All
Section 15: E½, E½ NW¼
Section 23: NE¼, N½ NW¼
Section 24: N½
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.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
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