THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE APPLICATION OF WELLINGTON OPERATING COMPANY, LLC FOR AN ORDER RENEWING THE PERMIT TO ALLOW CONTINUED DISHARGE OF TREATED PRODUCTION WATER FROM THE WELLINGTON MUDDY UNIT INTO THE BOXELDER CREEK ALLUVIUM, LARIMER COUNTY, COLORADO
CAUSE NO. 1
DOCKET NO. 151200689
TYPE: GENERAL ADMINISTRATIVE
ORDER NO. 1-196
REPORT OF THE COMMISSION
The Commission heard this matter on January 26, 2016, at the Colorado Oil and Gas Conservation Commission, 1120 Lincoln Street, Suite 801, Denver, Colorado, upon application for an order to renew the discharge permit(s) (Pit Permit #281818 and #281824) for the 3W Production Water Treatment Facility to allow Wellington to discharge treated produced water from the Wellington Muddy Unit into the Box Elder Creek Alluvium.
The Commission finds as follows:
1. Wellington Operating Company, LLC (Operator No. 95233) (“Wellington” or “Applicant”), 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 of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order pursuant to the Oil and Gas Conservation Act.
4. Rule 907.a. of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission (COGCC) establishes the policy of encouraging and promoting waste minimization by beneficial use, reuse and recycling.
5. Rule 907.c.(2)E. allows the discharge of produced water into the waters of the State of Colorado, and the beneficial use of this water in accordance with applicable state statutes and regulations governing the use and administration of water.
6. The Memorandum of Agreement between the COGCC, the Water Quality Control Commission (WQCC) and the Water Quality Control Division (WQCD) for the implementation of SB89-181 Amendments to the Colorado Water Quality Control Act (August 28, 1990; the “Water Quality MOA”) acknowledged the COGCC as the “implementing agency” for oil and gas activities under its jurisdiction that result in discharge to ground water, and for adopting points of compliance for such discharges to protect present and future beneficial uses of water.
7. Rule 907.c.(3) allows the reuse of produced water in a manner consistent with existing water rights and in consideration of water quality standards and classifications established by the WQCC for waters of the state, or any point of compliance established by the COGCC Director pursuant to Rule 324 D.
8. Rule 904.a.(2) requires production pits in sensitive areas to be lined. The results of the Sensitive Area Decision Tree, Rule 901.e. and Figure 901-1, indicate that four (4) of the key sensitive area criteria are not met for Applicants proposed project (e.g. the alluvial aquifer is not classified for domestic use, no well head protection area is impacted, the project is not close to domestic or public water supply wells, the depth to ground water is greater than 20 ft); nevertheless, the Applicant stated that by its nature, an aquifer recharge beneficial use project is “sensitive.”
9. Rule 502.b. allows variances to COGCC rules and regulations. Rule 910.a. lists applicable ground water concentrations. Rule 901.d. allows operators to propose alternative methods for determining compliance with COGCC rules and regulations using alternative points of compliance.
10. On August 15, 2005, the Commission entered Order No. 1-108 which, among other things, authorized the issuance of a permit to Wellington to allow discharge of treated produced water from the Wellington Muddy Unit into the Boxelder Creek alluvium.
11. On February 22, 2011, the Commission entered Order No. 1-165 which authorized a discharge permit renewal to Wellington to allow discharge of treated produced water from the Wellington Muddy Unit into the Boxelder Creek alluvium. The permit renewal expired by its own terms on December 31, 2015.
12. On October 6, 2015, Wellington, by its attorneys, filed a verified Application (“Application”) pursuant to §34-60-116, C.R.S., for an order to renew the discharge permit(s) (Pit Permit #281818 and #281824) for the 3W Production Water Treatment Facility to allow Wellington to discharge treated produced water from the Wellington Muddy Unit into the Box Elder Creek Alluvium affecting the following lands:
Township 9 North, Range 68 West, 6th P.M.
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13. On November 16, 2015, Applicant, by its attorneys, filed with the Commission a written request to approve the Application based on the merits of the verified Application and the supporting exhibits. Sworn written testimony and exhibits were submitted in support of the Application.
14. Geologic testimony and exhibits submitted in support of the Application by Parker J. Coit, Consulting Geologist employed by Telesto Solutions, Inc. for Wellington, showed that Wellington operates the Wellington Water Works (3W) produced water treatment facility in Larimer County, Colorado. Under Pit Permit # 281818 and # 281824 (“discharge permit”), the 3W facility is authorized to treat oil production water from the Wellington Muddy Unit (Entrada Formation) and discharge it into the Box Elder Creek Alluvium where it may be used for beneficial use.
15. The geologic testimony further showed that the 3W facility has been discharging treated water into the Box Elder Creek Alluvium through a series of Rapid Infiltration Basins (RIBs) since April 2006. Prior to the initial discharge, testing was performed at the 3W plant in 2005 in accordance with the original discharge permit including a Contingency Plan, Materials Containment Plan, and tracer testing, to establish baseline water quality down-gradient of the facility.
16. In addition, the geologic testimony showed that the 3W facility utilizes a dissolved air flotation prefilter of the oil field production water followed by walnut filtration and an activated carbon bed polish to remove hydrocarbons and treat the produced water in accordance with the groundwater quality limitations set forth in the discharge permit. The treated water is then discharged through the RIBs which allow for an accelerated recharge of the Box Elder Creek Alluvium. Wellington obtained classification from the Office of the State Engineer that produced water from the Wellington Muddy Unit is nontributary and that water quality regulations only pertain to the treated produced water. In accordance with the discharge permit, Wellington monitors multiple outfalls including the 3W facility (Outfall 001 A) and monitoring wells located within the Box Elder Creek Alluvium (Outfalls 050 C, 050 D, 050 E). These monitoring wells are down-gradient from the RIBs and are controlled in accordance with the effluent limitations and monitoring requirements. Two additional wells (Outfalls 050 A and 05 0B) monitor the water quality up-gradient of the RIBs.
17. Further, the geologic testimony showed that Wellington monitors water quality of the 3W facility (Outfall 001 A) on a monthly basis and from the monitoring wells (Outfalls 050 A, 050B, 050 C, 050 D and 050 E) on a quarterly basis. Monitoring data collected from the various outfalls indicates that the facility has been in compliance with the discharge limitations since the last permit renewal. The only exceedance ever recorded was benzene, measured only once in the facilities history during the month of September 2006 at 8 parts per billion (ppb); the stipulated limit for the facility is 5 ppb. Sufficient controls were instituted in the facility operation to avoid a recurrence of such an exceedance in the future. These controls include a more robust activated carbon unit change out schedule that swaps out activated carbon units prior to or at the detected breakthrough of 1 ppb benzene. The success of the control measures is evident in the fact that no additional exceedances of benzene or any other parameters stipulated by the permit have occurred.
18. The above-referenced testimony and exhibits show that granting the Application will allow more efficient reservoir drainage, will prevent waste, will assure a greater ultimate recovery of hydrocarbons, and will not violate correlative rights.
19. On December 8, 2015, the Commission entered Order No. 1-195 which extended the term of the pit permit to and including January 31, 2016, in order to allow Staff and WQCD to finish their review of the Application.
20. Staff has now completed review of the Application in cooperation with the WQCD. The Permits Section Manager of the WQCD – Clean Water Program has indicated her concurrence with the issuance of the draft permit by e-mail dated January 15, 2016, to the Commission Secretary. Staff proposes to issue a permit renewal to Wellington, containing the same terms and conditions as the previous permit.
21. 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.
22. Wellington agreed to be bound by oral order of the Commission.
23. Based on the facts stated in the verified Application, having received no protests, the concurrence e-mail from the CDPHE - WQCD dated January 15, 2016, and based on the Hearing Officer review of the Application under Rule 511., the Commission should enter an order to renew the discharge permit(s) (Pit Permit #281818 and #281824) for the 3W Production Water Treatment Facility to allow Wellington to discharge treated produced water from the Wellington Muddy Unit into the Box Elder Creek Alluvium.
IT IS HEREBY ORDERED:
1. The discharge permit(s) (Pit Permit #281818 and #281824) for the 3W Production Water Treatment Facility to allow Wellington to discharge treated produced water from the Wellington Muddy Unit into the Box Elder Creek Alluvium should be renewed.
2. 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.
3. The term of the Permit shall be from February 1, 2016, through February 28, 2021.
1. The provisions contained in the above order shall become effective immediately.
2. The Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.
3. Under the State Administrative Procedure Act the Commission considers this Order to be final agency action for purposes of judicial review within 35 days after the date this Order is mailed by the Commission.
4. An application for reconsideration by the Commission of this Order is not required prior to the filing for judicial review.
ENTERED this 28th day of January, 2016, as of January 26, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
Julie Murphy, Secretary