Methane quandary - Advocates hail resource as an economic boon; foes fear impact on water supply

Great Falls Tribune Capitol Bureau


Tribune photo by Stuart s. white
Greg Creel, drilling supervisor for Fidelty E & P, explains the process of drilling a coal-bed methane well. Fidelity E & P wants to expand its natural gas operation in Montana.

DECKER, MT-- Buried deep in southeastern Montana's coal seams, another energy source is causing dollar signs to appear in the eyes of landowners, gas companies and the state of Montana: coal-bed methane, a clean-burning strain of natural gas.

But in the eyes of Montana rancher Art Hayes Jr., a Montana boom in methane production creates something else: tons and tons of water taken out of the ground and released into river basins, changing the water chemistry.

"This is the best-quality water in Montana," said Hayes as he drives along the Tongue River Reservoir, just north of several hundred coal-bed methane wells. "You're bringing groundwater that is laden with salt ... up to the surface. At some point, it's going to affect irrigated agriculture."

Methane is found throughout the coal seams that snake through the Powder and Tongue river basins of Montana and Wyoming. Methane production is booming in Wyoming, helping the state treasury to a projected $1 billion surplus.

Now, with the lifting of a three-year moratorium on coal-bed methane wells in Montana, supporters hope for a boom here, possibly creating more than $1 billion in taxes and royalties paid to schools, local governments and the state over the next 20 years.

"It can mean a huge difference in the per-capita income in the state, as well as the amount (of revenue) that goes to the state," said Keith Bales of Otter, a Republican state senator who's had exploration wells drilled on his ranch near the Wyoming-Montana border. "I think it is imperative that we go ahead and develop our natural resources."

In Montana, some 200 wells have been producing gas since 1999, just north of the Wyoming border near the Tongue River.

The state's only producer so far -- Fidelity Exploration and Production Co. -- is drilling more than 100 new wells and hopes to drill 3,000 wells over the next 10 years.

Other companies are exploring potential fields nearby, and the industry says as many as 9,000 to 10,000 wells could be drilled in Montana.

Support, concerns

Gov. Judy Martz is firmly behind the expansion, believing it can be done in an environmentally safe way.

"We're sitting on billions of dollars of assets that can be developed with wise technology, and I think it's incumbent on every person in Montana to say, our schools need to be fixed, we need to be able to fund (other) programs," she said. "If we don't look at the way we can do it ... then we have not served the people we serve well."

But some Montana ranchers who irrigate their hayfields in the Tongue River Valley and adjoining basins are watching with anxiety, wondering how the rush of drilling might affect water quality and supply.

They vow to fight the expansion any way they can, until they're convinced it won't harm the water.

"It seems like the industry is making the farmer and rancher out to be the bad guys, that we're just a bunch of obstructionists," said Ray Muggli, who ranches along the Tongue south of Miles City. "But we're pretty particular about what they do to this river. ... This river is the main artery of the community."

Producers remain optimistic they can expand in Montana and meet environmental challenges, saying they want to work with area ranchers and the state to ensure the impacts are minimal.

Yet they're frustrated by a litany of legal action filed against them by critics, led by the Northern Plains Resource Council and its rancher members.

"There are problems out here, and they're problems the industry is committed to work on," said Joe Icenogle, public affairs manager for Fidelity Exploration and Production. "But are they the majority of instances? No. ... But they're being exploited by certain groups who say the sky is falling."

Nine lawsuits are pending against Fidelity, other oil-and-gas firms and government regulators, challenging various aspects of methane drilling and its regulation in Montana and Wyoming.

Billions of gallons

But peel away the rhetoric, and the beef comes down to one thing: What to do with the gush of water produced by coal-bed methane production.

Coal-bed methane is natural gas contained in coal seams anywhere from 250 feet to 800 feet below the surface. To extract the methane, drillers must release pressure in the coal seam -- and that means pumping out literally tons of water.

A single well can produce several million gallons of water in a year. In the past two years, Fidelity's 240 producing wells in Montana released 2.3 billion gallons of water -- enough to supply half the city of Great Falls' municipal water supply for one year.

In Wyoming, its 12,000 producing wells crank out about 24 billion gallons of water a year. That amount would nearly fill the Tongue River Reservoir.

The industry is required to have water-management plans for this rush of water, and disposes of it several ways: placing it in ponds, sprinkling it on fields and, in Montana, pouring it into the Tongue River just north of the Montana-Wyoming border.

Fidelity has a state permit to discharge up to 1,600 gallons per minute of coal-bed methane well water into the Tongue. It has never hit that ceiling and usually discharges a lot less, releasing about 650 gallons per minute now.

When giving a tour of Fidelity's production fields in Montana, Icenogle shows people a discharge point on the slow-moving Tongue. The water, collected by an underground plumbing system that services 240 wells, trickles from a six-inch pipe into the river.

Icenogle fills a plastic jug with water from the pipe, offering it for a drink. Although it smells slightly of sulfur, the water is drinkable and mostly tasteless.

'Changing our water'

Downstream ranchers, however, say whether the water is drinkable is not the point.

Hayes, who ranches near Birney, is president of the Tongue River Water Users Association, whose 75 members use water from the Tongue River Reservoir.

He says he and some of his neighbors fear water from methane wells will make river water unfit for irrigation, damaging soil for generations to come. They're also concerned that extensive drilling will lower water tables and perhaps harm wells or other water supplies.

"It's changing our water chemistry already," said Hayes.

Water from methane wells has a higher sodium/saline content than river water, and also has a higher "SAR" -- sodium adsorption ratio. If water with a high SAR is placed on clay soils, it can "lock up" those soils, making it difficult for them to absorb water.

The Tongue basin has high clay content in much of its soil, and many ranchers use Tongue River water to irrigate their hayfields.

To address their concerns, the state this year set special SAR and salinity limits for the Tongue and Powder rivers and Rosebud Creek. Monitoring stations are set at eight spots along the Tongue in Montana.

If a violation occurs, the state would attempt to determine if coal-bed well runoff is to blame, and then ask producers to reduce the run-off. That hasn't yet happened.

Fidelity hired private soil scientists and an agronomist to test the soils of landowners in the drainage, to measure any potential impacts of methane well water.

But Hayes advised fellow Northern Plains Resource Council members not to participate in testing. He says the company might use information gained by the studies to defend itself against NPRC lawsuits.

Wally McRae is an NPRC member who ranches along Rosebud Creek and the Tongue. He says the real solutions to the water problem are ones the companies don't want to consider because they would cost money: "Re-inject" the water back into the ground or treat it before it's released into the river or elsewhere.

"I'd like to see some evidence of them at least trying some alternatives," he said.

Impacts uncertain

Actually, at least one company is considering treatment of the water. Powder River Gas Partners, a new production firm from Sheridan, Wyo., applied for a water-discharge permit in Montana and proposes treating the water before pouring it into the Tongue River.

Re-injection also has been considered, but industry officials say they're not sure it would work.

"We can't find a formation that will take the water, and it's too good (of quality) to just dispose of," said Icenogle. "We also feel that the aquifer will recharge on its own."

Hydrogeologists for the state and federal government are monitoring the groundwater, and say it's too early to gauge basin-wide impacts in Montana.

"I don't think we fully understand it yet," said Russ Levens, a hydrogeologist with the Montana Department of Natural Resources and Conservation. "The question is how long it's going to take to replace the waters you've taken out of storage (in the groundwater)."

While the water debate rages in Montana, methane production is under way in the Tongue River basin -- and not all ranchers are opposed.

Carl Dewey ranches near the Tongue along the Montana-Wyoming border. Driving through his property, one can see dozens of wellheads dotting the landscape.

Exploration firms contacted Dewey four years ago about drilling on his ranch, and they've been producing gas from those wells for the past two years. They've put in roads as well.

The companies pay Dewey for access to his property and consult with him about where to punch the wells and dispose of the water. He says he's used the water for his livestock and irrigation.

"You work with them, and they'll work with you," he said. "They're operating a company just like I operate a ranch. ... I've found that I can go to them with a problem before it becomes a problem. I can pick up the phone and call one of those companies and get it taken care of."

Dewey says he doesn't understand why some landowners are digging in their heels to fight methane production: "The water they're pulling out of the ground is better than my drinking water. (Some) say this water is wastewater. That's just a joke to me."

'Figure out best way'

Bales, a staunch supporter of the industry, says there will be impacts from methane drilling. But he believes the impacts can be managed and held to a minimum -- and that state regulators and the industry are committed to working on whatever problems occur.

"I think there are a group of people along the Tongue River that do not want any development under any circumstances," he said. "And I think there are others who do ... .

"If we are ever to develop our natural resources and turn the economy of this state around, we've got to analyze it, figure out the best way to do it, and then do it."

For now, Montana regulators are proceeding cautiously, processing permits while producers size up the gas resource and the political and legal climate in Montana. They're also working with Wyoming on how much water and what type of pollutants may end up in the Powder and Tongue rivers.

Jan Sensibaugh, director of the Department of Environmental Quality, says she's hopeful development can occur in "an environmentally protective manner." Treating the water would be a huge step toward solving some of the concerns, she says.

She also says she understands the concern of irrigators in southeastern Montana, and expects a battle while the state attempts to address questions about the impact of widespread coal-bed methane production.

"I think they will fight this because of the uncertainty surrounding the discharge into the river they use for irrigation," she said. "I don't see the ability to dissuade them from appealing decisions up front.

"I can't blame them," she added. "This is their livelihood. They can't accept the possibility that that could be destroyed."

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Originally published Monday, December 8, 2003


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