Background

Coal beds usually contain methane gas. The gas is extracted through surface wells, which pump and discharge large quantities of water to lower the hydrostatic pressure in the coal seam, allowing the gas to escape through the wells. Well spacing is generally eight to 16 wells per section of land, or one for each 40-80 acres. When there are multiple coal seams there may be more than one well at each site. Certain deposits in the southeast and southwest US contain from 300-600 cubic feet of gas per ton of coal. Montana’s Powder River Basin coal typically holds only about 30 cu ft per ton. Coal bed methane (CBM) wells provide about 5% of the nation’s natural gas supply now, and could eventually supply 12%. There are 8,000 wells extracting gas in the US, with about 4,000 in Wyoming. Full buildout scenarios predict up to 40,000 wells in Wyoming. Development of CBM in Montana has begun. Since Montana only has about 5-10% of the Powder River’s CBM reserves, full buildout in Montana might be less than 10,000 wells.

The Montana Board of Oil and Gas Conservation (BOGC) has permitted 250 wells for Redstone Gas Partners, LLC in Montana, 13 wells for Powder River Gas and one for Pennaco. All are in the Powder River Basin. In addition, BOGC will authorize up to 200 exploration wells in Carbon, Stillwater, Park and Gallatin Counties as well as in the Powder River Basin. The Board will update a late 80’s programmatic environmental impact statement (EIS) on oil and gas development in Montana before authorizing additional wells. The Montana Department of Environmental Quality (DEQ) has issued one Montana Pollutant Discharge Elimination System (MPDES) permit authorizing a total discharge of 1600 gpm to the Tongue River from Redstone’s wells. About 125 of these wells are now operating.

Former Governor Racicot has appointed DEQ as lead state agency for preparation of the EIS which will also support decision-making on future discharge permit applications. The U.S. Bureau of Land Management (BLM), Miles City Office, is preparing an EIS to support future permitting as well. The state and federal agencies have convened an interagency working group to begin a joint document to serve both state and federal needs. Project scoping began with five public meetings in January. The final meeting was in Helena for the convenience of agency staffs and interested legislators.

Issues

Environmental issues associated with CBM development include water quantity and quality. CBM development will lower the level and pressure of the coal aquifer. If local springs and water supply wells rely on aquifers connected to the coal aquifer, they will be impacted. The Department of Natural Resources and Conservation (DNRC) developed a Controlled Groundwater Area Plan (CGAP) which has been adopted by the BOGC. The controlled groundwater area plan requires mitigation for the impacted water sources identified by adjacent landowners. The CGAP addresses water quantity issues.

Water quality is another issue. The water discharged by the wells in the Powder and Tongue River Basins has elevated salinity and sodium adsorption ratio (SAR) and is generally unusable for irrigation. DEQ staff are working with counterparts at the Wyoming DEQ to ensure that discharges do not violate water quality standards and thus cause impacts to water users such as irrigators on the Powder River. A greater challenge may be development of Total Maximum Daily Loads (TMDLs) on the Tongue and the Powder. These rivers are listed as impaired waters on the 1996 303(d) list, but not on the 2000 list. If the state and the U.S. Environmental Protection Agency (EPA) are not able to use the 2000 list, TMDLs on these rivers may require that water quality actually be improved. It will be difficult to improve water quality while accommodating substantial upstream development in Wyoming and development here in Montana.

Impoundments built at the request of landowners or as storage facilities to avoid water discharge may experience increasing salinity because of evaporation. Increasing salinity may make the water unusable for stock, and may pose a threat to wildlife and waterfowl at some future point. Increasing salinity may cause localized saline seep, vegetation impacts, and pose reclamation problems at the end of the 15-year project life. Normally dry or ephemeral watercourses will probably experience excessive erosion due to well water discharge.

A final issue concerns the schedule for EIS review and future permitting needs. The joint state/federal EIS schedule calls for a draft document to be released in September of 2001, and for a final EIS to be out in the spring of 2002. This is an ambitious schedule, but will still not allow the state to be as responsive to future permit applications as the industry desires. Permit actions contemplated in the EIS could not be made until summer of 2002. It may be possible to issue more expedient authorizations for wells that do not discharge to surface water under a revised general permit.