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Acreage in Leases Involves Coal Gas



By Dennis Webb

July 5, 2018 - In Colorado, gas would be produced from a coal mine rather than traditional drilling in the case of more than 5,000 of the nearly 8,000 acres the Bureau of Land Management is considering offering in an oil and gas lease sale.

That's according to Gunnison Energy, the company that has nominated the mine-related land and other North Fork Valley acreage the BLM is considering for the December sale.

"This isn't an area where there would be a lot of drilling," Gunnison Energy president Brad Robinson said of the acreage that overlies the Bowie No. 2 mine near Paonia, Colorado, which Bowie Resource Partners idled in 2016.

"It's a completely different project in every character," Robinson said.

Gunnison Energy has nominated other acreage in the North Fork Valley as well, as it seeks to do horizontal drilling for oil and gas in the Paonia Reservoir area and north of Paonia. The BLM says it is evaluating offering a total of some 7,900 acres in the North Fork Valley in the December sale.

The BLM announcement has drawn criticism from the Wilderness Society and the Paonia-based Citizens for a Healthy Community group due to the BLM's decision to considering offering North Fork acreage for lease. It previously had decided to defer offering tens of thousands of acres for leasing in the valley pending completion of a new resource management plan by the BLM Uncompahgre Field Office.

Robinson said the coal mine methane project — if it ever went forward — might involve drilling a single, shallow, vertical well to tap the gas there.

Underground coal mining in the North Fork Valley frees up large amounts of methane that is vented to the surface during operations to reduce the danger of explosions. The vented methane is a potent greenhouse gas and also an unexploited energy source.

Gunnison Energy is involved in an ongoing methane capture project at the now-closed Elk Creek Mine, a North Fork Valley operation owned by Oxbow Mining, a sister company to Gunnison Energy. In that case, Gunnison Energy owns the oil and gas rights involved. The project also involves other partners, including the Aspen Skiing Co., which contributed financially to the project due to its environmental benefits, and Holy Cross Energy, which buys electricity generated by burning the methane that is captured.

Despite the mine's closure, the project continues to produce gas and generate electricity due to the high volume of residual methane in the mine.

Robinson said that even if the gas rights are leased, it's far from clear that a methane-capture project would be commercially viable in the case of the Bowie mine methane.

"It's pretty tough to do. The gas isn't pipeline quality … so you've got to find somebody who will buy the electricity (generated by burning it) or do something else with it," he said.

Meanwhile, Citizens for a Healthy Community is planning to ask for an extension to the July 17 comment deadline the BLM has established for a public scoping period on North Fork and other Colorado acreage proposed for the December sale. The sale could include some 236,000 acres in total, much of it in northwest Colorado.

The citizens group has called the comment period "ludicrously short," while the BLM says it's in keeping with its new policy of expediting oil and gas leasing.

Natasha Leger, interim executive director of Citizens for a Healthy Community, said the BLM effectively further reduced the 15-day comment period it provided by kicking it off just before the Fourth of July, during a time when many people are on vacation.

Leger said her group considers it unnecessary and irresponsible for the BLM to be putting parcels out for lease now when the new resource management plan is due out next year.

"The BLM clearly deferred leases back in 2011 and 2012 because of recognition that the current RMP was old," she said.

"… Nothing seems to have changed from that perspective with the exception of you now have a Trump administration that is now pushing to lease public lands for oil and gas at a ferocious pace," she said.

All of the acreage Gunnison Energy has nominated for leasing except the mine acreage is more than 10 miles from Paonia.

"That kind of sticks to our operating plan to stay away from the populated areas," Robinson said.

The lease acreage it has nominated aside from the Bowie acreage would be developed using horizontal drilling if Gunnison Energy acquires the acreage, Robinson said. That involves drilling down and then out laterally for long distances.

Robinson said that in the case of the acreage in the Paonia Reservoir area, that would mean it would be able to produce gas by drilling from pads far enough away not to be visible from the reservoir. The wells would travel horizontally up to two miles below the reservoir, deep enough not to have any impacts on it, he said.

He compared it to the numerous wells that have been drilled beneath the Colorado River.

"There aren't any impacts. We're two miles, a mile and a half below a water body," he said.

Leger is concerned by Canadian research that she says shows that hydraulic fracturing of wells induces seismicity that can threaten infrastructure such as dams and reservoirs.

"That's of extreme concern to us given accidents that we know happen," she said.

She said the research recommends such structures be protected by a three-mile buffer between them and drilling.

Despite assurances from industry that its operations are safe, her group is worried more generally about potential threats to the North Fork Valley watershed.


"From our perspective accidents happen and the risks are just not worth it," she said. - Your Foremost Source for Coal News