Montana Courts Rule Coalbed-Methane Produced water is Ground-Water, not a Waste By-Product

Courts rule on complex water cases

Unanimous panel rejects arguments by companies

Gazette State Bureau

HELENA – Critics of unregulated pumping of water from coalbed methane wells scored a pair of legal victories this week as two Montana courts handed down rulings.

On Monday, Helena District Judge Thomas Honzel ruled that water pumped to the surface to extract coalbed methane is, in fact, groundwater.

The decision deals with a 2001 Montana law that seems to treat water produced in coalbed methane extraction differently from any other water pumped from underground. Honzel ruled that methane-related water is no different from other groundwater.

On Wednesday, the Montana Supreme Court held that the state’s Department of Environmental Quality and Board of Environmental Review, an appointed panel that sets environmental rules and resolves certain disputes, has the authority to regulate two components of methane-related water that farmers say fouls irrigation water.

Coalbed methane is natural gas found in coal seams in a wide swath of southeastern Montana and northern Wyoming. To extract the gas, drillers pump out the water that is holding it in the coal seams under pressure.

In Montana, this water has been the source of years of debate and legal wrangling centered on two themes: the quality of the water and the enormous amounts of it.

Montana’s richest methane country sits near the Tongue and Powder rivers of southeast Montana. Farmers in the region use the two rivers as irrigation water. Some of the farmland also contains clay soils.

Methane companies initially proposed pumping the methane water into the two rivers. But some of the methane water is especially salty, and local farmers complained that irrigating with salty water, especially with clay soils that can act as a kind of barrier, trapping the salty water near the surface, would harm their crops.

In 2003, the Montana Board of Environmental Review set numerical standards for two measurements of salt in waters of the region that limited the amount of salts.

That prompted six years of lawsuits. Energy companies, including Pennaco Energy, owned by Marathon Oil, argued that the state doesn’t have the authority to regulate methane water.

A Big Horn County judge rejected the energy companies’ claims, and the case was appealed to the state’s highest court.

A unanimous, five-justice panel again rejected arguments by the energy companies Wednesday, ruling that Montana’s limits on salts were properly decided and the board that created them had the right do so.

Beth Kaeding, chairwoman of the Northern Plains Resource Council, an agriculture and conservation group based in Billings that was involved in both cases, said the ruling seems to be the end of the lengthy debate.

“This is a true victory for Montana’s rivers and streams,” the Bozeman woman said.

A spokesman for Marathon did not immediately return phone calls seeking comment.

The second ruling deals with water quantity. While methane-related water may be salty in some areas, it also underlies a part of Montana where water can be scarce.

In 2001, the Montana Legislature passed a law that stipulated that methane-related water be treated differently from other kinds of groundwater. In 2004, the Fidelity Exploration and Production Co., a methane developer operating in Montana, applied for a state permit to give more than 3,800 acre-feet of methane-related water to ranchers and coal mining companies.

An acre-foot of water, a standard measurement, is the amount of water it would take to cover one acre of land with one foot of water.

Local water users appealed to the state, arguing that such an enormous amount of displaced groundwater might dewater their aquifers. These users countered that they have more senior water rights and, therefore, had a right to appeal Fidelity’s water use, which, they said, amounted to a junior water right.

However, the 2001 law treated methane water differently from other groundwater, with which senior users are allowed to appeal water uses by more junior users.

In this case, the water users lost their appeal on the grounds that Fidelity’s methane water was not groundwater.

Honzel’s decision, while not negating the 2001 law, affirms that methane-related water is no different from any other groundwater.

“The source of the water is still the ground,” he wrote.

Kaeding said the ruling was important because it means senior water rights holders can protest the displacement of water by methane companies.

“If the (coal bed methane) companies got their way, they were going to be able to dewater so many of these aquifers that ranchers in southeastern Montana depend upon and there would be no recourse for them,” she said.

Tim Rasmussen, a Fidelity spokesman, said the company was still digesting the ruling Wednesday. He said it could throw into doubt the 3,800 acre-feet of water the company now gives to ranchers for stock water and to coal mines for cleaning their equipment, keeping down dust and to use for employee showers.

“They’ve grown accustomed to having this water available to them,” he said.

Rasmussen said “it’s too early” to say if the company would appeal Honzel’s ruling.

Northern Plains was involved in both cases, but Kaeding said the group has no quarrel with coalbed methane development.

“We simply want them to do it right,” she said. “We can coexist.”

Published on Thursday, December 18, 2008.
Read this article in the Billings Gazette

Note from this website: Finally a State takes the stand to do the right thing and recognize that the water removed during the extraction of Coalbed-methane is ground water and in fact not just a waste by product of their industry. Now if other States including Colorado would just wake up.