Managing Produced Water at CBM Properties in the Rocky ... - IPEC

Managing Produced Water at CBM Properties
in the Rocky Mountain Region
Authors:
John E. Boysen
Deidre B. Boysen
BC Technologies, Ltd.
715 Grand Avenue
Laramie, WY 82070
Phone: (307) 742-5651 E-Mail: bct01@aol.com
ABSTRACT
The production of water with coal bed methane is a fact of life for energy producers. The
costs associated with managing produced water are significant and provide substantial incentive
to producers to reduce these costs. One potential method to reduce CBM produced water
management costs is to find suitable beneficial uses for the produced water.
In application, this simple concept becomes complicated by several factors. The first factor
complicating beneficial use of produced water is that the volumes, chemical compositions and
temperatures of produced waters are all site or location specific. In addition, the regulation of and
determination of acceptable beneficial uses for produced water are location specific. Finally, there
are multiple stakeholders in the beneficial use of produced water with clearly different interests and
a rigid hierarchy. The understanding that beneficial use of produced water is location specific and
dependent upon the interests and hierarchy of the stakeholders provides insight into the current
strategies applied to beneficially using CBM produced water.
In this paper, current treatment technologies and other techniques to beneficially use CBM
produced water in the Rocky Mountain Region of the United States are discussed along with how
location specific parameters impact these produced water management decisions. The relationship
between the hierarchy and interests of stakeholders involved in making produced water
management decisions is also discussed. Understanding the process for making produced water
management decisions will hopefully prove useful to future efforts aimed at increasing both the
production of CBM and subsequent produced water management strategies.

INTRODUCTION
At the present time, the production of water with coal bed natural gas is an accepted fact of
life for energy producers. The cost to transport, treat and/or dispose of this water increases the cost
of producing energy from a well. In economically marginal low-productivity formations, the costs
related to water management can prevent a well from being completed or can cause producing wells
to be shut in. In addition, the future production of oil and gas is expected to increasingly depend
upon production from economically marginal formations and from unconventional sources of oil
and gas. One promising unconventional source of natural gas is methane production from coal
seams. Like production from economically marginal resources, the production of methane from
coal seams may rely in the future upon a cost-effective method for treatment or disposal of
produced water.
Currently in the oil and gas industry, produced water is accepted as a liability. However,
as problems represent challenges, produced water management represents both a significant
operating expense and a potential opportunity to reduce production costs. Any reduction in the
cost of produced water management will increase the net profit from a well. To this degree,
reducing the cost of water management represents a significant means of increasing profits and
also of producing a resource.
Reducing the cost of produced water management represents both a means of increasing
the bottom line for energy producers and a means to enable future production of energy resources.
These two reasons alone provide ample incentive for producers to optimize their produced water
management planning effort. However, determining the answer to what makes produced water a
resource, and who would view it as a resource are valid questions. A beneficial use or need for
the water can make produced water a resource, and any stakeholder in the energy development
process that has a beneficial use for the water will consider it a resource.
OVERVIEW OF CBM WATER PRODUCTION
VOLUMES AND LOCATION-SPECIFIC
WATER MANAGEMENT PRACTICES
The produced water volumes and associated water management practices at coal bed
natural gas producing basins in the Rocky Mountain region reported in this paper were gathered
during the period of 1998 – 2002 as a component of a study on produced water management
practices funded by the Gas Research Institute. Data from production reports offered on state
agency websites was collected and entered into a database developed by BC Technologies, Ltd.
Database reports connected annual water production volumes at specific well locations with
producers. Using this information, a sample group of operators who reported high volumes of
water in the basins of interest was developed. Producers on that list were interviewed by
telephone to find out how they managed produced water generated at their leases. Produced
water volumes and actual water management practices as they were described during interviews

in 2000 – 2001 are provided for the Powder River Basin of northeastern Wyoming and
southeastern Montana, the Raton Basin in southern Colorado, the San Juan Basin in southwestern
Colorado, the Ferron Coal Trend in the Uinta Basin in eastern Utah, the Greater Green River
Basin in southwestern Wyoming, and the Hanna Basin in central Wyoming.
Powder River Basin
In 2001, statistics gathered from the Wyoming Oil and Gas Conservation Commission
indicated that about 60 producers were operating approximately 9,000 wells in the Powder River
Basin. These wells produced in excess of 254,000,000 mcf gas and 506,000,000 barrels of water.
Producers who responded to the interviews reported using a variety of strategies to manage the
water they generated during CBM production. Because the produced water generated at this time
was considered very clean and was able to meet Environmental Protection Agency (EPA) water
quality standards for surface discharge, many operators reported obtaining National Pollutant
Discharge and Elimination System (NPDES) permits to discharge CBM water into nearby natural
drainages. This was an extremely low cost strategy and was the most frequently cited method for
disposing CBM produced water in this basin. Other water management strategies in this basin
included constructing impoundments to store water for irrigation in the Spring and Summer
months, developing livestock and wildlife watering ponds; utilizing Class II injection wells and
Class V aquifer recharge wells, and constructing infiltration ponds, evaporation ponds and
misting towers.
In southeastern Montana, at the CX Field in the Powder River Basin, two producers were
actively developing coal bed natural gas in 2001. One producer operated about 233 wells while
the other operated five wildcat wells nearby. They reported producing approximately 8,000,000
mcf gas and 19,000,000 barrels of water. Strategies employed by this producer to manage the
water were varied and included surface discharge using an NPDES permit; irrigation of native
grasses; development of livestock ponds; aquifer recharge through injection into a Class V well;
and for dust suppression at a nearby coal mine. Produced water was also used for local highway
construction projects.
Raton Basin
There were approximately ten producers in the Raton Basin (Colorado side) in 2001.
These producers reported operating about 1,000 wells and generating approximately 76,943,000
mcf gas and 69,276,000 barrels of water at their CBM properties. They reported managing that
water beneficially by developing stock ponds and recycling the water for dust suppression and
hydraulic fracturing. They also disposed the water by discharging it to natural drainages under an
NPDES permit, evaporating it, or allowing it to percolate into the ground in infiltration ponds.
On the New Mexico side of the basin, there was only one producer in 2001 who operated about
148 wells. These wells generated about 5,385,000 mcf gas and 4,630,000 barrels of produced
water. This water was disposed by reinjection into Class II wells and beneficially used for
hydraulic fracturing, completions and workovers.
San Juan Basin

The Ignacio Blanco Field, which is known for the production of coal bed methane, is
located in the San Juan Basin in the southwestern corner of Colorado. In 2001, there were 43
producers operating approximately 2,000 wells at this field. Together, they generated about 2600
barrels of oil; 424,000,000 mcf gas and over 27,000,000 barrels of water. CBM wells located on
the New Mexico side of the basin were not examined for this study.
Producers who responded to interviews about their water management strategies reported
that most water is reinjected into Class II salt water disposal wells. Some producers reported the
use of commercial injection wells, others the use of company owned disposal wells. Some used
company-owned pipeline systems, while others relied on commercial water hauling services.
Economics and the geographical location of well sites were frequently noted as the reason to
select one strategy over another. Evaporation was also cited. In this basin, producers reported
the use of commercial disposal pits, company-owned pits, and evaporation tanks. Both active and
passive evaporation strategies were reported. Active evaporation involves the use of sprays to
enhance the disposal process, while passive evaporation relied on climatic conditions. Some
producers also reported beneficially using CBM water for drilling mix, make up water and hot oil
treatments. None of the producers who responded to the survey reported using surface discharge
in this basin, although one producer said his company had obtained an NPDES permit that
required treating the produced water before discharge. Treatment with a reverse osmosis system
was attempted, but did not achieve the results needed to discharge the water.
Uinta Basin
The Ferron Coal Trend is located in the Uinta Basin in eastern Utah. Coal bed methane
gas producers in this basin reported generating high volumes of water in relationship to the
volume of gas, yet managed to keep their water disposal costs low by utilizing pipelines and
company owned injection wells. Four CBM fields in this basin were examined during the Gas
Research Institute study. These fields are Castlegate, Helper, Drunkards Wash and Buzzard
Bench.
Castlegate Field is located in the north-central portion of Carbon County, Utah. In 2001,
there was one operator producing 17 wells at that field. Those wells yielded approximately
290,000 mcf gas and 546,000 barrels of water. All water at this field is disposed of by pipeline
into a company-owned disposal well.
At the Helper Field, which is also located in Carbon County, Utah, one producer operated
about 99 CBM wells in 2001. These wells yielded approximately 10,000,000 mcf gas and about
3,000,000 barrels of water. The operator at that field reported pumping the produced water via
pipeline to a company-owned disposal well, where it is filtered before injection, and disposed.
Reverse osmosis was attempted at this field but was deemed too expensive and abandoned as a
water management strategy.

Drunkards Wash is also located in the southwestern corner of Carbon County, UT. In
2001, there were three coal bed methane producers operating at this field. Together, they
produced over 400 wells from the Ferron Sandstone Formation, and reported about 78,000,000
mcf gas and 24,000,000 barrels of water. Two of the three producers (who together produced
99% of the water reported) were interviewed by telephone and they reported that all water they
generate is disposed into company-owned injection wells. One of the operators reported that they
do not beneficially use any of the produced water because the quality is too poor. He reported
that the company had tried reverse osmosis to treat the water so that it could be reused, but that it
was too expensive at the time. The other operator also reported using a water gathering system
and reinjection and that they also recycle some of the water for workovers and drilling activities.
Buzzard Bench is located in the northwestern corner of Emery County, Utah. In 2001
there were over fifty actively producing CBM wells that generated about 3,000,000 mcf gas and
2,000,000 barrels of water. Although two operators reported production at this field, one of them
generated almost 100% of the water. That producer was interviewed by telephone and reported
that all water is conveyed by pipeline to company-owned injection wells.
Green River Basin
Coalbed methane exploration and development is new to southwestern Wyoming, with
few wells actively producing at this time. The following information provides a brief summary of
the scope of the development and the associated proposed water management plans.
The Lower Bush Creek Coal Bed Methane Exploratory Pilot Project was proposed to the
BLM by Kennedy Oil in February 2002. They anticipated drilling 20 exploratory CBM wells in
the Green River Basin to test the commercial coalbed methane production potential of the Big
Red coal seam. Their water management strategy involved the development of a pipeline system
that would convey the water to two disposal wells.
The Hay Reservoir Coalbed Natural Gas Pilot Project was proposed to the BLM by
Kennedy Oil in September 2003. They proposed construction, drilling, completion and
production of eight CBM wells in the Green River Basin. According to their proposed water
management plan, produced water generated from these CBM wells will be disposed into an
injection well that will also be drilled on the site.
The Pappy Draw Exploratory Coalbed Natural Gas Project was proposed to the BLM by
Patina Oil and Gas Corporation in July 2002. Patina proposed drilling 15 exploratory wells that
would be located in the Green River Basin. The pilot project is designed to identify several
features of the coal including the volume of water and the de-watering characteristic of the coal.
The data generated during the pilot will be used to determine the economics of the project and the
produced water disposal method. At the time the scoping notice was issued, Patina was exploring
several water management strategies.

The Atlantic Rim Coalbed Methane Project was proposed to the BLM in February 2000
by Stone and Wolf, LLC and involved exploring and potentially developing 96 coalbed wells in
the Green River Basin. Their plan involved drilling the wells in three areas to determine if the
coals were gas productive, if they could be drilled economically, if dewatering of the coals could
be achieved, and what depths or pressure windows would result in the most economic gas
production. During the preparation of the Environmental Assessment, Stone and Wolf, LLC sold
their operating rights to Petroleum Development Corporation and in may 2001, Petroleum
Development Corporation withdrew its application for the 96 well project and submitted a new
proposal for the development of potentially 3880 CBM wells, which would be located north of
the original well site. They anticipated the use of water gathering systems that would convey the
water to an off-channel reservoir.
Hanna Basin
The Seminoe Road Gas Development Project was proposed to the BLM by Dudley and
Associates, LLC. In 2001, 16 production wells were drilled to determine the commercial
feasibility of the site, and in September 2002, a project expansion was proposed that would
include the drilling and development of up to 1240 wells along with the construction of
associated facilities, which included water collection pipelines and a water disposal system.
Water produced from the coalbed methane wells will be transported by pipeline to a reservoir,
where it will be treated (if needed), then discharged under an NPDES permit.
The Hanna Draw Coalbed Methane Exploration Project was proposed to the BLM by
Williams Production RMT Company and was approved in June 2002. The project is located in
the Hanna Basin and includes the development of 25 CBM wells. Produced water from these
wells will be transported by pipeline to a reservoir for evaporation.
LOCATION SPECIFIC PARAMETERS AFFECTING
BENEFICIAL USE OF PRODUCED WATER
Produced water management is often complex. The first rule that must be accepted in
produced water management is that the optimum water management strategy is site- or locationspecific.
The volume of water produced from a well, the chemical composition or quality of the
produced water, the produced water temperature and the geographic location are all important in
determining potential beneficial uses of the produced water. In addition, these data are also
required for determining if water treatment will be necessary for the selected beneficial use.
The quantity of water produced from a well can vary from nothing to thousands of barrels
each day. The quantity of water produced must be sufficient to meet the needs of the selected
beneficial use and if treatment is required the quantity must be sufficient to justify the expenses
associated with treatment. Similarly, the quality of the water can vary from potable to toxic.
Coal bed natural gas produced waters can contain organic compounds, heavy metals, and salts.
Cost-effective treatment of this water is difficult because each constituent presents a unique

problem and the combination of constituents complicates the treatment. The water quality required
for a particular beneficial use must be attainable without water treatment or within a reasonable
water treatment cost. The temperature of the produced water can also vary significantly from
location to location. The potential use of produced water to provide needed heating or cooling
should not be overlooked. In addition, the location where the water is produced must be considered
in determining the potential beneficial uses. Not only will the amount of rainfall a climate receives
annually impact the value of specific beneficial uses, the types of industries in the area, population
density, and environmental regulations will also impact the selection of a beneficial use.
STAKEHOLDERS AND BENEFICIAL USE
OF PRODUCED WATER
Any individual, or groups of individuals, who have a legitimate interest in a particular
aspect of the energy development can be considered stakeholders. In this paper, three general
levels of stakeholder involvement are considered. The primary level of stakeholder involvement
includes those who profit directly as a result of producing the resource (“producers”). These
producers are owners of the rights to the resources being produced and those involved directly in
the production of the resource. The next level of stakeholder involvement includes those whose
property and/or quality of life are directly affected by the production of the resource
(“landowners”). Owners of surface, timber, other mineral resources and water rights in the area
impacted by the development are considered landowners. The final level of stakeholder
involvement considered includes the general population (the public) who may be affected directly
or indirectly by the development of the resource.
The relationships among stakeholders often become very complex and interconnected.
Consider a federal oil and gas lease as an example. In such a case, the federal government would
be a stakeholder involved at each level defined above. Also, it is not uncommon for the
landowner to be a stakeholder at each level. However, there is a clear hierarchy among these
levels when making produced water management decisions:
The producer is clearly the decision maker. The producers have the most at stake and
also have the budget and responsibility for the financial success of the development. The
producer’s main objective is also clear -- to maximize the profit from the energy development.
The involvement of the landowners in making produced water management decisions is
limited. The main objective of the landowner is to protect and possibly increase the value of their
resources, i.e. the land surface, timber, other minerals and/or water. Landowners are generally
not financially involved with produced water management decisions and this is the limitation.
However, legal systems designed to protect property exist in both Canada and the USA. The
threat of litigation provides the landowners with some leverage to have their input seriously
considered when produced water management decisions are made.

The involvement of the public in making produced water management decisions for an
energy development is restricted. Regulation of energy development is in-place and very difficult
to change while an energy development project is in progress. The objectives of the general
public in energy development are often to protect public resources and preserve their quality of
life. When development occurs on public lands, the National Environmental Policy Act requires
input from the general public be heard during the permitting process but if regulations are strictly
adhered to by the producers, it is difficult for the general public to alter produced water
management decisions.
CURRENT PRODUCED WATER
BENEFICIAL USE PRACTICES
A survey of produced water management practices in ten oil and gas producing states in
the USA was recently completed (Boysen, et. al., 12/2002). In this survey, approximately 250
production and environmental personnel from oil and natural gas producing companies were
contacted to provide information regarding produced water management practices they applied.
Most respondents did not attempt any beneficial use of the produced water but a significant
number of respondents did beneficially use at least a portion of their produced water. Survey
respondents reported the following beneficial uses of produced waters:
Secondary oil recovery or “water flooding” was by far the most often reported beneficial
use of produced water. Water flooding for secondary oil recovery is an economically and
environmentally synergistic beneficial use of produced water. In water flooding for secondary oil
recovery, produced water is re-injected into the oil-producing zone to displace oil remaining in
the ground. The end results are that additional oil is recovered from the resource, produced water
management costs are greatly reduced, and the produced water is disposed of underground in
geologic strata with similar hydrochemistry. This beneficial use has a favorable impact on
production economics with minimal potential for environmental impact. Application of this
beneficial use option is restrictive in that it requires a specific set of location properties exist.
Water flooding for pressure maintenance in natural gas reservoirs was another reported beneficial
use of produced water. This situation is similar to water flooding for secondary oil recovery. It is
very synergistic in that it application improves production economics, is environmentally
friendly, and its use is restricted to locations with very specific properties.
Tertiary oil recovery or “steam flooding” was also reported as a beneficial use of
produced water. Steam flooding for tertiary oil recovery like water flooding is a synergistic
approach to produced water management. In steam flooding, steam is injected into the oilproducing
zone to both reduce the viscosity of residual oil and displace the residual oil remaining
underground. Again, this beneficial use has a favorable impact on production economics with
minimal potential for environmental impact. However, the application of this beneficial use
option not only requires that a specific set of location properties exist, it is also very dependent on
water quantity and quality.

Several respondents reported using produced water for preparation of drilling fluids.
This beneficial use has a favorable impact on production economics with minimal potential for
environmental impact. However, application of this beneficial use is only a temporary solution.
Applications are obviously restricted to fields with active drilling programs and limited to the
duration of the drilling programs. Other respondents reported using produced water for well
stimulation and work over. Again, this beneficial use has a favorable impact on production
economics. The potential for environmental impact is low. Application of this beneficial use is
long-term but the volumes of water required are limited.
Dust abatement and compaction were also reported beneficial uses of the produced water.
This beneficial use has a favorable impact on production economics and its potential for
environmental impact is very dependent on water quality. However, application of this beneficial
use is only a temporary solution. Again, applications are restricted to fields with active drilling
programs and limited to the duration of the drilling programs. One respondent reported using
produced water for road spray. Again, this beneficial use has a favorable impact on production
economics and its potential for environmental impact is dependent on water quality. Application
of this beneficial use is long-term but the volumes of water required are limited.
Many respondents with CBM leases in the Rocky Mountains reported using produced
water for livestock. This beneficial use’s favorable impact on production economics is from
avoidance of produced water transportation and disposal costs. Its potential for environmental
impact is low but its application is dependent on water quality. The application is restricted to
areas where livestock are produced and requires cooperation between stakeholders: the producer
and landowner.
Several respondents reported using produced water for land application and/or irrigation.
This beneficial use’s favorable impact on production economics is also from avoidance of
produced water transportation and disposal costs. Its potential for environmental impact is very
dependent on water quality. The application is restricted to areas where crops are produced and
requires cooperation between stakeholders: the producer and landowner.
One respondent reported using produced water for aquifer recharge. Again, this
beneficial use’s favorable impact on production economics is from avoidance of produced water
transportation and disposal costs. This beneficial use has a potential for environmental impact that
is dependent on water quality. Application of this beneficial use is long-term but requires very
specific location properties and water quality. Successful application of this produced water
management technique requires cooperation between all levels of stakeholders: producer,
landowner, and the public.

IMPACT OF LOCATION-SPECIFIC PROPERTIES
ON PRODUCED WATER MANAGEMENT
DECISION MAKING
All of the ten currently applied beneficial uses of produced water reported in the survey
are location-specific and require that certain conditions exist for successful application. Four of
the reported practices require very specific hydrologic and geologic subsurface conditions. Six of
the reported practices require reasonably high quality water and an additional two require water
quality above some minimum standard. In summary, the successful beneficial use of produced
water must first consider location specific conditions. Location-specific conditions are like the
hand dealt in a card game. The role of producers, when considering location-specific conditions
in making produced water management decisions, is to determine what beneficial use options are
potentially applicable.
IMPACT OF THE STAKEHOLDER HIERARCHY
ON PRODUCED WATER MANAGEMENT
DECISION MAKING
It is clear from the survey data that all currently applied beneficial uses of produced water
economically benefit the producer. This is how it should be. Producers have a fiduciary
responsibility to partners and/or stockholders. While intuitively obvious, this is important for
other stakeholders to remember. The producer is the primary decision maker with the budget
authority. Also evident, though not as obvious, is that seven of the ten reported beneficial use
practices applied require only stakeholder involvement at the producer level. Successful
application becomes more difficult when beneficial use of produced water requires involvement
from more than one level of stakeholder.
CONCLUSIONS
In the produced water management decision making process, environmental regulation
exists to protect the interest of all levels of stakeholders. In an energy development project,
regulations and location-specific properties are reviewed at the producer level to determine what
produced water management options are potentially technically viable for the location. The
producer determines the costs of each potential produced water management option and the most
economic option is considered. If the selected produced water management option involves other
levels of stakeholders, the cost to the producer of this stakeholder involvement is assessed and the
potential for litigation is estimated. The producer then selects what is believed to be the most
economic, technically viable, produced water management option with minimum potential for
litigation.

The following conclusions are drawn regarding produced water management decisions.
Environmental regulations dictate allowable produced water management options. Locationspecific
properties determine what allowable produced water management options are technically
feasible. The producer determines the produced water management option selected. Production
economics determine the selection of the produced water management option. External pressures
from other levels of stakeholders can influence this decision by introducing the cost of potential
litigation into the economics. There is no current incentive to the producer beyond economics for
beneficial use of produced water. Beneficial use of produced water that involves more than one
level of stakeholder is difficult.
This understanding of the process of how produced water management decisions are
made provides insight into currently applied beneficial use processes and also into how to
increase beneficial use in the future. All survey respondents reporting that they beneficially use
produced water benefit directly from the use. The most broadly applied beneficial uses of
produced water are those that involve stakeholders only at the producer level. The survey data
illustrate that efforts to increase these types of beneficial uses of produced water are not
necessary. It will occur when possible. Future efforts to increase beneficial use of produced
water should be directed at beneficial use of produced water by levels of stakeholders other than
the producer. Some type of financial incentive to promote beneficial use of produced water
should be made available to both the producer and the end user of the water.
REFERENCE
Boysen, J.A., D.B. Boysen, R.E. Boysen and T. Larson, “Produced Water Atlas Series,” Gas
Research Institute Publication #03-0072, Chicago, IL (2002).