Groups appeal plan to pump oilfield waste into aquifer

Conservation groups are challenging Wyoming’s approval of an energy company’s plan to inject oilfield waste into an underground aquifer, telling federal regulators the state plan fails to meet Clean Water Act requirements.

The Powder River Basin Resource Council, Wyoming Outdoor Council and Natural Resources Defense Council say Wyoming relied on flawed economic analyses by Aethon Energy, the company seeking the permit to inject “produced water” from the Moneta Divide oil and gas field mainly into the 15,000-foot deep Madison Formation. Representatives from the groups wrote the U.S. Environmental Protection Agency, which will review Wyoming’s decision, asking it to consider their new economic analysis that shows the aquifer could be developed for domestic use.

“[T]he law prohibits the injection of oil and gas wastewater into potential drinking water supplies,” the groups wrote the EPA, “and the applicant must demonstrate that the aquifer cannot now and will [not] in the future serve as a source of drinking water.” An economic consultant for the conservationists found that domestic development of the Madison Aquifer in question “is both economic and technologically practical,” the groups’ April 8 letter reads.

Climate change, the specter of water shortages in an increasingly arid West, uncertainties about existing regional shallow- and surface-water supplies and evolving technologies that will make deep aquifers more accessible all challenge Aethon’s contention that the Madison couldn’t be developed for potable water, the groups said in their challenge.

Aethon requests an exemption to the Clean Water Act, the 1972 law that’s the principal legislation governing water pollution.

Aethon would use the disposal well, known as the Marlin Well and located about 30 miles southeast of Shoshoni, to inject up to 1.26 million gallons (30,000 barrels) a day of polluted water underground, most of it into the 15,000-foot deep Madison Aquifer. Encana, an earlier owner of the Moneta Divide Field, drilled the well for disposal but it has not been used.

The letter and associated documents challenge the Wyoming Oil and Gas Conservation Commission’s November 2020 decision to approve Aethon’s injection request.

Although the WOGCC voted 4-1 to approve the injection five months ago, chairman Gov. Mark Gordon has yet to sign the official permissive order, said Tom Kropatsch, the commission’s deputy oil and gas supervisor. It’s “fairly common” that orders take some time, he wrote in an email, because of “the often-complicated nature of the applications and common requests for supplemental information,” among other reasons.

When assembled, the Wyoming record will be sent to the EPA for its review, he said. The federal regulatory agency, which oversees Wyoming’s enforcement of the federal Clean Water Act, can concur, or presumably disagree, with the state decision.

Injection could be approved only after the EPA reviews Aethon’s application, supplemental information, public comments and Wyoming’s order, Kropatsch wrote.

Disposal of up to 1.26 million gallons a day in the Marlin Well would go a small way toward resolving how to safely get rid of wastewater from the Moneta Divide Field. Aethon would have to dispose of up to 58.8 million gallons of produced water a day when the field is in full production, the U.S. Bureau of Land Management said last year when it approved expanding Moneta Divide by 4,250 oil and gas wells.

The WOGCC’s 4-1 decision in November came with a strong dissent from State Geologist and commission member Erin Campbell, who called the venture “a gamble I don’t feel comfortable taking.

“Do we want to risk contaminating a viable aquifer?” she asked fellow commissioners.

Aethon argued that the aquifer itself was tainted and that development for domestic use would be economically infeasible. The closest communities — including Casper — have ample sources now and will continue to be able to meet their needs, representatives for the Texas developers said.

Casper, for example, is using 37% of its existing domestic water supply and could expand current production at minimal expense. In contrast, using the Marlin Well would cost the city $8.72 million, Aethon wrote in papers submitted to the WOGCC.

Aethon made similar cases for Shoshoni, Riverton and Thermopolis citing costs of $4 million, $6.6 million and $6.4 million respectively. An Aethon consultant told the state regulatory commission the Marlin Well or similar Madison Formation wells would cost consumers six to 20 times more than other sources.

Conservationists employed economic consultants Robert and Karen Raucher “after seeing and hearing the additional testimony and exhibits” at the WOGCC hearing, they wrote the EPA.

Aethon failed to prove its case, in part because the company’s information was “very limited and improperly interpreted,” the Rauchers wrote. “Our analysis reveals there is considerable value in, and a reasonable cost for using the aquifer to address a wide array of near-term and potential future water needs across a wide geographic area,” the consultants wrote in a 37-page report.

Aethon did not respond to a request for comment.

Using Aethon’s own data, the conservation groups’ consultants estimated development of the Madison Aquifer for domestic use could be “very economical, costing an estimated $134 or less per household per year. They criticized Aethon’s analysis for not being “robust,” having a limited geographic scope and inappropriately mixing one-time and annual costs.

Regional water systems could exploit the aquifer, including at Pavillion, where water is already tainted from oil and gas development, the consultants wrote. Thermopolis too, where the town draws drinking water from the Bighorn River, could benefit from the Madison.

Such shallow-well and surface water systems are subject to climate variations, including wildfire, and not as reliable as a deep aquifer, the consultants wrote.

Aethon sought, but was not granted, a permit to dump millions of gallons a day of tainted water and thousands of tons a month of solids into drainages above Thermopolis.

The aquifer needs to be evaluated in the context of the arid West, including in the adjacent Colorado River Basin where drought could cut Wyoming’s traditional supplies, the Rauchers wrote. Already Wyoming has appropriated more than $1 million for cloud seeding in the Wind River Range as a hedge against Colorado River drought.

“Water anywhere in proximity of the Colorado River Basin has value,” the Raucher’s report states, and the Madison Aquifer could be an “economically valuable hedge” against risks.

Produced water, with some treatment, is used to safely irrigate crops in California, the consultants wrote, and should not be discarded in Wyoming, especially into drinking water sources. “Allowing the produced water to be considered as a ‘waste’ — and also enabling the gas company to dispose of that waste in a manner that puts an essential and valuable future water resource at risk — reflects a clear misalignment of economic values,” the report states.

Expansion of the Moneta Divide Field would bring $71 million in federal royalties, $57.6 million in state revenue and $70 million in county tax revenue annually, the U.S. Bureau of Land Management said in approving Moneta Divide expansion. The BLM approval did not resolve the water disposal question, leaving that issue to state regulators and now the EPA.

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