Statewide policy change on horizontal wells

February 5, 2014

COGCC, Colorado, oil and gas drilling

leaking gas wellsThis week COGCC Executive Director Matt Lepore recommended a statewide policy on the distance between horizontal wells and existing wells. Recent developments regarding the leaking well owned by Maralex Resources, which is located 7 miles southwest of DeBeque, will change the way COGCC engineers evaluate horizontal wells in the Piceance Basin.

The Maralex well is an old vertical well drilled in 1981, and then shut in for whatever reason. During the last BLM inspection of the well on July 9, 2013, no structural damage was noted.

When the leak was first discovered by a “member of the public” on December 14, 2013, fluids had spread beyond the well pad. No one knows how long the well had been leaking. At that time Maralex opened the well and diverted the flow into a containment pit. Tanker trucks pumped out the fluid and hauled it away.

First the well had to be repaired and then a series of plugs were installed last month. On January 17, the leak stopped. The well was permanently plugged a week later. Over the course of the five-week period an average of 6,300 gallons of fluid per day flowed into the containment pit for disposal.

Allegedly no surface water or groundwater was contaminated.

The cause of the leak remains unknown. COGCC and BLM officials have been investigating the possibility that the leak occurred when a nearby horizontal well was fracked. The Black Hills Exploration & Production well pad is located about a mile from the old Maralex well. But when the Black Hills well made a 90-degree turn it came within 400 feet of the Maralex well. The agencies are awaiting further test results and previous test results have thus far been inconclusive.

Horiz-Vert-wellsThe BLM has a webpage Jaw Ridge Natural Gas Leak, but the last time it was updated was January 3.

Because of this fracking mess, COGCC Executive Director Matt Lepore is recommending that a policy in force in the Denver-Julesberg Basin be expanded statewide.

Well problem spurs change in state policy [subscribers only]
Regulators aim to prevent leaks from horizontal drilling

The Colorado Oil and Gas Conservation Commission plans to expand statewide a policy aimed at preventing horizontal wells from causing leaks involving existing wells, due to a leak southwest of De Beque where such a possible link is being investigated …

… The COGCC currently has a policy aimed at preventing what it calls the potential for “communication” between horizontal wells and existing wells in 11 counties in eastern Colorado’s Denver-Julesburg Basin. That area is seeing a boom in horizontal drilling aimed at producing oil and other liquids, in an area with numerous existing vertical wells that in some cases may not have been constructed to withstand modern-day, high-pressure fracture operations nearby.

“It is apparent that that policy needs to be pushed out statewide. It needs to be pushed out statewide very quickly,” COGCC director Matt Lepore told the commission at its last meeting.

The policy requires the COGCC engineer to evaluate all wells within 1,500 feet of a proposed horizontal wellbore to determine whether the existing wells have adequate cement sealing around them to isolate the geological formation to be fractured, as well as all groundwater zones. Also to be evaluated is whether an existing well’s wellhead and master valve are rated to 5,000 pounds per square inch of pressure, or alternatively that there is adequate mechanical isolation down the well.

If concerns exist regarding an existing well, the company proposing the horizontal well must take measures that can range from doing remedial cement work in the existing well to isolate all formations, to properly plugging it, to replugging it if needed or proposing alternative mitigation.

An existing well’s owner cannot refuse to let mitigation work occur.

The COGCC initially implemented the policy for horizontal wells coming within 300 feet of existing wells. It eventually expanded the distance after pressure readings and other data collected at existing wells during fracking of new ones indicated a need to do so.

Lepore told the commission one concern companies have is the lack of data that would justify the 1,500-foot-distance standard in the case of wells outside the DJ Basin. He also noted that there are currently few plans to drill horizontal wells elsewhere in the state. Companies have been drilling a small number of such wells for exploratory purposes in the Piceance Basin.

LEAK THEORY INVESTIGATED

The Maralex well was drilled into the Dakota sandstone formation, while the Black Hills well targeted the Niobrara shale, part of the shallower Mancos formation. The COGCC says the Maralex well wasn’t cemented to isolate the Niobrara zone because that zone wasn’t considered a producing formation when the well was drilled. It’s looking at whether gas liberated from fracking the Black Hills well reached the Maralex well, pushing gas and water to the surface.

Bruce Baizel, energy program director with the Earthworks conservation group, has said another concern in horizontal drilling is that it may occur around older existing wells that may have corroded pipes or cement sealing that has weakened over time and can’t stand up to fracking pressures …

… [BLM spokesman Steven Hall said the agency] is reviewing how it manages horizontal drilling and fracking on federal land in the state. The agency has no rules or policies addressing potential communication between horizontal and existing wells. But Hall said it has a lot of leeway during the process of reviewing drilling permit applications to impose conditions to try to avoid such situations.

In addition, it is working to deal with the situation of wells that are shut in for a long time, to make sure they are permanently plugged, put into production, or tested to ensure their integrity.

“We’re going to try to be very aggressive in addressing those,” Hall said.

The agency previously has said that of 110 wells Maralex owns that involve federal lands or minerals in western Colorado, 86 are shut-in — in nearly half those cases for more than 20 years. It has met with Maralex about coming up with a strategy for addressing its shut-in wells.

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