APPENDIX F
Tribal Management of Coalbed Methane Development and Produced Water

Coalbed methane (CBM) development on tribal lands is governed by the Omnibus Indian Mineral Leasing Act of 1938 and the Indian Mineral Development Act of 1982 (see Chapter 3). In a manner similar to that used elsewhere in the report, tribal approaches to CBM production and produced water management were examined in areas where tribal CBM production activity is greatest and/or concerns over CBM produced water are most marked—in the San Juan and Powder River Basins. Examples of differing approaches to CBM development and produced water management by tribal governments are discussed below.

SAN JUAN BASIN

The Southern Ute Indian Tribe (SUIT) in Colorado, and the Navajo Nation and the Jicarilla Apache Nation in New Mexico have various levels of active CBM production on their lands in the San Juan Basin (DOE, 2010), although total CBM production on Navajo and Jicarilla Apache lands in the southern San Juan Basin appears limited at this time (Jones, 2010). In contrast, a significant proportion of the northern San Juan Basin in Colorado lies within SUIT lands. Companies operating on SUIT lands to develop CBM include the Red Willow Production Company, BP America, ConocoPhillips, Chevron Texaco, and XTO. Red Willow is wholly owned by the SUIT and is the main CBM operator on SUIT lands. Information provided to the committee by Red Willow—not on behalf of the SUIT—offers insight as to how CBM produced water is managed under tribal jurisdiction in the San Juan Basin.1

Red Willow operates a total of 414 CBM wells, 180 of which are on a reservation in Colorado. On-reservation wells produce 3,000 barrels of water per day, which represent

1

J.B. Keener, Red Willow Production Company, presentation to the committee, June 2, 2009.



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APPENDIX F Tribal Management of Coalbed Methane Development and Produced Water Coalbed methane (CBM) development on tribal lands is governed by the Omnibus Indian Mineral Leasing Act of 1938 and the Indian Mineral Development Act of 1982 (see Chapter 3). In a manner similar to that used elsewhere in the report, tribal approaches to CBM production and produced water management were examined in areas where tribal CBM production activity is greatest and/or concerns over CBM produced water are most marked—in the San Juan and Powder River Basins. Examples of differing approaches to CBM development and produced water management by tribal governments are discussed below. SAN JUAN BASIN The Southern Ute Indian Tribe (SUIT) in Colorado, and the Navajo Nation and the Jicarilla Apache Nation in New Mexico have various levels of active CBM production on their lands in the San Juan Basin (DOE, 2010), although total CBM production on Navajo and Jicarilla Apache lands in the southern San Juan Basin appears limited at this time ( Jones, 2010). In contrast, a significant proportion of the northern San Juan Basin in Colorado lies within SUIT lands. Companies operating on SUIT lands to develop CBM include the Red Willow Production Company, BP America, ConocoPhillips, Chevron Texaco, and XTO. Red Willow is wholly owned by the SUIT and is the main CBM op- erator on SUIT lands. Information provided to the committee by Red Willow—not on behalf of the SUIT—offers insight as to how CBM produced water is managed under tribal jurisdiction in the San Juan Basin.1 Red Willow operates a total of 414 CBM wells, 180 of which are on a reservation in Colorado. On-reservation wells produce 3,000 barrels of water per day, which represent J.B. Keener, Red Willow Production Company, presentation to the committee, June 2, 2009. 1 

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APPENDIX F approximately 2 percent of the CBM water produced annually in the San Juan Basin.2 The primary produced water management method used by Red Willow is reinjection. An esti- mated 25 percent of the CBM produced water is hauled by truck to a disposal well or facility, where wells inject into deep nonproducing formations 4,600 to 9,500 feet below ground surface. The remaining water is pumped through a network of underground pipes, some extending as far as 10 miles, to be injected into water disposal wells (WDWs). Each well is permitted through the Environmental Protection Agency’s Underground Injection Con- trol Program, and each permit has specific requirements for maximum allowable injection pressure. All permits require annual reporting on volumes disposed, injection pressures, and financial assurance. The Southern Ute Department of Natural Resources Water Resources Division provides for the management, conservation, and use of the tribe’s surface water and groundwater resources. This work includes the installation of water measuring devices, implementation of soil and water conservation projects, protection of existing water rights, acquisition of new water rights, and strategic planning for the continuing development of water resources to benefit the tribal membership.3 Red Willow uses chemical treatments, such as paraffin dispersant, scale inhibitors, biocides, and corrosion inhibitors, to reduce clogging of filters at inlets to disposal wells and to prevent pressure buildup in WDWs (due to plugging with suspended solids). Some of these chemicals may enter the produced water stream; however, they are exempt from regulation under the Resource Conservation Recovery Act, which governs the disposal of hazardous and nonhazardous solid wastes. Red Willow is involved with a project aimed to put CBM water to beneficial use. The SUIT Growth Fund Alternative Energy Group recently partnered with a biofuels company to use small portions (approximately 100 barrels) of Red Willow’s CBM produced water to grow algae, which is converted to oil feedstock that can be refined into diesel fuel. Red Wil- low will dispose of wastewater product from the process. This plan will require modification of a Class II permit to a more rigorous Class I permit. If the pilot project is successful, this industrial process may utilize all of Red Willow’s produced water. POWDER RIVER BASIN At the time of the writing of this report, no CBM production has occurred on the lands of either the Northern Cheyenne or the Crow Tribes in the Powder River Basin of Mon- tana. Although both tribes have taken active steps to examine the possibility of developing CBM on their lands, they do not currently participate in CBM development nor are they involved in CBM produced water disposal. The Crow Tribe, for example, has articulated An estimated 46 million barrels of CBM water was produced in the San Juan Basin in 2008. See Chapter 2, Ta- 2 ble 2.1. See www.southern-ute.nsn.us/DNRWeb/water.htm (accessed April 13, 2010). 3 

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Appendix F environmental concerns with regard to CBM development, including potential effects to water quality and quantity, soil, and biota receiving CBM discharges as the tribe weighs the advantages and disadvantages of potential CBM development on their lands.4 The Northern Cheyenne Tribe has also expressed considerable concern about poten- tial impacts of CBM development and produced water management on water resources of the Tongue River drainage in the Powder River Basin, including CBM development and produced water disposal that occurs outside the boundaries of their lands (e.g. Wo et al., 2004).5 In 2006, the tribe received approval from the Environmental Protection Agency (EPA) to administer Clean Water Act programs and began developing its own surface water quality standards, applicable to the Tongue River and its tributaries within the boundaries of the reservation. Information indicates that in many cases the proposed standards are more stringent than the Montana state standards. The tribe developed these standards in part as a response to industry development of CBM wells on the Wyoming side of the Powder River Basin.6 These standards are presently being reviewed by EPA and the Northern Cheyenne recently received approval from EPA to recirculate their standards for public comment. The Northern Cheyenne have also sided with State of Montana on litigation over Wyoming infringement on Montana water rights and violations of terms of Yellowstone Compact (SCOTUS, 2010). REFERENCES DOE (U.S. Department of Energy). 2010. Atlas of Oil & Gas Plays: Jicarilla Apache Tribe of the Jicarilla Apache Indian Reservation. Tribal Energy Program. Available at www1.eere.energy.gov/tribalenergy/guide/pdfs/jicarilla_apache.pdf (accessed July 15, 2010). Jones, M. 2010. WRAP/IPAMS Phase III Oil and Gas Emissions Inventory Development for the Intermountain West. Presentation to the 2010 San Juan Air Quality Forum, May 6, Durango, CO. Available at www.mountainstudies. org/AQForum2010/May6_MJ_WRAP_inventory.pdf ( July 15, 2010). SCOTUS (Supreme Court of the United States). 2010. State of Montana v. State of Wyoming and State of North Dakota. Motion to Dismiss the Bill of Complaint, Motion for Partial Summary Judgment, and Motion to Intervene. First Interim Report of the Special Master, Barton H. Thompson, Jr. Available at www.supremecourt.gov/SpecMastRpt/ 137Orig_020910.pdf (accessed July 15, 2010). Wo, S., D.L. Lopez, and J. Whiteman, Sr. 2004. Northern Cheyenne Reservation coal bed natural resource assessment and analysis of produced water disposal options. Available at www.inl.gov/technicalpublications/Documents/2906944.pdf (accessed June 23, 2010). See serc.carleton.edu/research_education/nativelands/crow/impacts.html (accessed July 15, 2010). 4 See e.g., www.cheyennenation.com/tribalreport/June/The%20Nation%20page%204.htm (accessed February 2010) 5 and www.osti.gov/bridge/product.biblio.jsp?osti_id=910962 (accessed June 2010). See missoulian.com/news/state-and-regional/article_4566099e-8772-11de-8a85-001cc4c03286.html (accessed July 6 15, 2010). 

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