Petition Comments

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Colorado River District
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Protecting Western Colorado Water Since 1937
Dick Wolfe, State Engineer
Colorado Division of Water Resources
1313 Sherman Street, Rm. 318
Denver, CO 80203
Via E-mail and
Federal Express
--....."
jill
I
III
May 13, 2010
Re:
EOG Resources, Inc.'s Petition for determination ofNontributary Ground Water in the
Niobrara Formation of the North Park Structural Basin, Grand and Jackson Counties
Dear Mr. Wolfe:
This letter, and the accompanying letter report from Bishop-Brogden Associates ("BBA
Report"), are the Colorado River Water Conservation District ("River District") and Middle Park
Water Conservancy District's ("Middle Park District") (referred to collectively as the
"Districts") initial response to the petition filed by EOG Resources, Inc. ("EOG"). EOG is
seeking nontributary determinations for its six oil and gas wells located in Township 7 North,
Range 80 West as well as the entire geographically delineated area ofthe Niobrara Formation in
the North Park Structural Basin. EOG's petition was filed pursuant to Rule 17.s.B.1 of the
Produced Nontributary Ground Water Rules, 2 CCR 402-17 ("Produced NT Rules"). In support
of its Petition EOG submitted a technical report prepared by Leonard Rice Engineers, Inc. I
The area sought to be determined nontributary is a forty by sixty square mile area located
in Jackson and Grand Counties. Both Districts' boundaries encompass all of Grand County. The
Districts own vested water rights in Grand County including but not limited to water rights or
contractual interests in Wolford Mountain Reservoir. EOG's petition seeks a determination that
water produced from the Niobrara Formation, including a portion of the formation immediately
adjacent to Wolford Mountain Reservoir in Grand County is nontributary. Any erroneous
determination regarding the tributary nature of water produced from the Niobrara Formation
would, as a matter of law, be injurious to the Districts and its constituents vested water rights.
The Districts have the following legal and technical concerns with the EOG petition.
1.
The Applicant has provided no evidence in support of a nontributary
determination in Grand County.
I The Report appears to have been signed on March 8, 2010 but Figures 1, 2, and 4 of the Report appear to have
been generated in March of 2009 begging the question why EOG did not submit this petition as part of the
Nontributary rulemaking conducted by the State Engineer in December of2009 and January of2010.
201 Centennial Street! PO Box 1120 • Glenwood Springs, CO 81602
(970) 945-8522 • (970) 945-8799 Fax
www.ColoradoRiverDistrict.org
Dick Wo lfe, State Engineer
Colorado Division of Water Resources
May 13,2010
Page 2
As more thoroughly described in the BBA Report, attached hereto and incorporated by
this reference, all of the hydraulic conductivity data in support of the petition is derived from
areas outside of Grand County. This is significant as the Niobrara Formation in question
straddles the continental divide and by the applicant's engineer's own admission permeability
numbers vary within the formation based on the structural geology.
The State Engineer must deny the petition for determination of nontributary ground water
as it relates to Grand County because EOG has failed to provide any information that would
substantiate such a determination.
Additionally, the Produced NT Rules allow an operator or group of operators to seek a
nontributary determination for "an existing well or group of wells, or for a well or wells to be
constructed .... " Rule l7.5.A. Rule 17.5.A.1 requires that the petitioner provide information that
establishes that water in the proposed area "will be withdrawn to facilitate or permit the mining
of minerals." Rule 17.5.A.2 requires the Petitioner to identifY "whether such wells have been
constructed or are proposed to be constructed." EOG has failed to provide any information
related to present or future well development in Grand County. EOG's petition is deficient as it
fails to provide the information required by Rule 17.5 for any nontributary determination for any
wells other than the six wells referenced in the petition.
2.
A determination that the delineated areas ofthe Niobrara Formation are producing
nontributary ground water requires an amendment to the Produced NT Rules.
Any designation of the delineated forty by sixty square mile Niobrara Formation, as
requested by EOG, constitutes an amendment to Rule 17.7.D. of the Produced NT Rules ("Rule
17.7.D. identifies geographically delineated areas under which the ground water in only certain
formations is nontributary for the limited purposes of the Rules") and cannot be accomplished by
EOG's Rule 17.5 Petition.
The procedure for obtaining a State Engineer determination of produced nontributary
ground water is provided at Rule 17.5 ofthe Produced NT Rules. Rule 17.5 makes clear that the
rules may be amended to identifY additional areas within the state where the State Engineer shall
regard produced water as nontributary ("basin specific rules"). The Produced NT Rules also
provide for adjudicatory proceedings by which the State Engineer may make nontributary
determinations for permitting purposes pursuant to §37-90-137(7). However, the Produced NT
Rules limit the circumstances when an adjudication is appropriate to when an "Operator or group
of Operators [is] seeking a nontributary determination for Produced Water withdrawn from an
existing well or group of wells, or for a well or wells to be constructed in one or more geologic
formations within a geographically delineated area ... " Rule 17.5.A. (emphasis added).
Colorado law recognizes the difference between an agency acting in its rulemaking
capacity and an agency acting in its adjudicatory capacity. Co lorado's AP A defmes a "rule" as
"the whole or any part of every agency statement of general applicability and future effect
implementing, interpreting, or declaring law or policy .... " §24-4-102(15), C.R.S. (emphasis
added). "Rulemaking does not involve the application of [a] policy to any specific person."
Dick Wolfe, State Engineer
Colorado Division of Water Resources
May 13, 2010
Page 3
Colorado Ground Water Commission v. Eagle Park Farms, Ltd. 919 P.2d 212,217 (Colo. 1996)
(internal citation omitted). "In contrast, an adjudication 'involves a determination of rights,
duties, or obligations of identifiable parties by applying existing legal standards to facts
developed at a hearing conducted for the purpose of resolving the particular interests in
question." Trans Shuttle, Inc., v. Public Utilities Commission, 89 P.3d 398, 408 (Colo. 2004)
(emphasis added), see also, Eagle Park Farms, 919 P.2d at 217.
The only wells identified in the EOG petition, and thus the only wells subject to a
determination pursuant to the State Engineer's adjudicatory authority under rules, are the six
existing wells located in Jackson County. Any determination by the State Engineer regarding the
delineated portion of the Niobrara Formation as a whole is premature at best,2 and if appropriate
at all, would constitute a "statement of general applicability and future affect" reqmrmg an
amendment-- after appropriate notice-- to the Produced NT Rules.
This matter was not noticed as a rulemaking or set for a hearing in accordance with the
Colorado Administrative Procedures Act, §§ 24-4-103 et seq. and the State Engineer's
Procedural Regulations 2 CCR 402-5. EOG's petition for a determination ofnontributary ground
water for the delineated Niobrara Formation, other than a determination of EOG's six existing
wells, must be denied.
Additionally, the Districts have a number of technical concerns, identified in the BBA
Report, which must be addressed prior to any determination by the State Engineer. The Districts
reserve their right to request a hearing after the initial determination of the State Engineer
pursuant to Rule 17.5.C.2. Should you have any questions please do not hesitate to contact me,
St Cazier, or Christopher Sanchez at Bishop-Brogde Associates.
.....
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v. Turner, Associate Counsel
ado River District
ancy District
Enclosure
CC:
Kenneth A. Wonstolen, Esq. (via email)
David C. Taussig, Esq. (via email)
Barbara A. Green, Esq. (via email)
As discussed in the comments submitted by Grand County and NWCCOG it appears that oil and gas development
in Grand County is highly speculative at this point. Moreover, it appears that the EOG Petition includes lands that
have specifically been withdrawn by the Federal Agencies from oil and gas leasing. It is impossible to imagine how
a nontributary determination for areas removed from oil and gas leasing or areas which have no current oil and gas
development would assist the State Engineer in his administration and well permitting duties as authorized by the
legislature in section 37-90-137(7).
2