Regulatory Background and Water Rights Issues
By James L. Jehn[i]
Historically, the Colorado State Engineer (SEO) has considered oil and gas wells to be under the exclusive jurisdiction of the Colorado Oil and Gas Conservation Commission (“COGCC”). Accordingly, the State Engineer has not required oil and gas wells that produce water in the course of oil and gas operations to obtain well permits.
In Vance v. Wolfe, 205 P.3d 1165, 1173 (Colo. 2009), the Supreme Court held that “while the production of oil and gas is subject to extensive regulation by COGCC, it is also subject to the 1969 Act and the Ground Water Act.” Thus, the more than 34,000 existing oil and gas wells that produce ground water in the course of oil and gas operations may also be subject to the water well permitting requirements of the Ground Water Act, and potentially will be required to demonstrate compliance with the appropriate well permitting requirements by April 1, 2010.
As a result of HB-09-1303, which went into effect on July 1, 2009, literally every oil/gas/CBM well that produces water and puts the water to beneficial use will need to prove the water is nontributary (NT), or if not, will need to follow other procedures through the Water Court process to obtain an augmentation plan to offset out-of-priority stream depletions, and possibly a substitute water supply plan approved by the SEO to allow the tributary water to be temporarily produced while the augmentation plan is tracking through the Water Court process.
This paper describes these processes in more detail, summarizes the Rules that govern operators that produce water during oil and gas operations, and addresses water rights related issues.
[i] James L. Jehn is President of Jehn Water Consultants, Inc.,
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