Steamboat Pilot & Today

Routt County — Phillips Petroleum Company has a $3 million bet on the table that Routt County has enough methane gas in its coal beds to make the gamble worth it.
The oil giant's representatives went before the board of commissioners Monday to explain how they're drilling four test wells about 10 miles northeast of Hayden.
"If it's successful, we want to develop the coal bed out there and drill some more wells and put it into a gas pipeline," said Jonathan Schultz, a Phillips Operations and Development manager.
Schultz said there's no guarantee the test wells will produce natural gas. He said the oil company's $3 million investment is par for the course.
"That's typical for a big oil company, that's our business risking this kind of money," Schultz said.
The four Hayden-area wells have been drilled and are now pumping water. Water is the first thing that usually comes out of these wells, Schultz said. The water is being released in a drainage ditch that flows into the Elkhead River.
"Over time, gas is expected to start flowing," he said. Along with the gas, water continues to flow but is separated.
It could take up to two years to know if gas will come out in "commercial quantities," Schultz said.
The gas wells are located on the property of Mike Flanders near the Dry Fork of the Elkhead.
Commissioner Dan Ellison said he asked Phillips to make a presentation because of concerns about elk herds and how water will be affected in that area.
Phillips Environmental Specialist J. Stephen de Albuquerque said they're conducting tests on the local springs, creeks and ponds within a mile radius to monitor any effects. No wells were in the near vicinity, but Phillips officials said they will keep close tabs on neighbors.
"If there is a natural gas seep in someone's well caused by our operations, we're 100 percent responsible for that," de Albuquerque said.
Coal bed methane gas production has been controversial in some areas including southwestern Colorado, where the Bureau of Land Management has been studying its effects in the San Juan Basin.
A December 1999 Environmental Observation paper by the BLM warns of "environmental problems associated with coal bed methane production" in the San Juan Basin.
The study says as methane production progressed, some residents noticed an "increase in the occurrence of methane in their domestic water wells, gas seeps in pastures, manifested by dead vegetation." The BLM study also said that "five homes were ultimately removed from the hazardous area" near an outcropping of the Fruitland Formation coal beds.
De Albuquerque said many of the problems found in the San Juan Basin were due to the geological outcropping of that particular area of the coal bed.
"Wells that are drilled close to the coal bed outcrop may have contributed to the release of gas," de Albuquerque said.
But de Albuquerque said the area that Phillips is drilling near the Dry Fork of the Elkhead has no such outcroppings of coal.
De Albuquerque also said there was gas seepage that naturally occurred in southwest Colorado, as it does in many places. He said the same thing is occurring right now in Routt County.
"There are natural methane seeps on the Little Snake River and Tow Creek oil field just west of Steamboat," he said.
There is also the issue of where the water goes that is pumped out of some coal bed methane wells.
"The landowner has the first rights to the water, and if it's pumped into the river, anyone can file on it," said de Albuquerque. The water being pumped out of the Hayden-area wells has tested cleaner than some bottled waters, de Albuquerque said. If gas is finally produced in the necessary quantities, Phillips Petroleum would then go to the county Planning Commission to get a Special Use Permit to lay pipelines.

To reach Frances Hohl call 871-4208 or e-mail fhohl@amigo.net