Steamboat Springs Editor's note: This story had been updated to correct a quote from Routt County Planning Commission member John Ayer.
The Routt County Planning Commission voted, 7-2, on Thursday night to recommend approval of a permit for Quicksilver Resource’s second exploratory oil well on Wolf Mountain about six miles northeast of Hayden.
The permit application next goes to the Routt County Board of Commissioners at 5:30 p.m. March 12 for a possible final decision.
The vote came at the end of a 3 1/2-hour hearing including 90 minutes of comment from the public with roughly equal numbers of people expressing their support or opposition for the proposed well.
In the end, Planning Commissioner John Ayer moved to send the application on to the next level, saying he felt the combination of Colorado Oil and Gas Conservation Commission regulations and the county’s conditions of approval were adequate to protect the public interest. He added that he thinks unusually robust conditions in the surface rights agreement that Wolf Mountain Ranch owner Bob Waltrip negotiated with Quicksilver provide county residents with even more assurances.
Ayer said he thought it was premature to place the burden of remedying social issues, such as impacts on public schools and the need for basin-wide air-quality testing, on Quicksilver.
“We do look at cumulative effects in our planning regulations. The trigger is not there,” Ayer said while making the motion to approve. “The full weight should not fall on a single operator for a single well. If we approve this, it will be with the belief we have adequate mitigation for this one well at this one location.”
Planning Commissioners Andy Benjamin and Sandi Gibson cast the dissenting votes.
Benjamin said that he thought Quicksilver would prove to be a good operator but that he could not reconcile himself to the well’s location.
“The proximity of the well to the Yampa River makes it not a good location for an oil well,” Benjamin said.
The well is about a mile from Quicksilver’s first well, which it acquired from another company in 2011. The Yampa flows close to the road just downstream from the U.S. Highway 40 bridge near the base of the hill.
Planning Commissioner Alan Goldich had offered an amendment that would have required Quicksilver to carry out baseline air-quality testing in the vicinity of the well, which also is close to the Hayden Station power plant, but Ayer did not accept it.
Gibson agreed with Goldich and added that she was not in favor of Quicksilver’s request to carry out the drilling process in two phases.
Quicksilver originally had planned to seek a permit for the Camilletti well it plans west of Milner; however, it asked to have that permit application tabled and instead sought Routt County Planning Department Director Chad Phillips’ approval to advance the second well permit application on Wolf Mountain. The change was made in order for Quicksilver to live up to continuous drilling terms contained in its lease with Waltrip.
The first phase would be drilled to a depth of 1,200 feet using a 60-foot surface rig. Quicksilver expects that phase to begin by March 22, pending issuance of permits. The company plans to complete the first phase by March 31. After that, the operation would shut down for the balance of the sage grouse mating and chick-rearing season.
The first phase of the new well would use water-based fluids and no fracking is involved, according to documents at the planning department. Surface casing also would be set and cemented in the first phase.
Quicksilver Senior Director of Government and Community Affairs Steve Lindsey said the casing is critical to protecting groundwater.
“We have a robust casing and cementing program to ensure the integrity of the well bore over the life of the well,” Lindsey said. “We are always required to submit a cement bond log back to the state to assure it was done to their standards.”
After the initial drilling, the rig would be removed from the site.
The final drilling operations are proposed to begin in August, beyond the July 30 end of grouse restrictions. A conventional rotary drill about 160 to 165 feet tall would complete the vertical drilling process.
Lindsey said Quicksilver will cooperate with the Oil and Gas Commission’s voluntary baseline water-quality testing program at the new well.
Lindsey said his company is leaning toward using a gas fracking process on the second well as it did on the first.
A sampling of public comments includes:
Steamboat resident Steve Lewis said, “I’d like to take advantage of the resources in Routt County, but I’d like to make sure we don’t get hurt, as well. I do feel like we should be careful. I’d like to partner with Quicksilver, but I’d like to do it when we know what we’re doing. The real issue is well casing failures below grade.” The reason is unknown, “but there’s a study under way, and we should” wait for the results of the study.
Tom Maneotis, of Oak Creek, said that Quicksilver had been more than fair with him in their business dealings and that he thinks Routt County needs the tax revenue that energy development could generate.
“I’m concerned about the state of the county,” Maneotis said. With energy development, “severance taxes to the county could quadruple.
“I was one of the first landowners that probably leased my minerals to them. Subsequently down the road, the (value) of leases went up.” Quicksilver’s landman “came to visit and said the mineral leasing price went up and you only got half of what everybody else is getting. We’re going to make you equal.”
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com