Williams oil well near Hayden back in the game, Dill Gulch on deck

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— Colorado imposed stringent new air pollution regulations on the oil and gas industry in late February, but when Shell Oil goes before the Routt County Planning Commission on April 17 seeking to drill two new oil wells south of Hayden, the need to capture volatile organic compounds at the well site will seem like standard operating procedure.

The State Air Quality Control Commission voted in February to require oil and gas wells across the state, including existing wells, to capture the air pollutants known as VOCs, including methane, that have contributed to violations of federal ozone standards, particularly on the Front Range. As it turns out, Shell Oil already had agreed to live up to similar standards in Routt County and language to that effect is included in the two new permit applications.

Shell officials announced in August 2013 their company’s intention to gradually withdraw from exploratory drilling operations in Northwest Colorado. However, in September they added that they would continue to be active for a time as they lived up to lease agreements in place that included drilling deadlines.

Evidence that they intend to follow through is the fact that they are pursuing special-use permits that would allow them to drill the Williams 1-30 well off Routt County Road 51C on private land about 4.6 miles southeast of Hayden and the Dill Gulch 1-22 well, several miles to the west of Williams on land controlled by the State Land Trust. Of the two, Williams is most likely to get drilled this summer, with Dill Gulch in the on-deck circle.

Both wells would be drilled into the Niobrara Shale beneath the surface of rolling meadows and hills south of Hayden. And in both cases, Shell proposes to “install, maintain and operate VOC capture equipment on major equipment including tanks, wellheads, dehydrators and heater treaters to route captured emission through a combustion device.”

County Planning Director Chad Phillips confirmed that Shell previously has agreed to capture air pollutants on several permit applications going back more than a year.

Members of the citizens group, the Community Alliance of the Yampa Valley held meetings with Shell officials in summer 2012 to explore the company’s willingness to mitigate air and water pollution that could result from energy exploration. Community Alliance member Rodger Steen said Thursday that the measures Shell said at the time it would take to limit air pollution in the Yampa Valley are very similar to what the new Colorado rules require.

“What they agreed to is essentially captured in the new (statewide) rules,” Steen said. “The threshold limits that we discussed with Shell (in terms of VOC thresholds) are a little different. But what we were asking for was logical, and the new regulations reflect what the industry was capable of. It’s not like the Alliance had great foresight.”

The Williams Well is named after Hayden residents Michael and Amy Williams who originally signed a mineral rights lease with another company, Quicksilver Resources, on Dec. 14, 2010. The lease had a term of three years with an option to extend it for an additional two years.

Quicksilver originally began the process of acquiring a state permit for the well with the Colorado Oil and Gas Conservation Commission, according to Routt County, but withdrew that application before it was approved and never applied for a special-use permit from Routt. Subsequently, Quicksilver and Shell entered into an agreement that called for the latter to pursue permitting and drilling for the large majority of wells on Quicksilver’s lease holdings here, then share any profits. And that is what Shell is preparing to do this summer.

A tentative schedule for the new well, which would be located off C.R. 51C about 1.7 miles west of C.R. 27 calls for construction of an access road to begin in June, followed by drilling in late July to late August with completion operations taking place in September 2014.

Shell is requesting the option to employ hydraulic fracturing techniques on the well but won’t know if it will follow through on that plan until after the well is drilled, according to the application.

The Dill Gulch Well would be drilled on a 640-acre lease site comprising improved pasture controlled by the state. It is just off C.R. 53 and is an estimated 2.25 air miles south of Hayden. According to the application, Shell has designated it as an alternative site.

“If another well that is in the schedule (for this year) is not drilled in 2014, Dill Gulch might take its place in the drilling schedule.”

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1

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