Routt County OKs oil well west of Hayden
Wyoming company gets permit for oil, gas exploration
October 27, 2010
Steamboat Springs — The Routt County Board of Commissioners voted unanimously Tuesday to approve a permit for a wildcat oil well on state trust lands three miles west of Hayden.
The energy exploration firm, J-W Operating Co., of Rock Springs, Wyo., expects to drill as deep as 12,000 feet in a box canyon on the north side of U.S. Highway 40.
The county permit covers oil and gas exploration. However, company spokesman Christopher Schutz said the glut of natural gas and resulting low market prices, coupled with the local geology, means his company expects and hopes to find oil.
Schutz is a production foreman with Cohort Energy, a subsidiary of J-W, which has 40 wells in neighboring Moffat County. He said a wildcat well is any oil well with unknown potential.
The commissioners engaged in detailed discussion about the well and potential impacts to water quality in nearby streams, wells and springs, and requirements that they be tested for organic and inorganic pollutants.
"I want the petitioners and the neighbors to have predictability," Commissioner Diane Mitsch Bush said.
The nearest landowners are longtime ranchers Kevin and Jill Murphy, who run 100 cow/calf pairs and harvest dryland hay. They are concerned about noise and impacts on wildlife, but their biggest worry is the potential for contaminating the water from seven springs, wells and ponds that their operation depends on. Their home in Cary Gulch is 2,700 feet from the drilling site, and they have a well that is 2,400 feet away.
"Our ranch has been in my husband's family going on 100 years," Jill Murphy said. "The water is the heartbeat of our livelihood. I do feel like the commissioners did listen to us and understand the importance of the water."
The commissioners approved the permit for the well with 30 conditions in place including one that requires J-W to retain an independent testing firm to first establish baseline water quality. They will be required to test at intervals during drilling and production phases. Testing is to be done on surface and groundwater sources within a mile of an oil well and within two miles if the new well turns out to produce natural gas.
The condition gives County Planning Director Chad Phillips authority to require that testing be done at his discretion.
Murphy asked the commissioners whether she and her husband would have the ability to request a test in the case that they notice changes in their water.
"You would go to our Planning Department and say, 'Hey, we think there's something wrong,'" Commission Chairwoman Nancy Stahoviak said.
Schutz said it is reasonable that the Murphys have questions about the proposed well.
"They've got a beautiful place up there, and I understand their concerns," he said.
J-W was granted an exploration permit for the same site last year but did not act on it. Jill Murphy said interaction with different representatives from J-W was difficult in 2009, but Schutz and consultant David Banko have been more cooperative.
Schutz promised them that personnel would be on hand any time gas flares were burning at the well pad.
Drilling may not begin this fall because the availability of drilling rigs is a problem, Schutz said. Once they get started, he expects it to take about 30 days to penetrate beyond the Mancos shale to deeper levels where the Niobrara shale is deposited.
"That's where they've been finding oil in eastern Colorado," he said.