Shell Oil offers to exceed water testing rules at well west of Steamboat, but details dangle | SteamboatToday.com

Shell Oil offers to exceed water testing rules at well west of Steamboat, but details dangle

The Routt County Board of Commissioners will bring the Camilletti oil well permit back through the county approval process Tuesday.

— In spite of what appear to be good intentions, Shell Oil officials could find themselves hashing out water well monitoring requirements with the Routt County Board of Commissioners on Tuesday afternoon when they bring the Camilletti oil well permit back through the county approval process.

Ironically, the county already granted Quicksilver Resources a permit in July 2012 to drill the well just north of unincorporated Milner about 11 miles west of Steamboat Springs. However, Quicksilver officials were so displeased with water quality monitoring conditions placed on that permit they declined to ever sign or act on it. Both sides left the table expressing their frustrations.

It was the last of a series of sometimes tense public hearings, including one that lasted until 12:45 a.m. without a decisive vote up or down.

This month, Shell has proposed to go beyond the newest water well monitoring requirements imposed by the state of Colorado for new oil wells at Camilletti and, unlike Quicksilver, does not plan to frack the well. As of a Monday briefing with planning staff, a couple of ambiguous sentences about how many water wells to test this time around seemed to be the only hangup between Shell and a vote of approval.

County Commissioner Doug Monger said Monday that he doesn't see why some small differences about language should delay approval of the Camilletti well this time.

"I don't see any reason to table this," Monger said.

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Since July 2012, Quicksilver and Shell have entered into an agreement that calls for profit sharing on new wells in an area of mutual interest where both companies own mineral rights leases, but Shell will conduct drilling operations. Also in the interim, the Colorado Oil and Gas Conservation Commission has enacted a new regulation, Rule 609, which spells out significantly less stringent water monitoring requirements on energy exploration companies than what Routt County was imposing on Quicksilver.

It's a new oil company and a new Routt County Board of Commissioners in September 2013, but water and oil appear to remain a sticky subject.

County Planner Chris Brookshire told the commissioners that Shell is coming back for a new permit because it has chosen to make adjustments to the private road access to the well off U.S. Highway 40, shifting the point where the road crosses Cheney and Little Cheney creeks as well as expanding and shifting the location of the well pad to the west. This change in plans led the oil company to come back to the county for a new special use permit.

The Routt County Planning Commission voted, 7-0, on Sept. 5 to recommend approval of the permit. Shell representative Steve Compton, a water expert, told the Planning Commission that under Rule 609, Shell only is required to survey fresh water sources within a half-mile radius of the well bore, but because there is only a single spring within that distance of the Camilletti well, the company had decided to expand the boundary of its own volition to 1 mile for wells north of U.S. Highway 40. That brought eight mapped wells into play, of which three turned out to be nonexistent, Brookshire told the commissioners Monday.

The company has permission to test the remaining five wells but has yet to confirm that it can access all five. And that in turn has produced some vague language about how many wells the company will conduct baseline testing on to determine if chemical compounds like methane, benzene, toluene and others already are present.

Commissioner Tim Corrigan said he would prefer language in the conditions of approval that is not vague about how many wells Shell will test.

Brookshire pointed out that there is an ample number of additional wells in Milner, south of U.S. Highway 40 and within a 1-mile radius of the well bore that Shell could seek to test. But the company is not willing to go south of the highway.

To add to the irony, Quicksilver already had done some baseline testing of domestic wells in Milner looking forward to drilling the Camilletti oil well itself.

Now, the well is one of the last Shell plans to drill here before its announced departure from the Sand Wash Basin, comprising Routt and Moffat counties, to concentrate its efforts in more promising oil fields.

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

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