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A Colorado oil company\u2019s plan to dispose of gas and oil wastewater by injecting it into a deep well in western Nebraska is drawing strong objections from residents who live near the proposed site.<\/p>\n
Wastewater disposal certainly is not the most glamorous oilfield job, but it\u2019s essential to keeping things running smoothly, especially in Colorado and Wyoming, where oil wells pump up significantly more water than oil.<\/p>\n
The energy company, T-Rex Oil of Broomfield, is proposing what would be the largest operation of its type in Nebraska, accepting upward of 80 truckloads and 10,000 barrels of wastewater a day at the Sioux County site, Inside Energy and NET News in Nebraska have learned. The wastewater would come from Colorado, Wyoming and possibly some from Nebraska.<\/p>\n
The brine then would be processed on site before being pumped underground. Depths in injection wells easily can reach more than two miles.<\/p>\n
\u201cOur country needs oil and gas very badly,\u201d T-Rex chief executive officer Don Walford said. \u201cThis services that business. It makes it safer. It makes it more economical.\u201d<\/p>\n
But some Sioux Country residents would prefer that T-Rex keep the wastewater in its own backyard. Or at least not in their backyard.<\/p>\n
The proposed well, and the company itself, have come under scrutiny.<\/p>\n
\u201cI just have reasonable doubts about the safety,\u201d said Jane Grove, whose ranch sits near the well site. Brian Palm, a farmer and rancher in the county, worries that the disposal well could threaten fresh-water aquifers \u2013 an invaluable resource on the arid Great Plains.<\/p>\n
In 2013, Colorado produced almost 65 million barrels of oil but almost 395 million barrels of wastewater \u2013 the super salty, sometimes chemical-laden fluid that comes up after a well is drilled, according to figures from the Colorado Oil and Gas Conservation Commission. The 2014 numbers are awaiting fourth quarter results.<\/p>\n
One rule of thumb is that as a well becomes older in its operational life, more water comes up with the oil.<\/p>\n
Some of that comes from the hydraulic fracturing process, and some occurs naturally underground. Either way, it\u2019s an unwanted byproduct that has to go somewhere.<\/p>\n
\u201cWithout this water management, oil and gas doesn\u2019t happen,\u201d said Justin Haigler, president of Black Bison, Wyoming\u2019s largest water services company.<\/p>\n
Boston-based water consulting firm Bluefield Research estimates the U.S. hydraulic fracturing industry spent more than $6 billion in 2014 on water management alone.<\/p>\n
T-Rex Oil also has presented conflicting information about its plans. It was formed from the remnants of Rancher Energy Corp., a bankrupt oil firm and had little cash on hand in 2014. According to the company\u2019s SEC filing, T-Rex did not get insurance \u201cagainst such things as blowouts and pollution risks because of the prohibitive expense.\u201d<\/p>\n
Even though that kind of insurance is not required by the state of Nebraska, it\u2019s still a concern for Palm.<\/p>\n
\u201cWhere is their cash to do their due diligence and to do this right, to make it perfectly safe for our aquifer?\u201d he said. \u201cWhat are they going to do to prove they can do this right?\u201d<\/p>\n
The company also suggested the Nebraska Oil and Gas Conservation Commission had given the project tacit approval, but director Bill Sydow said that just isn\u2019t true. T-Rex also has given conflicting reports about the volume of wastewater it intends to dispose of at the site. The injection well application states \u201cwe expect to have an initial capacity of up to 10,000 barrels per day,\u201d while the company\u2019s December 2014 SEC filing said the project would have potential injection rates of up to 15,000 barrels per day.<\/p>\n
Perhaps the biggest question is why T-Rex wants to open up shop in Nebraska at all. The state is not a large oil and gas producer, and companies in Colorado and Wyoming would have to truck wastewater some distance to reach its site.<\/p>\n
Could it be the relatively small amount required in Nebraska to be posted as bond in the event that something goes wrong \u2013 $10,000 versus $75,000 or more in Colorado and Wyoming?<\/p>\n
T-Rex says no. The reason is that the company already owns the dried-up oil well, so why not turn it into something useful like an injection well?<\/p>\n
Marty Gottlob, the company\u2019s geologist, says that low oil prices make this a good time to enter the wastewater business, because assets are cheap right now.<\/p>\n
\u201cIt\u2019s like the stock market,\u201d he said. \u201cBuy low; sell high.\u201d<\/p>\n
But the company may face an uphill battle to get the required permit. T-Rex is facing strong opposition from local residents.<\/p>\n
Like many industrial processes, injection wells do come with risks. Inside Energy has reported that in North Dakota, for example, the wastewater spill rate per well almost tripled between 2004 and 2013.<\/p>\n
In Colorado, the Oil and Gas Conservation Commission reported more than 14,000 barrels of spilled wastewater \u2013 which can be deadly to plant life and soil \u2013 in 2013 and more than 13,500 barrels through the third quarter of 2014.<\/p>\n
Another concern is that scientists from Ohio to Oklahoma have linked increases in seismic activity to injection wells.<\/p>\n
Bill Kelly, of Net News contributed to this story. Inside Energy is a local journalism collaborative based at Rocky Mountain PBS in Denver, with affiliate stations and reporters in North Dakota and Wyoming. For more information, contact AlisaBarba@rmpbs.org<\/a>. NET is comprised of Nebraska\u2019s NPR and PBS stations.<\/p>\n