Coalbed Methane and the Powder River Basin: Making 'Natural' Water a Pollutant
Christina Niescier Hinkson
April 8, 2005
I. Introduction
Coalbed methane ("CBM") development and production has exploded in recent years throughout the western United States. Specifically, the Powder River Basin of Montana has experienced profound effects, and both the community as well as the industry have reacted. The region has been called the "Saudi Arabia of Natural Gas," due to its high concentration of CBM resources. Development and production, however, have not come without consequences.
The issues created by development and production, including the potential of future impacts resulting from the rapid growth of the industry, have become the subject of continuing litigation. The environmental impacts of the wastewater byproduct of drilling can be detrimental when pumped into another waterbody due to the high salinity of the wastewater. If the wastewater is considered a pollutant under the Clean Water Act ("CWA"), then it cannot be discharged without a permit. The 9th Circuit addressed this issue and overturned a lower court decision, holding that unaltered wastewater produced from CBM drilling is indeed a pollutant within the terms of the CWA when pumped into another waterbody.[1]
Much of the controversy in the west has revolved around permitting and leasing mineral and property rights.[2] This editorial, however, will primarily focus on the environmental impacts of CBM development and production in relation to the environmental impacts of unaltered groundwater when it is added to another waterbody, which it would not reach but for its discharge after CBM drilling. If CBM's environmental impacts are not considered, serious consequences could result, not only affecting the environment, but also the economic and social structures of the area. Ultimately, the future of the Powder River Basin depends on the adequacy with which these impacts are addressed.
II. Background
A. The Potential of CBM
CBM, or Coalbed Natural Gas, forms during the process of coalification.[3] As the biological material compresses and changes, various hydrocarbons are released, including CBM.[4] The CBM that does not reach the surface is found in coal seams, trapped in the coal itself, and held in place by water pressure.[5] In order to extract the gas, the pressure must be reduced by releasing the water.[6]
The gas is mined by releasing this pressure through conventional wells.[7] The well is drilled, and the water is pumped out, thereby releasing the pressure and allowing the gas to be extracted and captured.[8] The byproduct of this process is groundwater which remains unaltered throughout production. A single well can generate as much as eighteen to twenty gallons of wastewater per minute, or 25,000 gallons per day.[9] Although the water is not altered, in its natural state it contains "suspended solids, calcium, magnesium, sodium, potassium, bicarbonate, carbonate, sulfate, chloride, and fluoride."[10] The concentration of these elements makes the water "salty." Adding this water into another waterbody can alter the new waterbody's temperature and biological makeup. This can result in erosion, eliminating the productivity of the soil; which is where the controversy began in the Powder River Basin.
B. The Conflict in Montana
The coalbeds in the Powder River Basin are relatively shallow and thick.[11] New mining methods have made the resources more accessible, renewing interest in the region in recent years.[12] Much of the environmental controversy rests on how the groundwater-byproduct is discharged. Simply dumping it into a nearby waterbody can seriously alter that waterbody's biological makeup and negatively impact the ecology of the area. Such was the case of the Tongue River.
Fidelity Exploration & Development Company ("Fidelity") extracted CBM in the Powder River Basin for commercial purposes.[13] Fidelity pumped the water into the nearby Tongue River, which was not hydrologically connected to the groundwater discharged.[14] Citizens and ranchers questioned the legality of this practice under the CWA due to the detrimental effects the high salinity of the water had on surrounding lands.[15] The water, although unaltered, contained elements which would otherwise be considered pollutants under the CWA.[16] The water was unfit for irrigation, and these discharges resulted in erosion and degradation of soil. Citizens and environmentalists sought legal action to prevent such discharges without a permit. Although the claim was dismissed at the trial level, success was found at the appellate level.
III. Social and Economic Impacts
Although most environmental claims stem from the discharge of wastewater, CBM has other implications as well. The appellate court's decision, holding that wastewater from CBM production was a pollutant, affected more than environmental interests. Drilling has had significant social and economical impacts on the region as well.
The continuing expansion of the energy industry, and the questioning of American dependence on foreign energy sources, such as oil, has prompted the call for an increase in domestic energy production. CBM could greatly assist in achieving independence from foreign energy, or at the very least decrease domestic demand for foreign supply. The economic potential of drilling is immense, but those whose land is impacted are not as excited by this possibility. The environmental impacts of the growth, development, and execution of this industry have resulted in even further social and economic impacts, leaving many issues in this region unsolved.
A. Social Impacts
The west has a unique social dichotomy, and part of this structure has become an interest in land preservation. The image of the west is one of wide open spaces and wild landscapes. Recent decades have seen an increase in a new type of "Westerner," one more interested in looking at the land than working on it.[17] These new residents have a great interest in preserving the land, and have been the ones to take the first to step in voicing their environmental concerns.[18]
On a national level, the impacts of energy use and extraction have gained wide social concern.[19] An increasing amount of natural gas is supplied by non-conventional sources, such as CBM.[20] Although the potential for these sources is well known, so are the potential environmental hazards that may result and the subsequent costs of mitigation.
Social concerns are closely linked with economic concerns. Although gas production has increased revenues and had an economically positive impact on the industry, it has had a negative economic impact on property values and public morale.
B. Economic Impacts
Economically, CBM can be highly profitable in the short-term, but if proper measures are not taken to mitigate environmental impacts, long-term costs could be high for mining corporations. Regardless, mining corporations have been drawn to the Powder River Basin.
Ranchers and land owners who own the mineral rights to the land stand to profit greatly from the revenues drilling will generate.[21] Those who do not, however, are forced to stand by and watch the slow "destruction" of their property.[22] Although the question has been litigated extensively, surface owners cannot prevent development by someone who has valid mineral rights to their land, as it is outside the scope their power.[23]
IV. Environmental Impacts
The extraction of CBM has resulted in serious environmental impacts. Natural gas itself is the cleanest burning fossil fuel; however, the extraction process has resulted in "lowering water tables, souring streams with salt and scarring wild lands with wastewater pits and screaming gas compressors."[24] The land and area are forever changed. Aside from the negative impacts to aesthetics, most environmental complaints result from the wastewater left over from drilling.
The CWA does not allow for a discharge into the waters of the United States without a permit.[25]
Any applicant for a Federal license or permit to conduct activity including, but not limited to, the construction and operation of facilities, which may result in any discharge into the navigable waters, shall provide the licensing or permitting agency a certification from the State in which the discharge originates or will originate, or, if appropriate, from the interstate water pollution control agency having jurisdiction over the navigable waters at the point where the discharge originates or will originate, that such discharge will comply with the applicable sections. . .of this title.[26]
Such a permit can be obtained under the National Pollutant Discharge Elimination System, or the state equivalent.[27] The discharging of unaltered groundwater into the Tongue River, located in the Powder River Basin, was found in Northern Plains Resource Council v. Fidelity Exploration & Development Co., to be the discharge of a pollutant into a water of the United States within the terms of the CWA.[28]
The court found it was a pollutant for three reasons. First, CBM wastewater is a pollutant because it is industrial waste.[29] The discharged groundwater is a direct byproduct of the mining process. The court found that industrial waste is not limited to toxic materials, but includes any materials "pertaining to, or derived from industry."[30] The mining, although it did not alter the groundwater, generated wastewater byproduct.
Second, the CBM wastewater is a pollutant because it is "‘produced water' derived from gas extraction."[31] Although many cases hold, as Fidelity argued, that produced water must contain industrially added chemicals, the US Environmental Protection Agency does not require the addition of such chemicals to necessitate a wastewater classification.[32] In this case, the wastewater was produced through the mining of CBM. Regardless of its unaltered state, it is still "produced" and therefore a pollutant.
Third, the court found the wastewater was a pollutant within the plain meaning of the CWA definition of pollution.[33] The CWA defines "pollution" as the "man-made or man-induced alteration of the chemical, physical, biological, and radiological integrity of the water."[34] When Fidelity discharged the CBM wastewater into the Tongue River, it directly altered the water quality, and therefore the biological integrity of the waterbody. Although the water was unaltered, the discharge was "man-induced," and the wastewater would not have otherwise reached the Tongue River. If discharging was allowed unpermitted, the water would become unfit for irrigation and therefore unfit for productive use by ranchers and farmers.[35]
Under the reasoning of these three arguments, the appellate court held that there could be no discharge without a permit, and the state could not create an exemption.[36] Simply put, the addition of one naturally occurring waterbody to another is considered a pollutant.[37]
CBM production is still possible even if the wastewater cannot be discharged due to lack of permit. The options for disposing of the wastewater include (listed relatively from least to most expensive):
· Traditional surface discharge: water is allowed to travel downstream and be absorbed or evaporate as it moves;
· Irrigation: water released to agricultural areas;
· Treatment: water is treated to improve quality;
· Containment with reservoirs: water is piped to a surface impoundment where it is absorbed or evaporates as it moves, or may be used to water cattle;
· Atomization: water evaporates more quickly than normal through the use of misters placed in surface impoundments;
· Shallow injection or aquifer recharge: water is pumped into freshwater aquifers;
· Deep injection: salty water is typically reinjected deep into the ground.[38]
Simply discharging the wastewater into a nearby waterbody is the most economically sound option in the short-term. However, long-term costs of the impacts to that waterbody must also be considered. Although deep injection back into the ground is the safest way to dispose of the wastewater, it is simply too expensive to be feasible. Most companies take the option of creating holding ponds. Again, the effectiveness of holding ponds depends on the adequacy and durability with which the pond is lined and prevented from leaking into a nearby waterbody. As long as the water can be somehow detained or prevented from entering another waterbody, the detrimental effects can be prevented.
V. Conclusion
The Powder River Basin in Montana has been profoundly impacted by the extraction, and byproducts of CBM. With the increasing demand for exploring domestic energy sources, which would decrease American dependence on foreign energy,[39] the plight of Westerners may be met with little sympathy as this battle continues. In the case of discharged wastewater, however, environmental and citizen groups have met with some success. Even unaltered, wastewater is considered foreign when it enters a new waterbody according to the 9th Circuit decision in Northern Plains Resource Council v. Fidelity Exploration and Development Co..[40] Such a discharge cannot be made under the CWA without a permit.
The discovery and potential of CBM can be seen as both a blessing and a curse for the region. Although many issues remain unresolved, the potential to extract CBM while mitigating environmental impacts is present. Citizens and environmental groups may not be able to prevent CBM development from progressing, but they can fight to assure it is done in a socially, economically, and environmentally responsible way.
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[1] N. Plains Res. Council, Inc. v. Fid. Exploration & Dev. Co., 325 F.3d 1155, 1157-58 (2003). Cert. denied Fid. Exploration & Dev. Co. v. name=SearchTerm}N. Plains Res. Council, Inc., 124 S.Ct. 434 (2003).
[2] See N. Plains Res. Council, Inc. v. US Bureau of Land Mgmt., 298 F.Supp.2d 1017 (2003). Affirmed in N. Plains Res. Council, Inc. v. US Bureau of Land Mgmt., 107 Fed.Appx. 166 (9th Cir. 2004).
[3] Education: The Geology of Coalbed Methane, Coalbed Natural Gas Alliance at http://www.cbnga.com/geologyofmethane.htm (last visited November 29, 2004).
[4] Id. ("During coalification, plant material that accumulated in ancient swamps and bogs and was preserved enough to prevent decay, begins to compress. This material is first converted to peat as the majority of water is expelled. As the temperature increases with the continuation of burial, ranks of coal start to form from this peat starting with lignite coal, followed by subbituminous coal and bituminous coal. In the Powder River Basin, the coal is subbituminous in rank.").
[5] Education: What is Coalbed Natural Gas?, Coalbed Natural Gas Alliance at http://www.cbnga.com/whatiscbng.htm (last visited November 29, 2004).
[7] Education: The Geology of Coalbed Methane, supra note 3.
[8] N. Plains Res. Council, Inc. v. Fid. Exploration & Dev. Co., 325 F.3d 1155, 1158 (2003).
[9] Richard Menzies, Waterworld, Range Magazine, available at http://www.rangemagazine.com/archives/stories/fall00/waterworld.htm (last visited November 29, 2004).
[10] N. Plains Res. Council, Inc., 325 F.3d at 1158.
[11] Education: The Geology of Coalbed Methane, supra note 3.
[23] Property rights in some areas of the west are divided between surface and subsurface rights (mineral rights). In the case of the Powder River Basin, the Bureau of Land Management leases these mineral rights to Fidelity Exploration & Development Co., giving the mining company the full right to mine the land.
[28] N. Plains Res. Council, Inc., 325 F.3d at 1157-58. "On appeal, we decide (1) whether the CBM discharge water is a "pollutant" within the meaning of the CWA, and (2) whether Montana state law can exempt Fidelity from obtaining National Pollution Discharge Elimination System (NPDES) permits under the CWA. We hold that the unaltered groundwater produced in association with methane gas extraction, and discharged into the river, is a pollutant within the meaning of the CWA. We also hold that states cannot create exemptions to the CWA, whether or not the EPA has delegated permitting authority to the state." Id.
[35] N. Plains Res. Council, Inc., 325 F.3d at 1162.
[36] Id. at 1157-58. (Initially, Fidelity was told by the state of Montana that no permit was necessary for a discharge of unaltered groundwater. No such exemption was allowed in the CWA. The court found that such a statutory provision conflicted directly with Federal law (i.e. the CWA), and was preempted and therefore invalid). See also Donna S. Charnock, Northern Plains Resource Council v. Fidelity Exploration and Development Co.: State Law Exemptions for Groundwater Discharge Cannot Restrict or Invalidate Provisions of the Clean Water Act, 11 U. Balt. J. Envtl. L. 75 (2003).
[37] See Debra A. Owen, When Naturally Occurring Water Is a Pollutant: Northern Plains Resource Council v. Fidelity Exploration and Development Co., 8 Great Plains Nat. Resources J. 65 (2003).
[38] Gary Bryner, Coalbed Methane Development in the Intermountain West: Producing Energy and Protecting Water, 4 Wyo. L. Rev. 541, 544 (2004).