Know Your Niobrara. Will oil in Routt County boom or bust?
04/01/2012 01:00 ● Published by Jennie Lay
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By Jennie Lay, Photo illustrations by Julia Hebard.
Steamboat Springs, CO - An emerging oil play in Routt County’s front yard has roused local consciousness. The arrival of exploratory wells initiated an elevated level of discourse between industry and the community, and between local government and state officials.
Drilling operations have the potential for significant effects on the Yampa Valley’s water, air, soil, wildlife and recreational opportunities. Decisions that will be made soon in Routt County have long-term impacts – on land, communities, the economy and maybe even our legacy.
The arrival of drilling rigs, flaring wells and fracking was foreseeable. The oil and gas industry has been prospering in neighboring areas for years – including record-setting drilling paces throughout the mid-2000s in Garfield and Rio Blanco counties.
Oil exploration is not foreign in Steamboat Springs’ local headlines either. As early as 1900, a “Steamboat Pilot” headline read “Crude Petroleum Flows from the Ground.”
For nearly two years, land men have been acquiring potentially lucrative severed mineral rights in Routt County. These are sub-surface property rights below homes and ranches – ones that surface owners around the West rarely control. Land men have spent millions of dollars with the State Land Board and Bureau of Land Management during public auctions – and bought multi-million-dollar ranches in South Routt, often sight unseen.
Last summer, Shell Oil and Quicksilver Resources filed for drilling permits at the county planning department. Local Division of Parks and Wildlife employees began working with energy companies to assess impacts on wildlife at proposed drill sites. A flare from a Quicksilver well on Wolf Mountain Ranch lit up the horizon near the Hayden airport.
By fall, community information gatherings from Hayden to Steamboat overflowed with inquisitive citizens. People crowded into county commissioner work sessions and planning commission meetings, returning week after week, while planning staff studied oil and gas regulations from other counties to learn from their experiences.
Opening November’s packed oil and gas work session with the Routt County Planning Commission, planning director Chad Phillips noted that he was grateful that the pace allowed the issue to generate and build public interest.
At stake are neoil wells in the 6,000-feet-deep Niobrara Shale Formation, a complex rock formation created 90 million years ago by an inland sea spanning several geological basins from Colorado’s eastern plains west into Utah, and from New Mexico to Wyoming. The layered shale and limestone typically ranges from 200 to 400 feet thick. In “Geology Profiles of the Steamboat Springs Area,” Newell P. Campbell describes the Niobrara Shale Formation as “bluish gray to dark gray; shale platy with white specks; abundant marine fossils; highly fractured limestone at base; weakly to moderately resistant” with a maximum thickness of 1,100 feet.
The Niobrara has been a hotbed of activity since Houston-based EOG Resources sprang a gusher at a Weld County well named “Jake” in 2009. Initially, the Front Range well yielded 1,558 barrels of oil a day, compared to an average 300 barrels a month from an average onshore U.S. oil well.
A combination of horizontal drilling and hydraulic fracturing, or “fracking,” is the pivotal technology making recovery of oil and gas accessible. Water, sand and a mixture of chemicals are shot under pressure into the rock to create hairline fractures and release oil and gas from newly opened fissures. The chemicals are designed to keep sand suspended, reduce friction and disinfect tiny new spaces.
The composition of fracking fluids varies from well to well, depending on individual geologic characteristics. Over the years, the industry resisted disclosing the makeup of their fracking fluid mixtures, arguing that they’re proprietary – and harmless. It has also opposed federal legislation to regulate fracking under the Clean Water Act.
Colorado now requires disclosure of types and concentrations of fracking chemicals, which will be available in a searchable database within a year. Trade secret claims must be justified and certified by companies, and can be disputed. Data is posted on FracFocus.org.
Fracking generally involves water – as many as 5 million gallons for a single horizontally drilled well – and each well can be fracked multiple times. Some of the water mixed with fracking chemicals comes back up with the oil and some stays in the earth. What comes up must be cleaned and disposed of. But GasFrac Energy Services, a Canadian company, uses propane or butane gel instead of water. Once injected, it turns into a gas and exits the well with the oil or gas. While this may be a good solution in the drought-weary West, the hitch is that it’s flammable. This is the system Quicksilver used to frack its first well on Wolf Mountain Ranch, near Hayden, last summer.
With nearly 100,000 acres in conservation easements in Routt County, Wolf Mountain Ranch’s PirtlaWell is the county’s first on a conserved property. A proposed well on the Camilletti Ranch is on a conservation easement that the Routt County Purchase of Development Rights funded in December.
So far, only a half-dozen drilling permits are in the pipe locally, but things move fast in this industry. In the past year, all permits approved at the state level have yet to transform into local planning requests for permits to drill. As of press time, the Colorado Oil and Gas Conservation Commission has issued 10 Niobrara drilling permits in Routt County, 18 in Jackson County to the east, and 50 in Moffat County to the west. In early January, barely two years after Jake, Halliburton committed to building a $20 million sand terminal to support its fracking in the area.