Overview of CBM Well permitting relative to water handling.

Before a Coal Bed Methane well can be drilled, a permit must be obtained from the appropriate regulatory agency. The permit process may be done for a large group of wells or an individual well, and the specific method of handling produced water must be identified. This therefore requires that all the geological, environmental, and engineering analysis and documentation is completed and provided with the application for permit, and landowners and any other associated regulatory agency must be notified and be allowed to respond to the application in a public forum with questions, objections, or requested changes. The various permitting process are listed below depending on the water handling method planed for the well sites:

Surface Discharge Permits:
If CBM water is to be pumped from a CBM well to the land surface and then discharged a permit is required from the NPDES (National Pollution Discharge Elimination System) State Department of Environmental Quality (DEQ). This permit process takes from 250 to 550 days for approval due to the extensive nature of the application process and review, on going litigation, threats of litigation, resolution of issues raised by land owners, environmental groups, other state agencies and other interested parties. Varying levels of concern about surface discharge of CBM water have arisen. Dealing with these concerns has generated substantial regulatory overview of the permitting process. This overview results in significant time delays in development of the CBM resources with surface water discharge.

Surface Discharge Permit Evaluation Process:
The NPDES permit is required to monitor pollutants entering into the receiving drainage system (watershed). Each drainage system has a regulated Total Mean Daily Load (TMDL) and/or other maximum constituent levels assigned to it. DEQ must monitor the discharged water entering the drainage system to insure regulated levels are not exceeded. This is the defining issue under the permitting environment of the State of Montana and is the reason CBM development has been held up in that State. The Powder River and Tongue River are the Wyoming rivers receiving the bulk of Wyoming CBM discharges which has the potential to flow down stream and eventually reach Montana. The waters entering Montana from both rivers are approaching the maximum level of TMDLs. Montana regulators have adopted the position that the State of Montana can not allow the development of Montana CBM resources using surface discharge of produced CBM water. Montana state regulators have also indicated that they want or even need all of the CBM discharge water produced in their State to be re-injected. The planning process required in preparation for permit application is extensive and costly. Further large bonds must be posted in order to insure the high cost of reclamation will be achieved at a later date.

Impoundment Permits:
If CBM water is to be pumped from a CBM well and is then impounded as a condition of the NPDES permit, a permit is also required from the State Engineer's Office (SEO) for storing water. The SEO reservoir permit takes approximately one year to be issued assuming their are no issues in the permitting process. The approved SEO permit is required prior to submitting the application for the NPDES permit, thus the total permitting time required before a CBM well with water impoundment is approximately 1.5 years. The planning process required in preparation for permit application is extensive and costly. Further large bonds must be posted in order to insure the high cost of reclamation will be achieved at a later date.

ARID System Permitting:
In order to permit a well using the Arid System, a UIC permit must be obtained from the DEQ and usually can be obtained within 4 to 6 weeks. In Montana the produced water can be injected with the required permit from the US EPA Region 8. Injection wells would be described as Class V aquifer recharge wells permitted under 40 CFR 146 Subpart F. The application process requires an analysis of the accepting shallow aquifer and a water quality test. All of the water is pumped at low pressure from the coal seam to the shallower aquifer. Coal bed water in almost all cases is better quality than the water contained in the shallow aquifers, thus enhancing the quality and quantity of the water in the aquifer where the water is placed for future use. The application preparation is quite easy, no bonding is required, and reclamation costs are no more than that of shutting down the well at the end of its production life.