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Regulatory Issues
Currently, in order to produce the CBM, water must be pumped from the well bore to the land surface and then discharged. In order to discharge the water from a well to the land surface a NPDES (National Pollution Discharge Elimination System) permit is required from the State Department of Environmental Quality (DEQ). In the early days of CBM the permit process took about 60 days to receive the approved permit. Now the permit process takes from 120 to 200 days for approval. This is due in part because the DEQ is inundated with work, on going litigation, threats of litigation, and resolution of issues raised by land owners, environmental groups, other state agencies and other interested parties.
If a company is going to impound the produced water as a condition of the NPDES permit, a permit from the State Engineer's Office (SEO) to store water is needed as well. The SEO reservoir permit takes about one year to be issued. The approved SEO permit is required prior to submitting the application for the NPDES permit. Total permitting time required to produce water and gas from a CBM well is currently approximately 1.5 years.
The reason for the NPDES permit is 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 prevent an exceedence of the regulated levels. 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. Currently, the waters entering Montana from both rivers are approaching the exceedence level of the 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 re-injected.
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. If surface discharge of CBM water can be eliminated this would effectively accelerate the permitting process and subsequently the development of CBM resources.
Note: Coal bed water in almost all cases is better quality than the water contained in the shallow aquifer(s). Water quality exceedences occur when the discharged water reaches the ground and flows along the drainages. The soils hold anions and cations that form salts when exposed to water, and as the water moves through the soils the salts become dissolved in the water thus impairing the water quality.