Two federal agencies have approved a proposal by Gunnison Energy to drill up to 35 natural gas wells in the upper North Fork Valley.
The company wants to drill the wells down and then out horizontally into the Mancos shale formation from five well pads — three of them new — in an area west of McClure Pass covering nearly 35,000 acres in Gunnison and Delta counties. It also plans to build associated access roads and pipelines. The area includes about 25,800 acres of U.S. Forest Service land, 8,648 acres of private land and a small amount of Bureau of Land Management acreage. It also includes about 31,000 acres of federal oil and gas.
The company initially had planned to use nitrogen foam or gel to hydraulically fracture the wells, but then switched to a water-based approach. Horizontal wells in particular can require high volumes of water for fracking, and Gunnison Energy is projecting it will use about 21 million gallons of water to frack each well.
It expects to get about 90% of that water from what is produced from its coalbed methane wells in the area and from a water right from the former Elk Creek coal mine, but also plans to buy water from the city of Delta.
The BLM, which administers the nation’s oil and gas program for federal lands, approved the project in August as it applies to the acreage not on national forest. At that point the Forest Service issued a draft decision of approval pertaining to the surface operations and impacts on its lands. It finalized its decision this month, with the BLM then issuing a second approval specific to national forest lands.
Gunnison Energy still will need to get drilling permits from the BLM for individual wells before it can drill those wells.
The company had proposed completing the drilling in four years, but the project is now expected to take six years because it has committed to using just one drilling rig at a time, rather than two rigs after the first two years. This will result in less water use, air pollution and truck traffic for delivery of water and frack sand at any one time.
According to the Forest Service decision by Chad Stewart, supervisor of the Grand Mesa, Uncompahgre and Gunnison National Forests, reducing the maximum number of wells drilled per year addresses the concern of water depletions potentially affecting endangered fish downstream in the Colorado River.
The company plans to use a temporary water surface pipeline to reduce trucking of water, and use rail delivery of sand from Fruita to reduce truck-hauling of sand.
The proposal drew 1,349 comments in an initial scoping period, and 10 objections to the Forest Service draft decision released in August.
Project opponent and Delta County resident David Inouye voiced disappointment over the project’s approval.
“I think any activity related to fossil fuel development in the North Fork Valley’s watershed has the potential to cause problems,” he said. “I guess the industry here in Colorado has already demonstrated it’s not possible to extract those resources without the occasional or sometimes common accident, and in the North Fork Valley we’re quite susceptible to something that would threaten the reputation of this area for organic agriculture.”
Stewart said in his written decision that spill-prevention and related measures are in place to protect farmland, vineyards and other areas downstream of the project area or where products are transported.
“Oil and gas development in the North Fork Valley has occurred concurrently with farming,” Stewart added.
Inouye said only a small number of wells have been developed in the valley “and there have been spills already.” He said that while those spills fortunately haven’t had big impacts, he worries about the odds for problems increasing as drilling activity levels increase. A Gunnison Energy official couldn’t be reached for comment Wednesday.
Delta County Commissioner Mark Roeber said he’s glad to see the project finally approved. “It’s not really a big project but every little bit helps,” he said.
He said he didn’t expect work on the project to move fast unless the price of natural gas jumps. He also pointed to restrictions, such as a prohibition on drilling and related activities in the winter to protect big game, that effectively limit how much drilling can occur in a given year. “There’s a lot of protections in place and continuing to be more so. I’m just glad to see (the project) finally move forward,” he said.
Gunnison Energy has estimated the project could produce up to 700 billion cubic feet of gas over 30 years. That’s equal to a little over 2% of what the nation consumed in 2018.