MATTHEW BROWN Associated Press writer | Posted: Monday, April 9, 2007 12:00 am
BILLIINGS, Mont. - A Montana official issued a ruling that would block a natural gas company's bid to transport water produced during coal-bed methane development across the state line into Wyoming.
In a decision, state hearing examiner David Vogler denied a permit sought by Fidelity Exploration and Production to transport out of Montana 3,000 acre feet of water annually from the company's operations in the Tongue River basin.
The decision is not final, and Montana Department of Natural Resources and Conservation Director Mary Sexton said a second hearing in the case is likely. If Vogler's ruling holds, Tom Richmond with the state Oil and Gas Conservation Board said it could put a damper on coal-bed methane activity along the Wyoming-Montana border.
Vogler approved a second Fidelity permit allowing Fidelity to use about 3,800 acre feet of water on irrigation projects within Montana. An acre-foot of water, roughly 325,000 gallons, is enough to cover one acre of land with water one foot deep.
Disposing of the vast amounts of poor-quality water that are a byproduct of coal-bed methane production has become a nagging problem for the industry.
Until the water is removed from natural reservoirs surrounding underground coal seams, the methane, or natural gas, found in those seams cannot be tapped. But some farmers contend the high-salinity water can ruin crops and damage their soils. They have pressured state officials to restrict what companies do with the water.
When Fidelity crafted a plan that included shipping some of its water out of state instead of directly discharging it into the Tongue River, critics said the company was robbing Montana of a valuable resource.
Fidelity had hoped to use the water for irrigation projects in Wyoming. After objections were raised by Montana farmers and a conservation group, the dispute was referred to Vogler. He works for Sexton's agency.
In denying the permit, Vogler cited a drought that has kept the Tongue River running low for much of the last eight years.
"Fidelity has not proven by clear and convincing evidence that the out-of-state transport of water will not be contrary to water conservation in Montana," he wrote. "Montana's water resources are needed for use in Montana."
Mark Fix, a rancher along the Tongue and chairman of the Northern Plains Resource Council, which objected to the out-of-state water transport application, on Friday praised the state for "doing the right thing" in the case.
Fidelity Vice President Bruce Williams said he was "disappointed" but added that the ruling will not halt natural gas production since the company can continue disposing of its coal-bed methane water in the Tongue River.
"We still have in place treated and untreated water discharge permits, and we would continue to use those," he said.