Case No. 07SA293, Vance v. Wolfe . Water Right Determination and Administration Act of 1969

The Vances and Fitzgeralds, ranchers in the San Juan basin, "asked the water court to determine the legal obligations of the State Engineer and the Division Engineer for Water Division 7 regarding well permits and augmentation plans when ground water is diverted for the purpose of coalbed methane production.

The Engineers and BPAmerica Production Company, an intervenor in the action, opposed the request for a declaratory judgment, arguing that the use of water during coalbed methane production is not a "beneficial use" and thus need not be regulated. The water court held that coalbed methane production constitutes an appropriation for a "beneficial use" and that consequently, the Engineers cannot allow out-of-priority diversions without a well permit and, where necessary, a decree adjudicating an augmentation plan. This direct appeal followed.

We now affirm the water court. The Water Right Determination and Administration Act of 1969 defines "beneficial use" as "the use of that amount of water that is reasonable and appropriate under reasonably efficient practices to accomplish without waste the purpose for which the appropriation is lawfully made." (37-92-103) (4), C.R.S. (2008). Under the language of the Act the coalbed methane process "uses" water--by extracting it from the ground and storing it in tanks--to "accomplish" a particular "purpose" --the release of methane gas. Consequently, the extraction of water to facilitate coalbed methane production is a "beneficial use" as defined in the Act and a "well" as define in the Colorado Ground Water Management Act. Coalbed Methane production is therefore subject to regulation under both acts. We reject the argument that water used in coalbead methane production is merely a nuisance rather than a "beneficial use". On the contrary, the use of water in coalbed methane production is an integral part of the process itself. The presence and subsequent controlled extraction of the water makes the capture of methane gas possible. Accordingly, we affirm the order of the District Court for Water Division 7 and remand for further proceedings consistent with this opinion."

April 20, 2009

http://www.courts.state.co.us/Courts/Supreme_Court/opinions/2007/07SA293.pdf

The court cited the existance of 4,000 wells in the San Juan basin, drilled underground between 2,000 and 3,000 feet to extract coalbed methane gas.








ivision Engineer for Water