Ciris Energy Inc. has agreed to pay a $1,500 fine and to perform water quality testing to settle a corrective action brought by the Wyoming Oil and Gas Conservation Commission. Ciris is one of two companies proposing to stimulate the microbial process that turns coal into gas in the Powder River Basin. Both Ciris and Luca Technologies believe the process can produce commercial quantities of gas in the basin, where coal-bed methane gas development has gone from boom to bust in the past decade.

Ciris performed several chemical injections on another company’s coal-bed methane gas wells in the basin in 2010, without the expressed approval of the Oil and Gas Commission. The matter was settled today during the commission’s regular monthly hearing.

Ciris also faces enforcement action for the same alleged violation by the Wyoming Department of Environmental Quality which issued a “notice of violation” to Ciris on December 10, under the agency’s authority to oversee injections into “waters of the state.” Today, a Ciris representative confirmed that the company has agreed to pay a $25,920 penalty to DEQ.

Lynne Boomgaarden, who represents Ciris Energy in Wyoming, said there was confusion about whether sundry filing requirements were the responsibility of Ciris or the company that owns the wells, USA Exploration & Production. USA Exploration also agreed to a $1,500 fine to the Oil and Gas Commission, and to allow access to the wells for water quality testing. Boomgaarden said legislation that was passed this year should clarify regulatory requirements for the microbial gas production process.

“Ciris found itself in a fairly unusual situation,” Boomgaarden told commissioners, adding that there is some overlap between the Oil and Gas Commission and DEQ requirements. However, those issues are likely to be resolved through good communication.

From 2003 to 2010, Boomgaarden served as director of the Wyoming’s Office of State Lands & Investments, responsible for managing about 4 million acres of state trust land and minerals, including the leasing of state minerals. Boomgaarden also served as chairwoman of the Wyoming Oil and Gas Conservation Commission. She now works as an attorney for Schultz & Belcher LLP.

The microbial stimulation proposals by both Ciris and Luca Technologies face scrutiny from the Powder River Basin Resource Council, which advocates on behalf of many rural landowners in the region. Many of those landowners rely on the freshwater coal aquifer for domestic and stock water. They worry that various “nutrients” and chemicals used to stimulate the microbial process could degrade water quality and put human health at risk.

PRBRC staff members urged the commission, which includes Gov. Matt Mead, to apply a stringent water quality testing standard on the industry.

In a November, 2010, letter to DEQ’s Water Quality Division, Ciris Energy president Robert Downey disclosed that the company had injected 1,400 parts per million (ppm) ammonium chloride, 210 ppm sodium bromide, and 400 ppm acetate into the USA Exploration wells. Its injection slurry also included cobalt chloride and nickel chloride.

“The bromide is an inert, harmless tracer chemical. Sodium phosphate, potassium chloride and ammonium chloride all dissociate and and phosphate, potassium and ammonium ions are fully metabolized by indigenous microbes to build cell mass,” Downey wrote. “Cobalt chloride and nickel chloride are also metabolized fully by the indigenous microbes and used internally as biometal catalysts for cell growth and metabolic function. … All of these materials are fully consumed by the indigenous methanogenic consortia, leaving only modest amounts of sodium and chloride ions in the formation water.”

But PRBRC staff members said the state should perform its own chemical analysis to determine the potential for water quality impairment and human health risk.

“While Ciris claims that microbes consume all of these chemicals, we don’t know if that’s true,” said Jill Morrison, PRBRC staff member.

Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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Published on March 8, 2011

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