New Moneta proposal said to threaten ‘most valuable’ water

A developer at the Moneta Divide gas- and oilfield wants to inject millions of gallons a day of polluted water into the Madison aquifer east of Riverton, a move watchdog groups say threatens the “most valuable” potable aquifer in the state.

Aethon Energy, a private Dallas-based firm, filed a 282-page application with the Wyoming Oil and Gas Conservation Commission on Aug. 14 seeking an injection permit and “aquifer exemption.” The company seeks to pump up to 1.26 million gallons (30,000 barrels) a day of polluted water 15,000 feet underground, most of it into the Madison formation.

The energy company and Burlington Resources seek to expand the Moneta Divide gas-and oilfield but need approval to dispose of millions of gallons of water the development would produce. The Bureau of Land Management has approved many aspects of the proposed expansion, but the Wyoming Department of Environmental Quality for now has limited the volume of tainted water that can be dumped into nearby streams, effectively inhibiting development.   

Aethon contends in its application that the Madison is an appropriate destination for the pollution because the aquifer is already tainted with the carcinogen benzene and would be too expensive for nearby communities to develop as a drinking water supply.

The company made its case to use an existing but shut-in disposal well approximately 30 miles southeast of Shoshoni in the application. The commission has scheduled a hearing on the issue for Nov. 10.

“[T]he water produced from the Madison formation contains Benzene at concentrations that exceed the EPA established maximum contaminant levels … for drinking water, and thus [it is] economically or technologically impractical to render the water fit for use as fresh and potable water,” the application states.

That justifies an exemption allowing the underground injection, Aethon contends. The company did not respond to a request for elaboration.

Aethon has been looking for ways to dispose of the tainted water — oilfield waste — as it tries to expand the Moneta Divide gas- and oilfield by 4,250 wells. Using the Marlin 29-21 disposal well, a plan the state has rejected twice before, would help enable the expansion.

The Madison disposal plan, first proposed in 2011, faces continued opposition, however, including from the Powder River Basin Resource Council. The group believes water in the targeted Madison formation is fit to drink.

“It is crazy to pollute our fresh water,” said Jill Morrison, executive director of the land owner group that has watch-dogged the issue for years. The Madison water is “way more valuable than that gas production,” she said.

As well as being an important aquifer, The Madison is, in places, an oil reservoir. It extends from the western South Dakota to eastern Idaho, from Canada to the Grand Canyon.

Resurrected plan

Plans to dispose of produced water into the Madison at the Marlin well began nine years ago when EnCana owned much of the Moneta Divide energy field, said Tom Kropatsch, deputy oil and gas supervisor at the Wyoming Oil and Gas Conservation Commission. Before EnCana drilled the well, the commission gave conditional approval for disposal 15,000 feet down, provided that the water quality there was as poor as anticipated.

But once the Marlin well was drilled, tests showed the water to be much better than thought, Kropatsch said. The level of total dissolved solids “was much lower than what it was expected to be,” he said of one key measure.

Therefore the aquifer was too clean and valuable to pollute.

“Essentially, the conditional approval was not met,” he said. “The Madison formation [exemption] was denied at that time.”

EnCana tried again in 2013 with new information about the underground geologic structures. Wrangling over the permit continued through 2016, when the Oil and Gas commission again rejected the plan.

At the time Commissioner Tom Fitzsimmons, now no longer on the board, called EnCana’s data “short” and said the “freshness of the water” compelled him to move for rejection.

Commissioner Tom Drean, also no longer on the board, found a model used to justify the request flawed. He called it and its inputs “simplistic and not representative of what the actual geology and the situation is.”

The board rejected the application unanimously 5-0, but left the door open for reconsideration with new or better information. 

EnCana found benzene in the Madison formation water of the Marlin well in 2012, according to lab reports. The existence of naturally occurring hydrocarbons like benzene can be a reason to allow injection into an aquifer. But the commission did not mention benzene as a reason for finally rejecting the injection application in February 2016.

Nevertheless, during the deliberations leading up to the decision, at least one commissioner asked whether operators were certain where the Benzene originated, whether it was natural or the result of drilling the Marlin well, Kropatsch said.

“It could be naturally occurring,” Kropatsch said. North of the Marlin disposal well “the Madison is a producer of sour gas” — which contains hydrogen sulfide and, potentially, benzene —  he said.

Drilling the Marlin disposal well could have contaminated the aquifer with oil-based drilling mud, he said. Such contamination could be temporary and removed with proper flushing of the well, he said.

Aethon’s application rejects the possibility benzene came from drilling the Marlin well. The aquifer “has not been impacted by man-made chemicals or activities,” it states.

Powder River’s Morrison disagrees. “It’s not naturally occurring,” she said of the benzene, “that’s for dang sure.”

New operator

During the yearslong effort to authorize the disposal well, Aethon and Red Bird Capital Partners in 2015 bought EnCana’s Moneta stakes. Aethon applied for the exemption again Aug. 14 this year.

“Aethon has gone back and done additional work,” Kropatsch said, giving it grounds for another hearing. The commission could grant the aquifer exemption for several reasons, including that the Madison’s depth and location make it impractical to develop as a water source. If Benzene is naturally in the water and not something that could be easily flushed, it would add to that impracticality, Kropatsch said.

Aethon’s application states that three samples of water recovered from the Madison formation from the Marlin disposal well contained from 18 to 110 micrograms per liter (parts per billion) of benzene. The federal maximum concentration level is 5 ug/l.

The value of pure Madison formation water is evident in Gillette, where the city built a 42-mile-long pipeline to neighboring Crook County to tap the aquifer. The Madison is estimated to provide the city of 32,000 residents with up to 17 million gallons a day and ensure capacity for the city to grow, according to widespread reporting.

A recent expansion of the Gillette water well field and pipeline has been called, at $217 million, the most expensive water infrastructure project in the state. The Madison formation Gillette tapped is some 2,000 to 3,000 feet deep, compared to the 15,000-foot depth in Fremont County.

Aethon reviewed the practicality and need for developing the Madison formation for drinking water for nearby towns and cities in a study revised in 2020. A water well would cost $3 million to drill, the four-page analysis states, and other water is available at shallower depths at a lower cost.

The study said it is unlikely that Shoshoni, 30 miles away, Riverton, 45 miles away, Thermopolis, 50 miles away and Casper, 70 miles away, would utilize water from the already-drilled Marlin “proposed disposal well.”

0.5% fix 

The U.S. Bureau of Land Management in August approved Aethon’s request to expand the Moneta Divide gas- and oilfield by 4,250 wells but didn’t resolve the challenge of disposing tainted “produced water.” Aethon would pump up, or produce, as many as 58.8 million gallons (1.4 million barrels) a day during peak development, the BLM wrote in its approval.

Aethon hasn’t settled on how to properly dispose of the tainted flows. Wyoming DEQ recently approved surface disposal of about 2 million gallons a day, far fewer than the 8.27 million gallons the company and oilfield partner Burlington Resources originally sought.

“Aethon Energy is evaluating the new permit requirements and is committed to working with the WDEQ to meet these for the continued protection of the environment,” an Aethon spokeswoman wrote WyoFile regarding that permit.

Aethon also would use 160 shallower disposal wells at two Moneta Divide “disposal areas” to get rid of produced water, according to the BLM. The agency’s geologic receiving formations can only handle 13.4 million gallons a day, according to federal documents.

The BLM also approved up to 10 permanent and 20 temporary water treatment plants for the anticipated expansion plans. Disposing of cleaned, unpolluted produced water is simpler to authorize than the discharge of tainted flows, but treatment can be expensive and complicated.

The existing “Neptune Facility” water treatment plant at Moneta, once heralded as a solution to some disposal challenges, “has become inoperable due to some ongoing technical issues,” the DEQ has said.

Aethon also could let some of the water evaporate from ponds and then deal with concentrated, contaminated residue. The BLM also authorized construction of a 48-inch diameter pipeline from the Moneta field to Boysen Reservoir for the disposal of produced water.

Aethon would have to secure Wyoming DEQ permission to use a pipeline to dump effluents into Boysen Reservoir, located in a state park. The reservoir releases water into the federally protected Class I Wind River where degradation of water quality is prohibited. The Town of Thermopolis draws drinking water from downstream of the reservoir.

Between its recent DEQ surface discharge permit of about 2 million gallons a day and the 13.4 million gallons a day the BLM anticipates could be handled in the 160-well disposal areas, there’s a firm plan for disposing only a total of 15.4 million gallons a day.

That accounts for 28% of the produced water that would be generated daily during full development, according to calculations made from BLM’s approval. That appears to leave another 43 million gallons a day for which there is no approved disposal.

Without authorization to discharge produced water, Aethon would have to curtail its pace of development and even shut in gas and oil wells, the BLM said. The Marlin solution would appear to resolve a fraction of the disposal problem.

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Aethon’s application states that the Madison formation could receive an average of about 302,400 gallons of produced water a day. That’s about 0.5% of what the BLM says the field would produce daily during peak development.

Aethon contends in its application that it has met requirements for obtaining the disposal permit.

Morrison argues that oil and gas are actually the resources that aren’t fit for development at Moneta Divide. “It isn’t economical,” she said of the Moneta Divide plan, “unless they can pollute our freshwater resources.”