Colorado proposes methane detection
Methane emissions may soon be monitored according to new rules proposed by the Colorado Department of Public Health and Environment (CDPHE) in early November. The proposed rules were derived from the state's Air Quality Control Division as a joint effort between the Environmental Defense Fund and operators such as Encana, Noble Energy, and Anadarko Petroleum.
Governor John Hickenlooper was quoted as saying, "The rules will help Colorado prepare for anticipated growth in energy development." The new rules address a wider range of emissions that before now have not been directly regulated. The rules are currently subject to further input but are designed to give the state oversight for monitoring, controlling, and reducing methane leaks and volatile organic compounds.
The rules call for infrared leak detection from tanks, pipelines, and other drilling and production processes. Instrument-based monthly inspections for larger sources of emissions also will be required. The new rules will feature an aggressive timeline for repairing leaks discovered through detection. In addition, emission reduction provisions that normally only apply in non-attainment areas will be expanded statewide.
CDPHE estimates the new rules will reduce VOC emissions in Colorado by approximately 92,000 tons per year, which would be a 34% reduction based on its 2011 inventory. The public comment period was ongoing at the time of this writing.
Three Colorado cities suspend fracing
Residents of Boulder, Lafayette, and Fort Collins, Colo., voted Nov. 5 to ban or temporarily delay hydraulic fracturing within city limits, representing a setback for unconventional resource development in the region. A similar anti-fracing measure on the ballot in the City of Broomfield was defeated by a narrow margin.
There are approximately 141 active wells located across the four areas weighing in on the drilling technique, a considerably small portion of the 51,398 active wells statewide as of October 2013, the Colorado Oil & Gas Conservation Commission reports. Underlying Fort Collins, where 56% of voters approved a 5-year moratorium, is the Niobrara shale play.
Colorado has an estimated 2 billion bbls of oil, and oil and gas production has increased since 2010 to 182,000 b/d, according to the US Energy Information Administration.
Notwithstanding the state's prolific resources and output gains, the oil and gas industry and local communities have had to recover from recent setbacks in the form of flooded wells and associated damage – including 43,000 gal of spilled condensate – due to heavy rainfall last September.
Last year, Longmont was the first Colorado city to ban fracing after a 60-40 margin vote, the ruling of which is being legally contested by the Colorado Oil and Gas Association and State of Colorado.
Niobrara gas well comes on strong
WPX Energy has completed its second well in the Niobrara shale following an initial gas discovery in western Colorado earlier this year that produced 2 Bcf over a 10-month period and is currently producing at a rate of 3.5 MMcfd, the company reported in a press release.
The second well, which was drilled to 9,062 ft true vertical depth with a 4,883-ft horizontal lateral, was completed at an initial rate of 11.8 MMcfd at a flowing casing pressure of 5,700 psi. The well has since been choked back to 8 MMcfd at 5,400 psi.
WPX drilled a third Niobrara horizontal well in mid-2013. A potential sidetrack lateral is being considered, the company said, and two additional Niobrara wells are planned for November.
The company holds approximately 180,000 net acres in the Niobrara/Mancos play underlying its leasehold position in the Piceance basin.
EE3 Completes Record Niobrara Horizontal
The Hebron #3-12H well has come online at the highest reported 24-hour initial production rate for a horizontal Niobrara well drilled in the North Park Basin, according to EE3.
The well was drilled to a true vertical depth of 6,388 ft before being completed with a 4,100-ft lateral in the Niobrara D bench. The well flowed approximately 1,054 bbls of oil in a 24-hour test period, with 400 psi flowing casing pressure on a 48/64th-in. choke.
EE3's 100%-operated Hebron #3-12H is located in Section 12, Township 7 North, Range 81 West of Jackson County, Colo., in the central North Park basin.
Colorado enforces frac fluid disclosure
Colorado oil and gas regulators were expected to begin taking action against companies suspected of not fully complying with the state's disclosure rule for chemicals used in hydraulic fracturing, the Grand Junction Daily Sentinel reported in October.
The rule, which was unanimously approved in 2011 by the Colorado Oil and Gas Conservation Commission, requires operators to disclose all chemicals used in fracing as well as their concentrations.
Minor violations from 11 designated companies primarily involved missing or otherwise unfiled reports for only a handful of wells or, in some cases, a single well.
Commission staff have reached settlement agreements with most of the companies under which they would pay $1,000 fines per well, rather than the $10,000 fine per well that is possible, if the commission approves the agreements, the media outlet reported.
New plant serves DJ Basin production
DCP Midstream Partners LP's new O'Connor Plant (formerly the LaSalle Plant) is now in commercial operation.
The plant is a deep-cut cryogenic, natural gas processing unit located near Kersey, Colo., in the D-J basin, which is part of the growing Niobrara shale formation. The company named the plant in honor of Tom O'Connor, chairman of the board at DCP Midstream Partners, and former CEO and chairman of DCP Midstream LLC.
Part of an eight-plant system owned and operated by the DCP enterprise, the O'Connor Plant has approximately 600 MMcfd of total capacity and an initial capacity of 110 MMcfd. Expansion to 160 MMcfd is expected to be completed in the first half of 2014.
Texas Express Pipeline Comes Online
Enterprise Products Partners LP has initiated service on its operated Texas Express natural gas liquids (NGL) pipeline from Skellytown, Tex., to an NGL fractionation and storage complex in Mont Belvieu, Tex.
The pipeline will provide additional takeaway capacity to West and Central Texas, the Rocky Mountains, southern Oklahoma, the Midcontinent, and the D-J basin and improves access to the largest NGL trading hub in the US located along the Gulf Coast.
NGL volumes from the Rockies, Permian Basin, and Midcontinent regions will be transported to the Texas Express mainline through Enterprise's Mid-America Pipeline system between the Conway hub and its Hobbs facility in Gaines Co., Tex. NGL volumes from the D-J basin will be transported to the Texas Express mainline by the Front Range Pipeline (owned by a joint venture among Enterprise, Anadarko Petroleum, and DCP Midstream Partners, each with a one-third interest), which is under construction and expected to be in-service in the first quarter 2014.
The 583-mile pipeline has an initial capacity of approximately 280,000 b/d and can be expanded to approximately 400,000 b/d.
Enterprise and Enbridge Energy Partners each hold a 35% interest in Texas Express Pipeline LLC, Anadarko holds a 20% ownership interest, and DCP Midstream Partners owns the remaining 10% stake.