HomeMy WebLinkAboutExhibit F - PC Memo RE Oil and Gas related uses and definitions1 Memo TO: PLANNING COMMISSION FROM: PLANNING STAFF DATE: JULY 10, 2013 RE: TARGETED CODE IMPROVEMENTS, SPECIFICALLY OIL AND GAS RELATED USES AND DEFINITIONS STATUS OF CODE AMENDMENTS
As part of the Board of County Commissioners (“BOCC”) ongoing review of targeted code revisions and referral of final draft amendments to the Planning Commission, several oil and gas
related topics have generated additional discussion. The topics include injection wells, water impoundments, water storage tanks and treatment facilities, and the general definition
for oil and gas drilling and production. The topics are interrelated and involve definitions, use table designations, and potentially use specific standards. The following background
information and staff analysis is presented for the Planning Commissions consideration in accordance with direction from the BOCC. BACKGROUND – INJECTION WELLS County Staff conducted
a meeting with Industry Representatives earlier this year regarding regulation of injection wells. Follow-up and ongoing dialogue with participants provided additional information and
specific responses to questions regarding injection well operations. The key issue being that most injection wells have some kind of tanks or water storage and that though injection
wells are currently a “permitted use” in certain zone districts, the placement of tanks on site with the typical capacity needed for an injection well would trigger a Limited Impact
Review. Information provided by the industry representatives is summarized below and critical to the understanding of the potential impacts of injection wells and related storage activities
and needs. • Typical tankage needs for a single injection well (supported by pipeline infrastructure) is estimated at 3,000-5,000 bbls of storage (1-2 days of storage). A second estimate
provided by industry put the overall storage typically in the 1600 bbls to 6,000 bbls range • This tankage is similar to that required for typical producing multi-well pads which have
storage of approximately 3,000-5,000 bbls of production water/tankage.
2 • Typically, tankage for injection wells is located on a COGCC approved well pad. COGCC permitted injection wells are covered by bonds with the state that are active for the life span
of the facility. • Typical mitigation practices apply to injection well storage tanks, such as SPCC compliance, secondary containment, painting to minimize visual impacts, etc. • VOCs
and odors are also controlled to ensure that tanks are compliant with CDPHE Air Pollution Control Division and COGCC requirements. • A typical COGCC permit for an injection well will
include a Site Facility Diagram which details the approximate location and configuration of tank storage. In most cases, an APD and 2A application are also filed with the COGCC, which
allows the Local Government Designee (LGD) to review the proposal and comment. • Tank sizes generally used for injection well water storage range from 400 bbls to 1500 bbls. The typical
size used in most installations is 400 bbls. • Multiple tanks are typical for an injection well, providing for gravity separation of fines that may be in the liquid and improving water
quality to avoid clogging up the injection well and reducing its usable live span. • A typical tank array would include two tanks for gravity separation and 4 tanks for water storage.
This array could serve two typical injection wells. • When water is piped to a tank facility, emergency truck load out is required so that water can be moved when pipes are unavailable
due to emergency circumstances. • Where location/proximity allows injection wells can be served by pipelines from centralized water storage facilities and do not require on-site tankage.
3 • Industry Representatives provided the following general recommendations for adjustments to the UseTables based on the amount of storage. o Injection well with less than 5,000 bbls
of storage – Permitted Use o Injection well with storage of 5,000 bbls up to 12,000 bbls -Administrative Review o Injection well with storage above 12,000 bbls – Limited Impact Review
Impacts from injection wells typically addressed through the current ULUR development review process include: a) noise; b) visual impacts such as storage tank configurations and colors;
c) lighting impacts; d) spill risks, containment, and SPCC plans; e) traffic including truck hauling and construction; f) odors and air quality permits; g) wildlife impacts; and h) site
work including storm water drainage, best management practices, and protection of water ways. TYPICAL INJECTION WELL SITE UNDER CONSTRUCTION
4 INJECTION WELLS – STAFF ANALYSIS ISSUE: The BOCC’ss code change direction on June 17th included an expansion of the term “Injection Well” and a modification to the use table. The redline
of the use table made injection wells, both by hauling and pipeline an Administrative review in the R, RS, CL, CG and I zone districts and by-right in P and RL zone districts. The definition
was expanded to allow for equipment, tankage and other uses to also be included in the injection well facility when served by a pipeline. In addition, it was understood that all injection
wells have some kind of tanks on the well pad for uses including storage for gravity separation of fines for water quality improvement and volume capacity prior to injection for operational
efficiency and thus avoiding the need for hauling. Staff believes it is important to allow for the necessary storage appurtenances, but that a higher level of review may be appropriate
for larger tanks or groupings of tanks. As noted above industry representative have indicated that most injection wells operate with storage between 3,000 and 5,000 barrels. INJECTION
WELL SITE WITH OTHER ACCESSORY OPERATIONS
5 2008 as amended -Existing Definition: A well on an approved COGCC site used for pumping water, other liquids, or gases into a reservoir. Such well may be served by hauling, pipeline,
or a combination of the two. BOCC Currently Proposed Definition: A well on an approved COGCC site used for pumping water, other liquids, or gases vertical pipe in the ground into which
water, other liquids, or gases are pumped into a reservoir. Such well may be served by hauling, pipeline, or a combination of the two. A. Served by Pipeline. The water, other liquids,
or gases that are pumped into a reservoir are transported to the site through a pipe system. The injection well shall include production equipment required for operation of that injection
well including, as appropriate, pump equipment required to move water or gas downhole, filtering equipment, and critical and necessary tankage required for cleaning and processing water
prior to injection. B. Served by Hauling. The water, other liquids or gases that are pumped into a reservoir are transported to the site through trucking. TYPICAL INJECTION WELL SITE
6 DISCUSSION: By adding in the …”and critical and necessary tankage,” into the definition, any injection well with any amount of tankage would become an Administration Review in the
R, RS, CL, CG and I and a by-right use in all RL zone districts. As noted above, tanks and even more so impoundments/ponds can have significant impacts including visual, possible odor,
spillage (risk) and traffic impacts associated with hauling. RECOMMENDATION: Based on Industry Standards and to address the differing levels of impact from tank storage, staff recommends
creating a “small” category for on-pad storage of 5,000 barrels or less and creating a “large” category for on-pad storage of greater than 5,000 barrels. The Use Table could be amended
to also reflect a higher level of review for the more intensive uses (Limited Impact Review suggested) including off-pad storage uses. Current Code Draft COMBINED PRODUCTION AND INJECTION
SITE Three Production Wells & Tankage Injection Well & Tankage
7 Injection Wells, Small. A well with up to 5,000 barrels of appurtenant tanks on an approved COGCC well pad, to be used for pumping water, other liquids, or gases into a reservoir.
Such well may be served by hauling, pipeline, or a combination of the two. Injection Wells, Large. A well with greater than 5,000 barrels of appurtenant tanks on an approved COGCC well
pad to be used for pumping water, other liquids, or gases into a reservoir. Such well may be served by hauling, pipeline, or a combination of the two. INDUSTRIAL USES R RS RU RMHP CL
CG I PL RL-P RL-E RL-TS RL-GS 7-1101 EXTRACTION Injection Wells, Small with water storage < 5,000 bbls A A P P P P P 7-1001 Injection Wells, Large with water storage ≥ 5,000 bbls L L
A A A A A 7-1001 Oil and Gas Drilling and Production P P P P P P P P P P P P 7-1001 BACKGROUND – OIL AND GAS DRILLING AND PRODUCTION Public comments received at the most recent BOCC’s
public hearing on proposed Targeted Code Improvements requested clarification regarding the type of uses and activities that can be conducted on an active drilling pad. The diverse activities
are reflected in the attached photographs of typical sites. The discussion included booster compressors which can have noise and emissions implications. Also discussed were storage activities
including tanks, ponds, and impoundments. Impacts from these uses can include visual impacts, spill risks, odor/emissions, air quality, and traffic hauling implications.
8 GAS DRILLING OPERATION (DRILLING & PRODUCTION)
9 OIL AND GAS DRILLING AND PRODUCTION – STAFF ANALYSIS ISSUE: BOCC proposed changes to the Code from June 17th may have unintended consequences in regard to oil and gas facilities, specifically
water impoundments/tanks, compression and storage. The Code currently deals with water impoundments (including tanks), compression and storage under their own use categories; however,
as proposed in the BOCC referral draft, these uses may be included as by-right uses under Oil and Gas Drilling and Production. Staff believes there will be conflict between the provisions
of the Code in regard to these three specific uses. The definitions for Oil and Gas Drilling and Production are as follows: 2008 as Amended -Existing Definition: Any operation utilizing
equipment that advances a borehole into substrata for the purpose of discovery, development, and/or production of oil or gas. BOCC Currently Proposed Definition: Any operation utilizing
equipment that advances a borehole into substrata for the purpose of discovery, development, and/or production GAS DRILLING OPERATION (DRILLING & PRODUCTION)
10 of oil or gas, including all surface facilities associated with such operations. This activity includes surface or tank produced water and condensate impoundments, all storage, separation,
treating, dehydration, power supply, compression, pumping, metering, monitoring, flowline and other equipment directly associated with oil and gas production wells. DISCUSSION: By including
“surface or tank produced water and condensate impoundment,” it would mean that all impoundments (excluding fresh water impoundments,) on or off the well pad, would fall under the definition
of Oil and Gas Drilling and Production so long as they were associated with advancing the borehole. It could be interpreted that most, if not all, impoundments are related to this activity
and thus would become an Exempt use per the Use Table. The County currently reviews water impoundments as an Industrial Use with a Limited Impact review in the R, I and all RL zone districts.
By including “all storage” in this definition, it may be interpreted that this includes ALL storage that occurs on or off a well pad. This will conflict with the County’s definition
of storage and may render industry-related storage as a by-right use under the Oil and Gas Drilling and Production definition. The Code currently views storage as a Limited Impact review
in the R zone district, an Administrative Review in all RL zone districts, and a by-right use in the CL, CG, I and PL zone districts. By including “compression” in this definition, it
may be interpreted that all types of compression may be allowed on or off the well pad that are directly related to Oil and Gas Drilling and Production. This would include a range of
compressor types from small enclosed well head compressors to large compressor facilities such as the Mamm Creek compressor station. RECOMMENDATION: -Revise definition to exclude water
impoundments except as directly related to the drilling and production operation on the COGCC well pad and in tanks. -Remove storage from definition. -Remove compression from definition.
11 REVISED DEFINITION: Oil and Gas Drilling and Production: Any operation utilizing equipment that advances a borehole into substrata for the purpose of discovery, development, and/or
production of oil or gas, and the appurtenant and accessory equipment utilized exclusively for drilling and production activities on a well pad. BACKGROUND – WATER IMPOUNDMENTS Recent
discussions during the BOCC’s Public Hearings on the proposed Targeted Code Improvements and Planning Staff follow-up have identified inconsistencies in the way the code defines different
types of water storage and impoundment categories. Article 16, Definitions are being discussed for the purpose of clarifying differences between industrial impoundments/storage, water
treatment or domestic water system storage, and agricultural storage and irrigation features. Differing impacts associated with open pits, ponds and tank storage are also being considered.
WATER IMPOUNDMENT – POND UNDER CONSTRUCTION
12 WATER IMPOUNDMENT – STAFF ANALYSIS ISSUE: In general most gas wells have appurtenant tank storage and other devices on the well pad that are not accounted for in the current definition
of water impoundment. This means that these appurtenant uses may be interpreted to require their own review (e.g. Limited in the Resource Lands Zone District). 2008 as amended -Existing
Definition: Surface storage and water tank storage including wastewater treatment settling ponds, surface mining ponds, detention and retention ponds, artificial lakes and ponds, water
tanks and similar water storage and/or treatment facilities. Water Impoundment also includes surface or tank produced water and condensate impoundments, as those terms are used by the
oil and gas industry. BOCC Currently Proposed Definition: Surface storage and water tank storage including wastewater treatment settling ponds, surface mining ponds, detention and retention
ponds, artificial lakes and ponds, water tanks and similar water storage and/or treatment facilities. Water Impoundment also includes excludes surface or tank produced water and condensate
impoundments, as included in Oil and Gas Drilling and Production. those terms are used by the oil and gas industry. TYPICAL COMMUNITY WATER STORAGE FOR DRINKING WATER
13 DISCUSSION: As noted in the excerpt from the Use Table shown below, a Water Impoundment, when allowed, requires a Limited Impact Review in most zone districts. This seems to be an
appropriate fit for significant installations that have a broader range of potential impacts and can be proposed in new locations, with new impacts, off of existing well pads. Currently
proposed changes to the definition and the Staff recommendation shown below attempt to clarify the definition use and exclude storage on well pads associated with injection wells and/or
drilling and production. This differentiation for smaller facilities on well pads is felt to be appropriate as they are already subject to COGCC regulation and permitting requirements.
RECOMMENDATION: Revise Definition to read as follows: Water Impoundment: Confined water such as surface pits or ponds storage and water tanks used for wastewater treatment settling ponds,
surface mining ponds, detention and retention ponds, artificial lakes and ponds (not related to agriculture), and water tanks and similar water storage and/or treatment facilities. Water
Impoundment also includes surface or tank produced water and condensate impoundments. Water Impoundment excludes tanks on a well pad used exclusively for activities associated Injection
Wells. as those terms are used by the oil and gas industry. WATER TANK OR TREATMENT FACILITY – STAFF ANALYSIS 2008 as amended -Existing Definition: A facility exceeding 50,000 gallons
or more for purifying, supplying, and holding water. Discussion: The terminology has generated some conflicts due to the overlap with the Water Impoundment definition that also includes
“Water tanks” and “holding and supplying water.” Staff believes the intent of the definition is related to water storage for domestic or community water systems. With minor edits to
the definition the distinction between a Water Tank or Treatment Facility and a Water Impoundment can be clarified. Recommendation: Clarify definition to reflect intent that these uses
fall under Utilities, are related to holding or treating water for domestic water supply. Modify definition as follows:
14 Water Tank or Treatment Facility. A facility exceeding 50,000 gallons or more for purifying, supplying, and holding water related to supplying drinking water. TYPICAL COMMUNITY WATER
STORAGE
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