Comments sought on oil well development assessment

Kelly Sloan

Kelly Sloan, The Business Times

Public comments will be accepted through July 31 on an environmental assessment of plans to drill more than 100 oil wells south of Palisade.

The U.S. Bureau of Land Management recently completed its preliminary environmental assessment of a proposal submitted by Fram Operating to drill oil wells on 12 pads in a 26,000-acre area  of Mesa County. All but one of the pads would be located on BLM land.

The wells will target oil in the Dakota formation and are expected to produce up to 8.7 million barrels of oil over the estimated 20-year productive life of the project. Fram estimates single well production to begin at 50 barrels per day.

Since the wells will be located on federal land, production from them will generate federal mineral lease royalties, along with severance and property taxes. Given expected production, each well would generate nearly $53,000 in annual royalties, which are split between the federal and state governments. Of the state share, almost half goes to education, with the remainder going to assist communities affected by energy development.

Natural gas likely will be produced along with the oil, but in insufficient quantities to be commercially gathered and sold.

According to the environmental assessment, natural gas in the area contains inert nitrogen and carbon dioxide that require expensive treatment to remove and, at the current low prices, uneconomical to sell. Instead, any gas produced will be used to power surface equipment and could be re-injected at a future date to increase field pressure.

Fram plans to purchase water for drilling, pressure testing and dust control from the City of Grand Junction. An estimated 1,950 barrels of water will be required per well drilled.

The company doesn’t plan to use water for hydraulic fracturing of wells. If fracturing is required, a carbon dioxide and methane mix will be used instead.

Fram estimates a work force of 54 will be required during the construction, drilling and completion phases, with an additional 15 workers if fracturing is required. A work force of 21 will be required during the operation phase, including pumpers and oil truck drivers.

Fram expects local workers to comprise about half the construction phase work force and the entire operations work force.

The BLM assessment analyzes the Fram proposal, which includes a northern access route to minimize traffic in some big-game winter habitats as well as a “single access” alternative that would not include such a route and prohibit activity during winter months.

 

The environmental assessment of the Fram proposal is available online at: www.blm.gov/co/st/en/fo/gjfo/energy/proposed_whitewater.html

Public comments can be submitted through July 31 by e-mail to BLM_CO_GJ_Public_Comments@blm.gov or by mail to 2815 H Road, Grand Junction, CO 81506. 

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Kelly Sloan is a Grand Junction resident, freelance journalist, small business owner and Centennial Institute fellow on energy and economic policy. He specializes in public policy and political communications.
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Posted by on Jul 10 2013. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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