1

MEMORANDUM 

TO: Public Record for the 2010 Effluent Guidelines Program Plan 

 EPA Docket Number EPA-HQ-OW-2008-0517 (www.regulations.gov) 

FROM: Carey A. Johnston, P.E. 

USEPA/OW/OST 

ph: (202) 566-1014 

johnston.carey@epa.gov 

DATE: 31 December 2009 

SUBJECT: Notes from the 16 December 2009 Meeting with Coalbed Methane Operators 

(Casper, Wyoming). 

The Environmental Protection Agency (EPA) met with coalbed methane (CBM) 

extraction operators at the Wyoming Oil and Gas Conservation Commission building in 

Casper, Wyoming, on 16 December 2009. The meeting was requested by the Petroleum 

Association of Wyoming (PAW). The purpose of the meeting was to address questions 

from recipients of the EPA industry survey of CBM operators: “Detailed Questionnaire 

for the Coalbed Methane Extraction Sector” (OMB No. 2040-0279). 

Mr. Carey Johnston and Mr. James Covington gave a presentation on the most common 

questions about the EPA Detailed Survey. See Attachment A. 

EPA also solicited questions from meeting participants. These comments and questions 

included the following. 

• Mr. Joe Icenogle suggested that EPA review the landowner comments made to 

the Montana's Board of Environmental Review (BER) as part of their rulemaking 

to amend certain administrative rules specifying water quality standards. 

• Mr. Neal Neumiller suggested that EPA provide guidance on how to address 

multiple owners on individual CBM projects in responding the EPA Detailed 

Survey. Mr. Neumiller is an owner/operator of a CBM project but his ownership 

portion of the CBM project is as a minority owner. 

• Mr. Jim Enochs made a request for an electronic format of the survey, which he 

can use for multiple projects. 

• Mr. Icenogle suggested that survey respondents share their NPDES permit 

numbers with EPA to test whether EPA could download DMR data directly from 

State or EPA databases (e.g., MT0030457, MT0030724). This would reduce the 

response burden on operators. Mr. Johnston requested that operators send EPA 

some NPDES permit numbers to test the feasibility of this option. 
2

• Mr. Jim Shaffer requested clarification on the words ‘independent’ (Question B2-

1) and ‘immediate’ (Question B2-16). Specifically, do these two terms refer to the 

same operator? He requested clarification in the form of an e-mail from EPA. 

• Mr. Shaffer also wanted to know if he should skip from Question B2-10 to B2-14 

for his response. 

• Mr. Icenogle suggested that EPA coordinate with PAW to compile all the 

environmental studies for the Powder River Basin. Mr. Icenogle suggested that 

this would be a more efficient method of gathering such data and also reduce the 

burden on operators. 
Attachment A 

Questions and Answers for EPA’s Clean Water Act Industry Survey for the 

Coalbed Methane (CBM) Extraction Sector 
Questions and Answers for EPA’s Clean Wate

Id t n us ry Survey for the C lb d oa e M th e ane (C

Extraction Sector

Casper, Wyoming

16 December 2009
Meeting Agenda

Opening/Introductions - 9AMOverview and Update on EPA’s Study and Survey/Schedule - 9:10ADiscussion of Common Questions on Part B (Economics) - 9:20AM

+ EPA will review Q's and A's from questions submitted via the hotli+ EPA will solicit questions from the meeting participants on Part B

Discussion of Common Questions on Part C (Engineering) Discussion of Common Questions on Part C (Engineering) - 10:20A

10:20A

+ EPA will review Q's and A's from questions submitted via the hotli+ EPA will solicit questions from the meeting participants on Part C

Oth Q ti f M ti P ti i t Other Questions from Meeting Participants - 11AMBreak - 12noon to 1PMOne-to-One Individual Sessions With Operators (1PM - 5PM)
Additional Assistance

• EPA can schedule separate teleconferences with individua

operators or groups of operators as requested. 

• Survey respondents wishing to schedule an individual ses

EPA may do so by sending an e-mail to the Detailed Surv

(800-864-9230 or cbmdetailed@pgenv.com).

• We are reviewing and approving extensions to the survey 

deadline. 

• Please contact Carey Johnston (202-566-1014 or johnston.carey@epa.gov) if you will not be able to meet th

deadline and have not yet requested an extension. 

• We appreciate your effort and time to complete the Detaile

Our goal is to minimize the burden of responding to the su

way that also matches our obligations under the Clean Waway that also matches our obligations under the Clean Wa
Purpose of the EPA’s Study on CB

• Rationale for Detailed Study: 

Produced Water Management

y

– Growing industry sector and potential impacts on 

the environment.

– Impacts to surface waters from discharge of 

CBM produced water can depend on the quantity and quality of the CBM produced water. 

• Objectives and Scope of the Detailed Study: 

– Evaluate availability and affordability of technology 

options for CBM produced water discharges in the current and future CBM basins. 

– Evaluate potential environmental issues associated 

with the discharge of CBM produced water.

CBM P

Gathe
CWA 304(m) Detailed Study: Coalbed Methane E

• Major Tasks for Data Collection and Analysis:

– Industry survey to collect technical, economic, and environmental d

ran

g p e of CBM o

perations across the Nation.

– Site Visits & misc. secondary data sources (e.g., DOE/EIA data)– Stakeholder meetings in the major CBM basins.– EPA has contacted over 700 people in eight states in over 70 outrea

collection activities since 2007. 

• Stakeholders: 

– So far: API, regional trade associations, individual companies, treat

vendors, DOE, BuRec, BLM, States, Landowners, Indian Nations 

• Schedule: 

– Approval from OMB to distribute the mandatory survey on 18 Febru– First Phase (Screener Questionnaire) distributed to approximately 2

(that have three or more CBM wells) on February 27th. 

– Second Phase (Detailed Questionnaire) distributed to approximately 

projects on October 30th. Operators have 60 days to respond to sur

– EPA will analyze the survey results and identify whether to initiate a 

the final 2010 Effluent Guidelines Program Plan (October 2010). 
EPA CBM Detailed Study: Screener Data Summa

• EPA compiled data from screener questionnaires and State data to iden

operators managing three or more wells and 58 operators managing onwells (= 274 operators total).

• EPA identified that there were 56,049 CBM wells in 2008 that operators 

in 692 different CBM projects. 

• This CBM 

p p pp y 

roduction, 2.0 trillion cubic feet, re

presents approximatel

y 7.

of the total U.S. natural gas production in 2008. 

• The 692 CBM projects are located in 16 different CBM basins across the 

but are mainly concentrated in Wyoming, New Mexico, Alabama, and Ap

• CBM projects ranged from over 2,000 CBM wells to 1 CBM well. Nationw

medium and large businesses have 28% of the projects (by number) bu79% of the gas production.

• EPA used these data to draw a representative sample of CBM projects. 

detailed questionnaire will collect financial and technical data on approx250 CBM methane projects across the country.
Distribution of CBM Projects (Operator Size, Discharge Statu

Not Small Operator Small Operator Small Operator

(Discharge)

15%

Not-Small Operator

(No Discharge)

15%

Not-Small Oper

(Discharge)

13%

Small Operator

(No Discharge)

57%
Distribution of CBM Gas Production (Operator Size, Discharge Sta

S ll O t Small Operator

(Discharge)

7%

Not Small Operator

Not-Small Opera

(Discharge)

33%

Not-Small Operator

(No Discharge)

46%

Small Operator 

(No Discharge)

14%
EPA CBM Detailed Study: Screener Data Summa

Produced Water Management Method for Selected Basin

(Percentage of Reported CBM Production)
CWA 304(m) Detailed Study: Industry Survey

• Stratification variables for selecting detailed questionnaire 

respondents include:

– Basin: Geological and regional differences Basin: Geological and regional differences

+ Collapsed small basins within state+ Split Powder River Basin into Montana, Wyoming

– Business size: Small business impacts– Discharge practices within two basins:

+ Powder River Basin in Wyoming+ Appalachian+ Most other basin tend to have one main method for prod+ Most other basin tend to have one main method for prod

water management (discharge or zero discharge). 

• In the final design of the survey draw EPA focused on bas

dischargers.

• EPA also excluded basins from the draw that could not be 

model potential future CBM basins and were entirely commodel potential future CBM basins and were entirely com

of zero dischargers.
CWA 304(m) Detailed Study: Industry Survey

• EPA used pie charts in evaluating the potential burden of the de

q p ( pj 

uestionnaire on o

perators (in terms of number of 

projects and 

production).

• For example, the following charts show the distribution of small 

businesses that discharge produced water in the Powder River businesses that discharge produced water in the Powder River 

Wyoming:- One operator had 48 of the 85 projects.- Two operators contributed 50% of the gas.

% projects/operator: %gas/operator:
Purpose of the Data Collectio

Collectio

• The financial financial data collected collected in Part B will be u

determine:

3⁄4Current financial conditions in the CBM industry3⁄4Potential impacts on the viability of firms produc

3⁄4Potential impacts on the viability of CBM projects

and into the future

3⁄4Potential impacts on overall gas production in bas

where produced produced water discharge discharge is currently currently occu

occu

3⁄4Potential impacts on U.S. gas production
Purpose of the Data Collectio

Collectio

• The technical technical data collected collected in Part C will b

to determine:

3⁄4Characteristics of CBM produced water3⁄4Potential environmental impacts

3⁄4Existing management, beneficial use, and disp

practices for CBM prod d uce water, and rel d ate 
PART

B
Firm Financial Data

• If you are a small business, remember that EPA will e

accounting information for you, but we need your ac

reports or tax returns for 2006, 2007, and 2008

• If you only t k ruc for commerci l a di l sposa in a Class II 

well or otherwise inject all your produced water from 

operations in all basins you operate in, you do not ne

complete questions B2‐17 through B2‐25

• Estimates are fine. EPA only needs an approximate id

your CBM revenues revenues relative relative to your total revenues revenues, f

example
Overview Overview of Project Project‐Specific Specific Data

• Make sure all costs that are excluded from Part C are 

in Part B and that costs requested in Part C are NOT in Part B—Part C costs will be reviewed later in these 

• EPA asks many questions ab t ou unusual expenditure

are costs that are only rarely, if ever, incurred:

3⁄4 EPA needs to know what costs should be projected every y

future; unusual expenditures should not be projected this w

3⁄4 EPA needs to know if they should be treated like a capital e

or expensed to model your project’s tax burden
Overview Overview of Project Project‐Specific Specific Data

• If you think a cost was incurred that is unlikely to occ

future or might occur only very rarely, please include 

unusual expenditure

• If you cannot figure out where to put a cost item, pu

item and its cost in a comment, provide an explanatinecessary, and EPA will determine where it should go

• Comments explaining any miscellaneous costs, unus

expenditures or any situations that might affect your

operations going forward forward are welcome welcome
Project Project‐Specific Specific Data (Table B‐1)

• If you commingle CBM with conventional gas at a pro

wh h et er commingl de within wellbores or as part of y

economic definition of project, you are still required the detailed questionnaire for your project

• Q ti ues ons pertii a n ng to commi li ng ng are i ldd nc u ed to 

sort out the CBM portion of your project

• If you have any question about whether your commi

project project is tr l u y a CBM project project, please call the helplin

helplin

• If your project was begun prior to 2004 (any part of i

one well, other than lease acquisition) or you acquir

part of the project project (other than the undeveloped undeveloped leas

leas

remember that you can skip ALL of Table B‐2 (pages 

19).
Project Project‐Specific Specific Data (Table B‐2)

• EPA is collecting data in this table to determine the c

revenues from project start‐up so that financial mod

new projects can be developed

• Any miscellaneous miscellaneous project project costs that are capitalized capitalized 

amortized (i.e., only partially deducted in the year in

AND that are not specifically identified in a question 

drilling drilling costs, unusual unusual expenditures) expenditures) can be placed in 

B3‐23

• Any miscellaneous project costs that are expensed in 

incurred incurred and recur regularly regularly AND that are not specif

specif

identified in a question (e.g., unusual expenditures) 

placed in Question B3‐34
Project Project‐Specific Specific Data (Table B‐3)

• Table B‐3 addresses only 2008 costs• Any miscellaneous costs (as in the previous slide) tha

capitalized/amortized can be placed in Question B‐4

• Any miscellaneous costs that are expensed can be pl

Question B‐50

• These miscellaneous miscellaneous costs can include include any costs or fe

would affect how you would calculate net revenues f

project (other than those specifically identified, e.g.,

severance) or are prod i uct on costs not el h sew ere sp
Financial Projections

• EPA realizes that pj g ro ecting future plans and product

very difficult and inexact

• Key pieces of information are your drilling plans and 

of how long your proj t ec mi ht g operate given curren

conditions

• Any data you can provide will help refine estimates o

production—the more you can provide, the better Eestimates will be
PART

C
Produced Water Management System (P

• PWMS is defined as a system that is managed by the

operator operator as a single unit for produced produced water managem

managem

• A PWMS may:

3⁄4Include different treatment, transfer to disposal locations, a

reuse practices.

3⁄4Treat water from a lease, field, project, or plan of developm

(POD). Water discharge permits, land application permits, a

applications for permits to drill (APD) typically use one of th

terms to define the well grouping.

3⁄4Serve the same or different wells from the CBM project def

Part A.
Produced Water Management System (P

• A PWMS can have multiple disposal options but it is m

a single unit.

3⁄4For example, an operator may use a combination of stock ta

irrigation, and storage ponds on a single PWMS.

• A PWMS does not i ld nc u e the prod d uce water gath 

er 

(e.g., piping or trucking) that is used to transport the 

water between the CBM wellhead and a centralized lo

(e.g., treatment unit, land application site).
Basic PWMS Diagram Examp

gfhxfgjh
Multiple PWMS Diagram Diagram Examp

Examp
Multiple Projects Projects with One PWM
PWMS Block Diagram Exampl

For each PWMS, please provide a bl k oc diagram th t a shows, or a na

description that explains, how the produced water was managed fro

well field to the PWMS in 2008.
Residuals

The solid, liquid, or mixed solid/liquid materials generated during treatment.

• Examples include: sludges and wastewaters generated from 

sedimentation, coagulation, flocculation, sedimentation, cla

precipitative precipitative softening, softening, and filter backwash backwash operations; operations; mem

mem

reject wastewaters; ion exchange resins and brine wastewate

activated carbon wastes; and other miscellaneous residuals.

• Residuals include accumulated solids, liquids, or solid‐liquid 

accumulated for batch discharge.

• Non‐contact stormwater is not considered a residual.
Undeveloped Area

• Undeveloped area is any area occupied, owned, or operated within 

site that has not been developed.

• EPA is interested in undeveloped areas within the project site that 

suitable for constructing new or additional wastewater treatment s

Undeveloped areas considered unsuitable for development may in

example, areas l td oca e on mount i a ns or any other geol i og c f t

orma 

would prevent construction.
Capital vs. Operating and Maintenan

Gath i er ng and Transportation Co

Capital cost – The costs associated with the purchase, developmen

construction of fixed assets such as land, stations, buildings, and w

treatment equipment.

Operating and Maintenance cost – The ongoing, repetitive costs ooperating a water system; for example, employee wages and costs 

treatment chemicals and periodic equipment maintenance.
Capital vs. Operating and Maintenan

Gath i er ng and Transportation Co

Gathering system – System or method used to transport produced 

between the CBM wellhead and a centralized location for treatme

disposal.
Please Remember To...

Please pay careful careful attention attention to the skip pattern pattern instructions instructions located located at th

of page C‐15

For question C4‐1, if you do not have any water quality data, please mak

comment section for Part C located on page C‐29.
Please Remember To...

Sign the Certification Certification Statement Statement in Part AUse the comment comment sections sections (located (located in Part A, Part B, and Part C)
Please Remember To...

If using the electronic version of the questionnaire, insert your Openumber in the top right hand corner

Keep a copy of your submission, in case follow‐up is required to clar

responses
Frequently Asked Questio
General or Part B Question

Question

Economics
General Helpline Questions

I have sold my p j ro ect since the screener survcompleted. Do I need to complete the detaile

questionnaire?

You are responsible for answering the questionna

unless:

• All financial data concerning the project has been prov

new owner AND

• The new owner has agreed to complete the questionna

project OR

• Special circumstances apply, which have been discusse

directly
Economics Helpline Questions

I purchased leases for the p p ur ose of develop conventional oil and gas project, but later de

a shallower coalbed methane project. Should costs be included in the survey or not?

If these costs played any role in a decision to f d orwar with the CBM proj t ec OR you i ld nc u e 

costs when calculating returns on this project

include the costs in the survey; otherwise, yo

enter $0 for lease costs; please provide a not

comments section on Page B‐37 explaining ware $0.
Economics Helpline Questions

Where can I put g g athering and compression cos• First, make sure these costs are considered a 

your development costs and operating expen

are not a part of a fee paid to the pipeline or are not a part of a fee paid to the pipeline or party firm (i.e., you cannot market the gas withis level of processing)

• If so, you can t t rea these costs (b th o capit l a a

operating) as miscellaneous costs and put the

costs in Questions B3‐23, B3‐34, B3‐49 and/o

as relevant

• Please let EPA know that you have done this 

3‐37 (Comments)
Ot

her Part

B Quest

i ? ons

?
Part C Questions

Produced Water Management
Process Flow Diagram

Is the attach de diagram and

narrative what you all had in

mind?

Generally yes. However, werequest that additional

information describing thesize of each pit and the

operational relationship

among the evaporation pitsbe included in the survey

response needed.
Commingled CBM Produced Produced Wa

I commi l ng e CBM prod d uce

water from multiple

projects. Do I need to

repeat Part C for each

project?

You only need to repeat

Part C, Sections 2 and 3 foreach produced watermanagement system thatyou operated in 2008 tomanage water from the

wells listed in Part A of the

questi i onna re.
Seasonal Discharge Variations

My collection andmanagement practices

change during the year,

what should my block

diagram reflect?

Your block diagram should

reflect these differences.

You will need to complete

Part C, Sections 2 and 3 for

each distinct management

practice.
Contractor Hauls to an Unknow

Treatment or Di l sposa System

A thi dr party contracts to h l au my

produced water for treatment. I don’t

know their treatment/disposal

methods methods. Should I enter discharge discharge to

a POTW of third party or enter hauled

off‐site?

You should enter hauled off‐site.

?
Contractor Hauls to a 3rd Party or POT

U kn nown T t t/Di l Treatment/Disposal M t

e 

A third party or POTW treats my producedwater for treatment. I don’t know

specifics of their treatment

method/disposal methods. Do I need to

f ll i out d ld etai ed information on

treatment/discharge in Part C, Section 3?

Unless you provide provide any treatment treatment prior to

sending the produced water to a third

party or POTW, you do not need to

respond to Questions C3‐9 through C3‐13.

?

p g

If you do treat the produced water prior to

sending the produced water to a third

party or POTW, then you must complete

Questions C3‐9 through C3‐13 as it relates ?

to the treatment you do provide.
Storage Methods as Treatmen

Treatmen

I discharge to impoundments/

ponds/ lagoons/ tanks before discharge,

is the storage consid d ere treatment?

Storage ponds/lagoons/tanks that holdproduced water prior to discharge are

considered to be treatment units

(because they provide equalization of

the produced produced water and can removed removed

some suspended solids).
Partial 2008 Information

We began operations in 2008. How should we complete the ques

The questionnaire questionnaire should be completed completed using the 2008 data. Pleas

the Comments section (Question C4‐3) that the management oper

initiated and that the data are provided for only a portion of 2008.
Piped Gathering System and Trucke

PWMS

What if I trucked water to my produced water management systpart of 2008, but also implemented a piped gathering system in For the part of the year that produced produced water was piped to the p

p

water management system, Questions C2‐8a through C2‐8c sho

completed. For the part of the year that produced water was tr

to the produced water management sy , stem Question C2‐8d sh

completed.
Residuals Transportation

Sh ld ou my 2008 operating and maintenance costs for my

sedimentation pond include residuals transportation and dispo

Yes, any costs associated with residual streams from the treatm

operation should be included in the op g erating and maintenance 
O ht er Part C Q i? uest ons?