## SANDIA REPORT

SAND2006-0312
Unlimited Release Printed January 2006



# Technical Review of Proposed Changes in Montana Water Quality Standards for
Coal Bed Natural Gas Produced Water

Allan R. Sattler, Malynda A. Aragon, M. Michael Hightower

Prepar ed b y Sand ia Nati on al La borat ories
Albu quer qu e, Ne w Me xic o 8 718 5 an d Liver m ore, Calif orni a 9455 0

Sand ia is a mu ltipro gram la bo rato r y oper ated b y Sa ndi a Cor porati on, a Lockh ee d Martin Com pan y, for the Un ited States Depart m ent of Energ y ’s
Natio nal N u cle a r Securit y Ad ministratio n un der Co ntract DE-AC04- 94AL 8 500 0

.

Approv ed for p ublic r e le ase; fu rther diss emi natio n un limite d

.

1Is s u ed b y S a ndi a Nat i onal L a bo ratori es , op erat e d for th e Uni t e d S t at es Depar t m e nt of En erg y b y Sandia Corpor ation.

NOTICE: This report was prep ared as an acco unt of work sponsored b y an ag ency of th e United
S t ates Governm e nt. Ne ither th e United S t at es G overnm e nt, nor an y ag enc y the r eof, no r an y of t h eir emplo y ees, nor an y of their co ntractors, subco n tr actors, or their emplo y ees, make an y war r a nty

, express or implied, or assume an y legal liability or responsibility for the accuracy , completen e ss, or usefulness of an y information

, apparatus, product, or pro cess disclosed, or r e present that its use would not infring e priv ately owned righ ts. Refer e nce herein to an y specific commercial p r oduct, pro cess, or

s e rvice b y trad e nam e , tra d em ark

, m a nufac turer

, or ot herwise, do es not necessari ly c onsti t u te or imply its endorsement, recommendatio n, or f a voring b y the United States Government, an y agen cy th er eof,

or an y of their contractors or subcontractors. The views and opinions expressed herein do not

neces s a ri l y s t ate or reflect thos e of the United S t ates Governm e nt, an y agen c y th ereof, or an y of t h ei r
contractors.

Printed in th e United States o f America. Th is report has b e en reproduced d i rectly from th e best

avai labl e cop y

.

Availab l e to DO E and DOE con t ractors f r om U.S. Depar t ment of En erg y Offi c e of Sc ie nt ifi c a nd Techn i cal Information

P.O. Box 62 Oak Ridge, TN 37831

Telephone: (865)576-84 01
Facsimile: (865)576-57 28
E-Mail: reports@adonis.osti.gov
Online ord e ring: http://www.osti.gov/b r idge

Availab l e to the public from U.S. Depar t ment of Commerce
Nationa l T echn i cal Inform ation S e rvice

5285 Port Ro y a l Rd Springfield , VA 22161

Telephone: (800)553-68 47
Facsimile: (703)605-69 00
E-Mail: orders@ntis.fedworld

. gov Onl i n e orde r: http://www.n tis.gov/h e lp/ord ermethods.asp ? l o c =7-4-0#online

2SAND2006-0312
Unlim ited Releas e Printed January 2006



### TECHNI CAL REVIEW OF PR OPOSED CHANGES I N

MONTANA WATER QUALIT Y STANDARDS FOR
COAL BED NATURAL GAS PRODUCED W A TER

Allan Sattle r Geotechnology and Engineering Departm e nt

Malynda Aragon
Geochem i stry Departm e nt

Mike Hightower Energy System s Analysis Departm e nt

Sandia National Laboratories

P.O. Box 5800 Albuquerque, New Mexico

January 2006

ABSTRACT

In Novem b er 2005, t h e United States Department of Energ y req u ested that Sandia National Laboratories provide a technical review and eval uation of pr opos ed changes in the Monta n a Water Quality Standards related to Coal Bed N a tural G as produced water treatm e nt and discharge. The goal
of Sandia’s technical evaluation was to assist the Departm e nt of Energy i n under s tanding the t echnical feasibility and costs associated with m e eting the pro posed standards and the potential im pact on coal bed natural g as production in the regio n and im pact s on natural gas productio n an d supplies nat i onall y

.

This report s u mmari zes th e results of the Sandia review of the proposed standards, with a foc u s on the
technical is sues a ssoci ated with coal bed natural gas produced water reinjection and treatment. Based on our review, there appear concerns with the proposed new standards. These concern s include
inconsistencies in treated water constit uent standards, identification of treatme nt standards for arsenic
and other constituents that are not currentl y attain abl e , lack of the use of EPA r eco mmended methods to assess innovative treatment technology cost and pe rformance im pacts, li mitations on the use of

co mm only recognized alternative water m a nagement options, and identification of water treatment
levels that will make the treated wat e r highly r eactive and negatively im pact use for irrigation and
wildlife. The results of the Sandia review and th e technical evaluations of various parts of th e proposed standards are su mmariz e d in this report.

3

## ACKNOWLEDGEMENTS

The authors r eceived techn i cal, programmatic, and ed itorial suppor t on this proje c t from a num b e r of individuals and organizati ons both inside and outside Sandia. We would partic ularly like to express our than ks fo r their suppor t and gui dance in the techn i cal evaluations and develo pment of this report.

To supp ort th e technical an aly s is required for this project, the authors worked with m a ny organizations, includi ng in dustr y and sta t e and federa l agencies to collect background inform ation o n current operations, existing regula tions, and technical data.

The followin g organizatio ns were especially helpful i n supp orting our efforts, in cluding:

Bureau of Land Management – Miles City Office

Wyom ing Oil and Gas Commission

Montana Board of Oil and Gas Conservation

Montana Bur eau of Mines and Geolog y
ALL Consulting – T u lsa Oklahom a

4

## CONTENTS

ACRONYMS

....................................................................................................................... ....................... 6

1. EXECUTI VE SUMMA RY

.......................................................................................................... ......... 7

2. INTRODUCTION AND PURPOSE

................................................................................................... . 10

3. PROPOSAL TO IDENTIFY SAR AND EC AS HARMFUL

................................................................ 12

4. PROPOSAL TO REQUIRE INJ E CTIO N OF CB NG PRODUC ED WATER

...................................... 13

5. PROPOSED CBNG P R ODUCE D WATE R TR EATME NT AND DIS CHA RGE STANDA RDS

.......... 23

6. PROPOSED LIMITS ON CBNG PRO DUCED WATER MANAGEME NT OPTIONS

........................ 30

7. CONCLUSIONS

................................................................................................................ ................. 31

REFERE NCES

..................................................................................................................... ..................... 49

APPENDIX A - PROPOSED CHA NGE S TO MONT ANA WATER QUALITY REGULATIONS

............. 33

LIST OF FIGURES
Figure 1. General Geologi c Cross-se cti on of the Powder River Ba sin ................................................... 14
Figure 2. Soil Infiltration Impact based on SAR and Salinity

................................................................. .. 27
Figure 3. Crop Yield and I rrigation Wate r Salin ity

........................................................................... ........ 29

LIST OF TABLES

Table 1. Electrical Conduct i vity Ranges f o r Variou s Water Us es

............................................................. 12
Table 2. Typic a l Geologic Fo rmation Depths of the Powder River Ba s i n of M ont ana

............................. 15

Table 3. Co mpari o n s of Co mmon Wate r Q ualit y Standards with the P r opo sed Mont ana CB NG
Treatm ent Standards

............................................................................................................ ..... 24

Table 4. General Livestock Water Qualit y Requirements

......................................................................... 26

Table 5. Es timated PRB CBNG Pro duced Water Treatment Cos t s

......................................................... 28

5

## LIST OF ACRONYMS

BER Board of Environm ental Re view

CBNG Coal b ed nat ural ga s

cm Centimete r

DOE Dep a rtme nt of Energy

dS/m Dec i -Siemens per meter

EC Electri c al con ductivity

EPA United States Environment al Protection Agency

L Liter

M meter

mg Milligram s
mg/L milligram s per liter

MT Montana

NETL Nation al Energy Techn o log y Laborato r y

NPRC North e rn Plains Research Cou n cil

PRB Powde r Rive r Basin – Wyo m ing and M o ntana

S Siemens

SAR Sodium ab ru ption ration

TDS Total dissolve d solid s

WY Wyoming

μS/cm micro Siemen s per centim e t er
$K Thou san d dol lars

$M Million dollars

6

### 1. EXECUTI VE SUM M ARY

In Septem ber 2005, the Montana Board of Environm ental Review announced proposed changes to the Montana Water Quality Regulatio ns related to Coal Bed Natural Gas produced water treatment and discharge. The proposed regulations, if a dopted in their current for m , could significantly im pa ct and possibly reduce CBNG developm ent and production in

Montana. T h e im pact could also extend to CBNG production in other states, such as Wyom ing, through greater restrictions on CBNG produced water quality.

The U. S. Departm e nt of Energy (DOE) revi ewed the proposed changes and believed that they could significantly restri ct CBNG production in Montana a nd W y oming. To aid in the
evaluation and assessm ent of the proposed ch anges, the DOE requested that both Argonne National Laboratory (Argonne) and Sandia Nati onal Laboratories (Sandia) review the proposed changes and prepare written evaluations on various technical, policy, and regulatory aspects. Argonne focused on regulatory and policy issues and their inte rrelationships with technology, and Sandia focused on major technical issues associated with the proposed water

treatm ent requirem e nts and the engineering, hydrologic, and geologi c technical issues
associated w ith the produced water discha rge aspects of the pr oposed changes.

This report represents Sandia’s review, observations, and assessm ents. The m a in them es of
these comments address the techni cal issues associated with:

• The proposal to identify sodium adsorpti on ratio (SAR) and el ectrical conductivity (EC), m easures of norm a l ionic constitu en ts in all surface and ground water, as harmful param e ters.

• The proposal to lim it CBNG produced water di sposal to shallow re injection unless the reinjection is shown to be infeasible.

• The proposed strict treatm ent and discharge standards; the potential im pact of these
lim its on the environm ent and ecology; and the m a turity, perform a nce, and cost effectiveness of technologies to m eet th e proposed effluent discharge standards.

• The proposal to lim it the exem ption fo r CBNG pr oduced water reinjection or

treatm ent to only livestock watering, neglecting other i nnovative or beneficial water

m a nage m e nt approaches and technologies.

The rationale presented for m a king the proposed changes to the water qua lity regulations does not appear to adequately addre ss the severe techn i cal and cost challenges associated w ith th e proposed changes nor the im pacts the proposed changes could have on use of the produced could have on wildlife and irrigation.

Based on our reviewed o f both the proposal a nd the petition o u tlin ing the rationale for the proposed changes our evaluations include:

• Electrical C onductivity (EC) and the Sodi um Adsorption Rati o are not harmful

7param e ters as the proposal relates. T h ese param e ters are used to describe chem ical properties of any water and both EC and SAR provide a m e tric to help identify general overall water quality. E C and SAR can be us ed to iden tif y s a f e levels, in term ediate levels, and undesirable leve ls of water quality, but th em selves are not h a rmful

param e ters or constituents. In reality, so m e level of chem ical ions in a water are actually considered beneficial for hum a n, plant, and wildlife uses.

• There appear to be lim ited system atic and succe s s f u l approac h es to re inje ction into
coal seam s or injection in to other form ations of CBNG produced water in the Powder River Basin. Geology and other geotechnical factors severely lim it injection options.
The success rate of es tab lishi ng reinjection wells based on tod a y’s ava ilab l e data is
less th at 30 %.

• As written, the proposed waiver from zero di s c harge (Proposed New Rule III) process
will be an e x trem e burden on both d e ve lope rs su bm itting the requests and the regulatory agencies having to review the num erous requests, which could severely curtail CBNG development and production.

There were several m a jor techn i cal and envir onm ental issues with the proposed produced
water effluent treatm e nt lim its. These include:

• Inconsis ten t ef f l uent trea tm ent levels f o r various param e ters, especially for Ca, Mg, and Na,

• Water effluent levels th at are far belo w comm onl y accepted water quality standard s, especially for As, Ca, Mg, and Na,

• The proposed produced water treatment levels will create an effluent water quality that could negatively im pact both a quatic species a nd irrigation,

• Identification of proposed treatm ent t echnologies that have not been fully
dem onstrated to m eet the proposed efflue nt guidelines consistently in operational settings across the range of produced wa ter qua lities in th e reg i on f o llowin g EPA

recomm ended technology cost and perf orm a nce verification guidelines, and

• The lack of consideratio n of the waste treat m e nt costs and environm ental im pacts that could be generated from handling and m oving the waste stream s from the proposed

water trea tment proc esse s.

Additionally, the proposed ru le changes lim it the use of innovative produced water

m a nage m e nt technologies. W ith only an ex em ption for CBNG water used for livestock watering, no other m a nagem e nt options ar e perm itted for CBNG produced water in the proposed changes. This lim its several comm on pr oduced m a nagem e nt options and approaches and em erging approaches that m i ght be applied in an environm entally sound and
cost effectiv e m a nner and reduce the use if fr esh water resources. The iss u es iden tified
include :

8• The proposed restrictions effectively precl ude the direct use of CBNG water without

treatm ent for m a ny beneficial purposes. The CBNG produced water quality in the PRB is appropriate for a num b er of applica tions with either littl e or no treatm ent.
Som e approaches have been used with CBNG produced water to provide affordable produced water m a nagem e nt to operators while providing direct benefits to
landowners. For exam ple, m a naged water tr eatment and use f o r irrigation has proven
successful in several Powder River Basin applications.

• Operators, land owners, and land m a nagem e nt agencies m a y be interested in other uses of this produced water for a range of other applications including recreational opportunities, irrigation, oilfield m a ke up wa ter, electrical power generations, and use
of water for other industrial or dom es tic app lications to offset fresh water dem a nds.

• The proposed provision also re stricts the use of em erging innovative technologies that
could be used to m a nage CBNG produced water in an environm entally and ecologically sound m a nner.

Overall, the proposed change s are inconsistent w ith th e common understanding of water quality requ irem ents for treating sligh tly im pair ed brackish surface or grou nd water, as exists with the CBNG produced water in th e Powder River Basin, to m eet various uses and applic ation s

. W ith m i nor adjus t m e nts of wate r quality, m u ch of the CBNG produced water in
the Powder River Basin can be used for a num b er of beneficial purposes.

9

### 2. INTRODUCTION AND PURPOSE

In May 2005, a group of petitioners led by th e Northern P l ains Resource Council (NPRC)
subm itted a petition to re vise wate r q u ality requ ir em ents to the Montana Board of
Environm ental Review (BER). Under Montana la w, the BER had to consider the petition and either reject it or propose it as a new regulation. In Septem ber 2005, the BER announced proposed changes to the Montana water quality regulations. T h e proposal, which is presented in Appendix A of this report, included alm o st the exact language found in the petition and was
directed tow a rd discharges of water from co al bed natural gas (CBNG) production. T h e key
elem ents of the proposal included:

1. The Sodium Adsorption Ratio (SAR) and Electrical Conductivity (EC) w ould be
reclassified as “harm f ul param e ters,” ther eby greatly restricting the ability for CBNG discharges to be allowed under M ontana’s nondegradation regulations.

2. The Montana water quality standards for th e SAR and EC would be evaluated using the 7Q10 flow (lowest 7-consecutive-day flow in a ten-y ear p e riod) rather than a monthly flow that is currently used.

3. No discharges of CBNG water are allowed to Mo ntana surface wate rs unless operators
can dem onstrate that injection to aquifers w ith the potential f o r la ter recov e ry of the
water is not feasible. Producers would be re quired to provide exte ns ive in jected water rate and transport m odeling, geologic evaluati on data, and pump test data on aquifers and confining layers to prove injection was unfeasible.

4. W h en operators can d e monstra t e th e injec ti on is not f easible, the CBNG water to b e discharg ed must m eet very stric t di s c harge lim its f o r m u ltiple constituen ts.

The proposed regulations, if adopted in their current form , could signi ficantly im pact and reduce CBNG development and production in M ontana. The im pact also extends to Wyom ing CBNG production through m u ch greater re strictions on water qua lity tha t must be

m e t at the in ters tate bord e r.

One of the U.S. Departm e nt of Energy’s (DOE’s ) m i ssions is to ensure an abundant supply of affordable energy for the nation. O n e way in wh ich DOE supports that m i ssion is to evaluate proposed federal and state regula tory actions that would restri ct or im pede energy production
to assess whether the environm ental or other be nefits of those actions are commensurate with the energy impacts. DOE’s National Energy Technology Laboratory (NETL) reviewed the BER proposal and believed that the proposal co uld significantly restri ct C B NG production in
Montana and W y om ing. To aid in the review of the proposal, DOE asked two other national laboratories – Argonne National Laboratory (Argonne) and Sandia National Laboratories (Sandia) – to prepare written evaluations on va rious aspects of the proposal. Argonne focused on regulatory and policy issues and their in terrelationships with technology, and Sandia
focused on the m a jor technical issues associ a t ed with the p r o posed water trea tm ent requirem e nts and the engineering, hydrologic, a nd geologic technical issues associated with the zero discharge asp ect s of the proposal.

10This report represents Sandia’s review and observations. The m a in the m es of these comm ents address the technical i s s u es associated with:

• The proposal to identify sodium adsorpti on ratio (SAR) and el ectrical conductivity (EC), m easures of norm a l ionic constitu en ts in all surface and ground water, as harmful param e ters.

• The proposal to lim it CBNG produced water di sposal to shallow re injection unless the reinjection is shown to be infeasible.

• The proposed very strict treatm ent and disc harge standards; the potential impact of
these lim its on the environm ent and ecology; and the m a turity, perform a nce, and cost effectiveness of technologies to m eet th e proposed effluent discharge standards.

• The proposal to lim it the exem ption fo r CBNG pr oduced water reinjection or

treatm ent to only livestock watering, neglecting other i nnovative or beneficial water

m a nage m e nt approaches and technologies.

The rationale presented for m a king the proposed changes does not ade quately address the
severe techn i cal issues and challenges associat ed with the proposed changes. W e have reviewed both the proposal and the petition outlining the rationale for the changes. E a ch of
the sec tions discusse s in detail the m a jor techni cal issues that have b een identif ied in both the proposal an d the backg r ound information in the petition. Th ese them es will be d i scu ssed sequentially.

11

### 3. PROPOSAL TO IDENTI FY SAR AND EC AS HARMFUL

One of the revisions included in the proposal is classifying the Sodium Adsorption R a tio (SAR) and Electrical C onduc tivity (EC) as undesirab le substances with de leterious properties. The proposed language reads:

17.30.670 NUMERIC STANDARDS FOR ELECTR ICAL CONDUCTIVITY (EC) AND SODIUM ADSORPTION RATIO (S AR) (1) through (5) remain the same. (6

) EC and SAR are harmful parameters for the purposes of the Montana Water Quality Act, Title 75, cha p ter 5, MCA

.

EC and SAR are m easures of the ch em ical charac ter i stics of water. Th ey provide inform ation on the level of the quantity of total dissolved so lids (TDS) or salts such as calcium

, sodium

, chloride, sulfates, carbonates, and other salts in a water sam p le (Israel sen 1950). All natural waters contain ions, salts, and TDS and the para m e ters EC and SAR are used to id entify the
level and ratio of dissolved salts in w a ter. EC is sim p ly a m e a s ure of the total am ount of
dissolved sa lts or salinity in a wate r sam p le . It does not m easure a specif ic chem ical
substance that could be construed as harmful. SAR is a ratio of the levels of sodium , calcium

, and m a gnesium dissolved in a water sam p le.

Both EC and SAR provide a m e tric to help iden tify general overall water quality. Like m o st other water quality param e ters, lower levels of EC and SAR suggest higher quality w a ter and high levels suggest that the water can begin to pose a risk to aquatic life, hum a ns, plants, and/or soils. In other words, EC and SAR can be used to id entif y saf e leve ls, interm ediate levels, and undesirable levels of water quality, but them selves are not harmful param e ters. Table 1 lists general water quality data showing the level of EC considered beneficial and the
levels considered detrim ental for a few genera l w a ter use applications taken from several sources including (Israelsen 1950 )(B atm a nghelidj 1995)(EPA 2005).

Table 1. Electrical Conductivity Ranges for Various Water Uses EC, μS/cm Application

Beneficia l Level Limita tions on Use Drinking water 200-400 >1600 Irrigation Water 200-3000 > 3000
Livestock Water 1 500 - 3000 > 5000 - 6000 Fresh water Aquatic Species Up to 5000 > 8000-10000

1 W

a ter quality parameters for most li vestock is su mmari zed here and in more detail in Table 4

Therefore, from a technical perspective, EC as shown above is indicative of water quality, but very low to zero levels of EC are not necessarily the m o st beneficial le vel for water quality. Therefore, water with moderate E C and SAR l e vels are common and necessary for good water quality and should not be identified as ha rmful param e ters as suggested in the proposal. Very low levels of EC and SAR could lead to inf iltration problem s , and potentially not provide the nutrients for bot h crops and aquatic life.

12

### 4. PROPOSAL TO REQUI R E INJ E CTION OF CBNG
PRODUCED W A TER

Proposed New Rule II requires zero discharge of CBNG produced water and directs that the water be re-injected to a suitable geologic form a tion. It appears that the requirem e nt to reinjec t is b a s e d on the de sire to keep water in the aquif e rs f r o m which it c a m e or at le ast in other nearby aquifers from which it could be recovered later for beneficial uses. The proposed language reads:

NEW RULE II ZERO DISCHARGE REQUIREM ENT (1

) Except as provided in [New Rules III through IX ]

, point sources of methan e wastewater shall achieve zero discharg e of pollutants, which represent s the minimum technology-based requirement. Zero discharge shall be accomplished by reinjection of methane wastewate r into su itab l e ge ologic formations in the project area in compliance with all ot her applicable federal and state laws and regulations.

The technical issu es and challenges of reinje ction of Montana’s CBNG produced water into
the sam e or another coal seam , or injection of the produced water into another receiving
for m ation in the Powder River Basin (PRB) ar e discussed below. CBNG produced water is a
valuable res ource with r e latively lo w TDS compar ed to waters of m a ny naturally saline inland
for m ations. Opportunities to sa ve such a resource are im portant . The m a terial presented in the following sections and certain cited referenc es strongly suggest that reinjection of CBNG produced water into the coal seam being produc ed, as a rule, is not a reasonable option.

The Fort Union Form ation (Rice et al 2001; Arth ur et al 2005, Pritchett 2002) as shown in Figure 1 and presented in Table 2, contains all the water producing coal beds in the Montana PRB (MBM G 2001). In the Montana portion of the PRB the bulk of the coals are confined to the Tongue River Mem b er of the Fort Union Form ation. The Lobo and Tullock m e mbers are predom inantly shale and shaley -sand (McLellan et al, 1990).

The f o llowing rein jectio n /injection schem e s ar e potentially possible and were considered:

• Sim u ltaneous rein jec tion into th e sa m e coal seam that is being produced,

• Sim u ltaneous m u ltiple coal seam production vs. s e quential production an d rein jection into vertically stacked co al seam s,

• Reinjection into under-pressurized or non-productive coal seam s,

• Injection into sandstones within the Fort Un ion form ation and the form ations above
the Fort Union for m ation, and

• Other injection considerations.

The technical issu es and concerns as sociated with produced water injection or coal seam reinjection options for each schem e are discu ssed. Additiona lly, the chem ical com p atibility between CBNG produced water and the waters of the receiving for m ation/aquifer are
discussed.

13Simultaneo us Reinjection into the C oal Seam That is bein g Produced

Sim u ltaneous reinjection of CBNG produced water into the coal seam that is being produced is not a reasonable option. Reinje ction of CBNG produced water in to the sam e coal seam that is being produced would be an ideal solution if it is feasible from an operational and technical basis. It would allow secure geologic storage of this valuable produced water in the a quif e r f r om where it cam e, idea lly m a tching with the re m a ining waters in that coal seam , and “put things back where they were.” In m o st instan ces such an option is difficult in practice from an operational and process viewpoint, and m a y be unwise from a resource m a nagem e nt viewpoint. It m a y have potentially negative environm ental consequences.

Figure 1. General Geologic Cross Section of the Powder River Basin (Rice 2000)

14Table 2. Typical Geologic Formation Dept hs in the Powder River Basin of Montana

Form ation Approxim a te Form ation Depth in feet Wasatch Sands, Quaternary Alluvium <500
Fort Union ~50-2500 Lance, Fox Hills ~2500-4000
Paleozoic Carbonates ~10,000-14,000

Production of CBNG typically requ ires a reduction in the hydrostatic pressure. This is

accom p lished by producing water fro m the coal s eam . Reinjection would require raising the hydrostatic pressure. This would directly im pair production. Sim u ltaneous injection
and withdrawal from the sam e coal seam is analogous to em ptying and filling a bucket at the

s a me t i me

.

A tendency has been noted for som e coal se am s to com p act during the lowering of the hydrostatic pressure of the coal seam with subs equent degasification of the coal seam (Palm e r and Varzi, 2004). This could im pair the origin al water storage ability of the original coal

seam i m plying attendant higher pressures necessa ry to re-inject into a seam whose storage capacity has been reduced by com p ac tion. Attemp ts to re-inject produc ed water then would have the po tential of hydrofractu r ing outside the coal seam res u lting in water m i gration outside the injection zon e , an unintended result and a potentially seriou s situation. E x ceeding the fracture pressure is generally prohibit ed under EPA’s Underground Injection Control

program (EPA, 2002). The tendency to com p act m a y vary from coal seam to coal seam

. More research is necessary to determ ine wh ich coal seam s a r e m o re or less prone to

com p action.

It has been estim ated that 50% of the natural gas reserves are recovera ble by present m e thods. Enhanced recovery m e thods such as CO 2 injectio n are poss i bilities th at could be considered in future years. (Cox, 2001; ORNL, 2002). If th e coal seam is first produced and the CBNG produced water is held on the su rface in a holding pond, and then later reinjected into that

sam e , now depleted, seam, the possi bilities of enhanced recovery can be lost or significantly
im paired. This is m o re of a sequenc ed scena r io which will b e deta iled m o re in the su bsequent
section.

An Environm ental Im pa ct Statem ent (BLM 2003) relating in part to CBNG produced water in the Powder River Basin, written by the Bureau o f Land Managem e nt (Miles City and Billing s , Montana Field Offices), the Montana Board of Oil and Gas Conservation and the Montana Departm e nt of Environmental Quality m e nti ons injection, treatm ent, im poundm e nt, and discharge as options for handling CBNG produced water as disposal options in the preferred
alte rnative. In this sam e EIS, Page 2-3, however, it specifically states tha t rein jection in the

sam e coal seam being produced is not a suitable option.

15Simultaneous Multiple Coal Seam Production vs. Sequential Production and Reinjection
into Stacked Coal Seams

Sim u ltaneous m u ltiple coal seam production is mo re efficient and economically preferable to sequential production and reinjection into stacked coal seam s. It allows exploitation of thin
coal seam s, disturb s the land surface less because it is m o re efficient, and it avoids po tential
leaseholder com p lications. W h en producible se am s are stacked, the possibility exists to produce one seam and draw its hydrostatic pr essure down and then produce a second seam above or below it and re-inject the water into the first seam that is called sequenced coal seam production. This option m a y appear desirable as water from the co al seam s is placed back in
coal seam s. (In th is scen ario, the water fr om the first seam produced would have to be
im pounded in a holding pond or handled in som e ot her m a nner). Before such a step by step production reinjection operation should be ventur ed, efforts should be first m a de to ascertain the geolog ic/hydrolog ic isolation of su ch coal seam s from each other.

In practice there are several drawbacks to se quenced production from a resource extraction

m a nage m e nt and conservation perspective, also from an econom ic and environm ental perspective. The utilization of the CBNG res ource of the thinner coal seam s could require
extraction in a sim u ltaneous production m ode, as extraction of the CBNG from thin seam s on an individual basis could be unattractive ec onom ically. The simultaneous production rather than sequenced production of the coal seam s wo uld norm a lly be m o re efficient from a cost and operational point of view. Any injection from sequenced production/reinjection could
im pair possible future extraction of the rem a ini ng gas resource, is m o re expensive, and would keep the extraction operation on the land for a lo nger period of tim e with the attendant surface
disturbance.

The storag e capacity of the receiving

, produced co al seam would have to be reinvestigated in
each case. Production can alter the storage cap acity of a give n seam as described in the previous section. The sequential production m ode could also be a cause f o r leaseholder
concern and com p lications. Lease ownershi p often resem b les a checkerboard between federal, state, and private holders. Unless the pr oduction sequence of thes e individual seam s is
coordinated am ong diffe r ent ho lders, draw-down possibilitie s across lease boundaries could

create concerns.

The above referenced EIS encourages m u ltiple seam completions from the sam e well as technology perm its. Multip le seam com p letions from the sam e well would create less attendant land disturbance. Otherwise, Montan a resource m a nagers and oversight agencies
have shown no additiona l pref eren ce in the EIS b e tween sim u ltaneou s m u ltip le se am production and staggered coal seam production. In the record of decision the Montana Board
of Oil and Gas and the B L M both restated no preference for sequential vs. sim u ltaneous production of stacked seam s (BLM 2003a) (MB OGC 2003).

16Reinjection into Under-pressuriz e d or Non Pr oductive Coal Seams

Reinjection into an under-pressuri zed coal seam could be poten tially environm entally harmful
if the seam has no hydraulic seal . Injection into a naturally under-pressurized coal seam is another possibility to handle produced CBNG wa ter. Under-pr essurized coal seam s, if geotechnically suitable, would be a good op tion for handling CBNG produced water. However, such an under-pressurized coal se am may be under-pressurized for a reason, specifically the lack of a hydrau lic seal. As such, an under-pre ssurized seam may be caused by a num ber of reasons. These could include th e outcropping of the seam into a stream or spring or els e where. Fa ulting and f r actur ing can im pair the s eam ’s ability to hold pr e ssure and water. Injection in to such a seam has the po te ntia l to lead to pot ential unintended release of injected water. Stan dard res e rvo i r tests in su ch a situatio n m a y not give a com p lete geologic/hydraulic picture of th e under-pressurized coal seam.

It should be m e ntioned that there are a series of under-pressurized coal seam s in the Wyom ing portion of the Powder River Basin. A prelim inar y account of this feature has been given by Geoff Thyne at the Petroleum Environm ental Research Forum (Thyne, 2005). The data is presently being synthesized and analyzed at St anford University. The geologic circum stances of such potential sources for reinjection are not yet fully understood.

Whether an analogy of this W y om ing Powder River Basin system exists in the Montana Powder River Basin is as yet unknown. As m o r e data from Montana coal seam s is

accum u lated, the existen ce or non ex isten ce of such an analog ous system will becom e known. If a Montana analogy exists, th e detailed geologic settings of such seam s must still be
determ ined to find out whether such system s would be suitable for CBNG produced water reinjection.

The above referenced EIS m e ntions the possibi lity of injection into non-productive coal

seam s but does not elaborate.

Injection into Sandstones w i thin the Fort Union Formation and the Formations above
the Fort Union Formation

The geology of the shallow Fort Union a nd overlying sand form ations generally m a ke
rein jection p o ssibilities lim ited. The sandstone s of the Fort Union Form ation (~50-2500 ft) are terrestrial (Arthur et al , 2005) in nature; the sandstone s are not continuous and are relatively sm all. The chances of finding suitable sandstones in these form ations that can take the required volum es of water are quite sm all. Many of these sandstones in the Fort U n ion adjoin ing th e coals are also water saturated a nd as a rule thes e sandstones are less ex tensive
than the coal seam s. Attem p ts to inject in such s itua tions co uld enta il relative l y high injec tion pressures with a dim i nished chance of in jecting reasonable am ounts of CBNG produced water. On a general basis injec tion into these form ations is di fficult but this has been done in a few cases (Likwartz, 2005).

The Montan a Bureau of Mines and Geology very recen tly b e gan investigating and
docum enting large channel sands in the Lower T ongue River Mem b er (~50-500 ft) of the Fort

17Union Formation. These individual sands m a y be extensive individua lly, but generally are not laterally continuous, rather m o re com p ar t m entalized (John W h eaton and David Lopez, 2005).

Lower satur a tion and les s inje ction p r essur e m a y exist in the sands overlying the Fort Union

Form ation, or in the W a satch Sands/Quaternar y Alluvium (<500ft). These sands are also

terr estria l in nature. W e ll logs cou l d be exam ined to dete rm ine the ve rtica l exten t of such

W a satch san d s. Models exist to m a ke estim a tes of the late ral extent of any lenticular sands seen on the logs based on sedim e ntalogical pr inciples. W i despread existence of such unsaturated sands, extensive enough to be an adequate injection target in this
sedim e ntological environm ent is not the rule. However there m a y be som e instances where such suitable injection sands overlying the Fort Union Formation Coals could exist.

Fluid Compatibility

The com p atibility of CBNG produced water be in g re-in j ec ted back into th e orig inal f o rm ation or injected into another form ation/aquifer need s to be considered in each case. The CBNG produced water injection m u st be ch em ically co mpatible with the receiv i ng for m ation and generally should have no adverse effect on th e water quality of the in jected form ation. The design of any rein jection system into a give n formation / receiv ing aquifer should accou n t for possible vertical and horizontal variations of the water chem istry. W h en CBNG produced
water is b r o ught to th e surface, carb on dioxide and m e thane can be rele ased, and the pH can
rise. The chem istry of the water can be altere d, and it m a y becom e aerated. A determ ination
should be made to see th at the altered state of the produced water broug ht to th e surf ace for later reinjection is com p atib le with the original w a ter chem istry before reinjection.

Treatm e nt of the produced water prior to injection or reinject ion m a y im pr ove its

com p atibility with the receiving form ation. An y concentrate resulting from such treatm ent would have to be handled separately however, su ch as in jection into a c l a ss I or II in je ction
well. Moreover the treatm e nt/handling of any c oncentrate disposal will add significantly to operation costs,

Success Rat e of Drilling Inject ion Wells

The overall success rate of establishing successf u l re injec tion wells is qu ite lim ited. Ample
statistics on the success rates of injection wells are not avai lable on either side of the Wyom ing/Montana Powder River Basin. Some prelim inary data was provided on the sim ilar Wyom ing Powder River Basin formations by the W y om ing Oil and Gas Comm ission (Likwartz, 2005). Forty four (44) injection wells were actua lly drilled. A m ong these 44 wells there were 24 in the Fort Union, 4 in the Fox Hills 1 in the Lantz/Fox Hills Form ations. Of
these on ly 1 2 were in op eration after one y ear. T h e accum u lated in jection of these wells accounts for only about 2% of the cu rrent W y oming CBNG produced water.

Commonly, an injection well is e xpected to function for about f our years. W h ile injection

m a y see m to be a desirable way of handling th e CBNG produced water, the available data
indicate th at the success of a given injection well venture cannot be guaranteed in the geologic

18for m ations availab l e in the Power River Basin region. Failu res m ean addition a l expense and land disturbance and injection wells can be e xpe nsive. Com p leted we ll co sts in the sh allow
Fort Union Form ation can be in the one hundr ed fifty thousand dollar range depending on depth while those drillin g costs in th e La nce/Fox Hills Form ation can ran g e around o n e

m illion dollars. Unfortu n ately, the s u ccess ratio of disposal wells a t thes e shallower depths has been limited, driving up overall produced water in jection costs. An in jection well in the
Paleozoic Carbonates of the Powder River Ba sin at depths ~12,000 ft , drilled today, w ould
cost in the n e ighborhood of five and one ha lf m illion dollars, com p leted, with surface
facilities. D r y hole drilling co sts would com p rise approxim a tely 50% of the costs, completion 30%, and su rface facilities just und er 20%.

Conclusions on the Technical Feasibility o f CBNG Produced Water Reinjec t ion a s the Primary Water Management Op tion

Reinjec tion of CBNG produced wate r into the co al seam being produced as a rule is not a reasonable option. The above referenced EIS, prepared by Montana resource m a nagers and oversigh t ag encies concur with th is conclus i on

Sequential production and reinjection of stacked co al seam s is less efficient than sim u ltaneous
coal seam pr oduction. It is not preferable econom ically; especi ally if relatively thin coal

seam s are involved. The EIS prepared by the th ree above agencies enco urages m u ltiple seam production technology but otherwise shows no pr eference on which extraction m ode should be utilized. Sequential production has the poten tial of causing leaseh older com p lications. The storage capacity of one or m o re of the produced seam s may be altered during production.

The desirability of reinjecti on into an under-press urized coal s eam depends largely on
whether that coal seam has an adequate hydraulic seal. However, the fact that the seam is under-pressured m a y be an indication that the hy draulic seal is inadequate and could allow injected water to flow into other form ations, stream s, or springs.

The geology of the shallow Fort Union a nd overlying sand form ations generally m a ke
rein jection p o ssibilities in those formations lim ited.

There appear to be lim ited system atic and success f u l approac h es to re inje ction into co al seam s or injection into other form ations of CBNG produced water in the Powder River Basin. Geology and other geotechnical factors lim it opti ons. These options m u st be considered on a case-by case basis. Non e theless, when successfu l , re injec tion or injection would at le a s t in principle preserve the produced water for future use.

While som e reinjection in the Montana and W y om ing Powde r River Basins is feasible, the
overall succ ess is lim ite d. The su ccess rate, based on today’s available data is less than 30%.
The results of these 44 wells drilled indicate reinjection or injecti on options are generally
lim ited in the Powder River Basin. Thus the proposed regulations would require roughly three inje ction wells dr illed f o r one s u ccessf ul in jection we ll with very su bstantial
environm ental dis t urban ce in th e form of surface disturb a nce, air em ission s, noise, and
vehicle traffic.

19W h ile produ ced water in jection m a y be f easible in other geo l ogic se tting s across the western oil and gas producing states, produced water inje ction m u st be considered on a case by case basis and feasibility will be controlled by wa ter and gas volum es per well, infrastructure requirem e nts, produced water quality, and region al geology. In som e regional settings in Montana, injection will be feasible, but in m o st cases produced water injection opportunities currently appear to be geologically lim ited. It is therefore technically inappropriate, based on
the current u nderstand in g of the subsurface ge olo gy, to iden tify injection as the prim ary disposal option for CBNG produced water in Montana.

Waivers fo r CBNG Produced Water Injection

New Rule III recogn izes that there m a y not be su itable g e olog ic form ations available to
receive some or all of the water to be injected. It allows opera tors to apply for a waiver under
those circum stances. The proposed language reads:

NEW RULE III WAIVER FROM ZERO DISCHARGE REQUIREMENT (1) The department may grant a waiver from the zero discharge requirement if the owner or operator of a point source disc harge of coal bed methane wastewater demonstrates by clear and convincing evidence to the department through site specific studies that the requirem e nt is no t te c hnically fea s ible because estimated wastewater production rates exceed the estimated cumula tive reinjection rates of a ll su itable geologic formations in the project area. (2) The department shall limit the waiver to the volume of methane wastewater for which the owner or operator shows that zero discharge is not technically feasible. The volume of methane wastewater for w h ich th e department grants a waiver from the zero discharge requirem e nt shall be limit ed to th e difference between es timated wastewater production rates and the estimated cumulative reinject ion rates for all suitable geologic formation in the project area. (3) The department may limit the waiver to the initial phases of development when the volume of methane wastewater produced by wells is highest, which may make reinjection o f

all su ch wate r technically unfeasible. (4) The department may also grant a waiver from the ze ro discharge requirement if
the EPA will not authorize th e reinjection pursuant to a permit under the Safe Drinking Water Act (SDWA) , 42 USC 300f to 300j-26(5) . The opera tor shall attain zero discharge for the volume of methane wastewater for which the department does not grant a waiver.

New Rule IV outlines the inf o rm ation that m u st be provided in the waiv er applica tio n.

NEW RULE IV INFORMATIONAL REQUIREMENTS FOR W A IVER
DETERMINATION (1) An owner or operator reques ting a w a iver from the zero discharge requirement for c oal bed m e thane wastewater shall submit an application to the department for the de partment to make a determination on whether to grant the

waiver. (2) The appl ication shall include, but is not limited to, the following:

20(a) a description and map of the coal bed methane project and project area showing the location of wells, pipeli nes, roads, compressors, and related infras truc tur e ; (b) a description of the surfa ce owners in the p r o j ect a r ea; (c

) an estimate of pumping rates for coal bed methane wells in the target coal seams and an estimate of the volume of wastewater likely to be produced per well per y e a r ; (d) for each targeted coa l seam, dat a showing areas characterized by high concentrations of vertical fractures w h ere wastew ater production wells may be higher; (e

) an inventory and map of geologic formations, aquifers, and confining layers including significant frac ture s, fissu res, a nd faults w i thin the pro j e c t area. The following information is requi red for each geologic formation and aquifer in the project area: (i

) lateral extent, thickne ss, and depth. Maps and cro ss sections indicating the
vertical and lateral limits of each formation; (ii) hydraulic properties including, but not limited to, transmissivity, storage coefficient, effective porosity, and hydrau lic conductivity. The results of pump tests, analysis of core sample s, and other geophysical studies; (iii) water quality chara c ter i zation incl uding the geochemica l compatib ility of the receiving aquifer minerals with methane wastewater; (f

) an inventory and map of the locations of natural recharge in the project area and near the reinjection location; (g) an inventory of the wells, springs, and seeps in the project area including pumping rates for wells. A tabulation of data on all wells within the project area including a description of each well’s type, construction, date drilled, location, depth, record of plugging and/or completion, and any additional information known about the well; (h) the results of ground water m odeling showing the relationship and hydrologic connectivity of the identified geologic formations and aquifers, the effects o f

fra c tures, fissu res, faults, and other significant geologic features on ground water movement in the project area; (i

) the results of pump tests of con fin ing layers qu antifying potentia l leaka g e through such layers; (j

) a description of all potentially suit able geologic formatio ns for re inje ction within the project area. For each such suitable geologic form ation, the operator sh all submit th e following information: ( i ) the results of rein jec t ion well te sting; (ii) based upon the results of testi ng and other studies, an estimate of the short-term and long-term reinje ction rates that each suitable geologic formation is capable of receiving; (iii) the results of g r ound water modeling showin g the effects of reinjection into suitable geologic fo rmations on other aquifers, surface waters, and regional flow systems; and (k

) all other information required by the EPA as part of the Class V UIC Program.

21(3) The department shall notify the ap plican t in writing, within 60 days after receip t of an application for a waiver, that the applic ation does or does not contain all the information necessary for th e department to make a determ ination. If the information from the sup p lemental su bmittal or a n y subsequent supplemental submittal is inadequate, the department shal l notify the applicant in writing, within 30 days of receip t of th e supplemen tal submittal, what additional inform ation must b e submitted. The department shall notify the applicant in writing when the application is deemed complete.

As discussed previous ly , zero dis c harge th rough rein jection will be tech nically and

econom ically feasible w e ll less than 30% of th e tim e and therefore waivers for reinjection infeasibility will prob ably be the norm rather than the excep tion. As written, the prop osed waiver pro c ess will b e a n extrem e burden on both develope rs subm itting the reques t s and the regulatory agencies having to review the num er ous requests, which could severely curtail CBNG developm ent and production.

The waiver inf o rm ation needed to sh ow inf easib ility f o r injec tion or rein jection as pro posed

are ex trem ely cum b ersom e , expensive, and tim e c onsum ing. They require data on all wells in the vicinity, local and regiona l ground water m o deling, pum p te st data, and injection well data. The requirem e nts are redundant, in that the sam e inform ation is required for every injection well, even if in sim ilar formations, regions, and sim ilar conditions.

Overall, the proposed process needs to be sign ificantly stream lined and more realistically follow accepted EPA guidelines for underground in jection co ntrol and oil and gas pro duced
water in jec t ion wells.

22

### 5. Proposed CBNG Produced Water Treat ment and Discharge Standards

The proposal acknowledges that the geologic form ations in reasonable proxim ity to the coal

seam s m a y not be able to accept all of the CBNG produced water th at h a s been with drawn, and therefore has allowed the waiver pro cess, albeit through a lengthy and com p licated application procedure. When a waiver is g r anted, the produ ced water d i scharge lim its are intended to represen t a le vel of trea tment. New Rule VIII esta blishes the n u m e rical wa ter discharge standards for CBNG produced water that is not reinjected and is granted a waiver. The proposed language reads:

NEW RULE VIII TREATMENT-BASED EFFLUENT LIMITATIONS (1) If the department grants a waiver from th e zero discharge requirement for all or a portion of the wastewater pursuant to [New Rules II and III ]

, the amount of
wastewater that obtain s the waiver sh a ll ach i eve the followingminimum technologybased effluent limitations at the end of the pipe prior to discharge: (a) calcium average concentrati on between 0.1 mg/L and 0.2 mg/L; (b) magnesium average concentratio n between 0.1 mg/L and 0.6 mg/L; (c

) sodium average concentration of 10 mg/L; (d) bicarbonate average concentra tion of 30 mg/L and instantaneous maximum concentration of 115 mg/L; (e

) sodium adsorption ratio instantaneous maximum of 0.5; (f

) electrical conductivity average concentration of 233 μmhos/cm; (g) total dissolved solids average concentration of 170 mg/L; (h) ammoni a average concentration of 0.1 mg/L and instantaneous maximum concentration of 0.3 mg/L; and (i

) arsenic concentration of <0.0001 mg/L.

There are several m a jor technical and environm ental issues with these proposed effluent
lim its. Thes e includ e:

• Inconsis ten t ef f l uent trea tm ent levels for various param e ters,

• Water effluent levels th at are fa r belo w comm onl y accepted water quality
standard s,

• Treatm e nt le vels th at will cre a te an e f f l uent water quality th at will nega tiv ely
im pact both aquatic species a nd irrigation in the region,

• Identificatio n of treatm e nt techno log i es th at have not been fully dem onstrated to

m eet the proposed effluent guidelines c onsis tently in operatio nal setting s across the range of produced water qualitie s in the region, using recommended EPA technology cost and perfor m ance verification guidelines,

• the proposed treatm ent requirem e nts could significantly increase environm ental issues associated with waste dispo s al, and

• The proposed water quality standards ar e am biguous in discussing m i nimum and

m a xi m u m allowed levels.

23Each of thes e m a jor tech nical, enviro nm ental, an d cost is sues and concern s associated with the proposed produced water treatm ent guidelines are discussed be low. For reference, Table 3 summarizes the proposed treatm ent standards, a nd com p ares them to several current effluent
standard s.

Table 3. Comparison of Common Water Quality Stan dards w i th the Proposed
Montana CBNG Treatment Stand a rds

Current MT Water Quality
Standards Proposed MT
CBNG Efflu e nt Standards WY CBNG
Produced Stds
into Class II

Wat e r EPA Aquatic
Life Stds

Conductivity ( μ S/cm ) 2 0 0 0

- 2 5 0 0 2 3 3 7

, 5 0 0 <21,000 a

Ca (m g/L) No Standard 0.1-0.2 No Standard No Standard Mg (m g/L) No Standard 0.1-0.6 No Standard No Standard Na (m g/L) No Standard 10 No Standard No Standard

S A R 5

. 0

- 7

. 5 b 0.5 c, d 10 e No Standard

Bicarbonate (m g/L) No Standard 30 average
115 m a xim u m No Standard >20 f

As (m g/L) 0.15 average,
0.34 m a ximum <0.0001 No Standard 0.15 (acute) 0.34 (chronic)

a Based on p r i m ar y so ur ce o f d i sso l v e d so lid s f r o m N a Cl, r e du ce t o 2 900 if Ca, M g , and K ch lor i d e s

are prese n t
b M ont hl y ave r age S A R

, dep e nd s on seas on

c I n s t a n t a n e o u s ma x i mu m S A R

d Calcu l ated SA R based on pr opo sed Ca, M g , and N a lev e l s is 2.5 to 5

. 3

e R e qui res si t e –sp eci fi c PR

f Criterio n Con tin uou s C o n c en tration (CCC ), ch ron i c level f o r fre sh water fish is 2 0

, 0 00 m g /L

Inconsisten t Treatment Limi ts of Various Parameters

The two m a jor incons iste ncies a r e th e trea tm ent li m its for EC and SAR. EC is based on the
ionic con cen trations of s a lts, su ch as the cati ons Ca, Mg, Na, and the anions Cl, sulfate, and carbonate, and other ions in water. Ca and Mg are the m o st common anions in fresh water,
and rem oving Ca, Mg, and Na to the levels identi fied in the proposed standards will create an

EC value much less than the 233 μ S/cm level proposed.

Since there is a m i ni m u m value given for Ca and Mg, attaining a m a xi mum value of SAR of
0.5 would violate these standards. T h e proposed m a xi m u m value for SAR of 0.5 can not be attained using the proposed av erage treatm e nt standards for Na, Ca, and Mg. SAR is calculated as a ratio of the Na, Ca, and Mg i onic concentrations in water as shown below:

24SAR = Na / [(Ca + Mg)/2] 0. 5

Where: Na, Ca, and Mg are in meq/L

a The form ula for calculating SAR, a n ex pl a n at i o n o f m i l liequi val e nt s vs. m g / L , and a h a ndy SAR cal cul a t i on

t ool a r e pr ovi d e d at : h ttp ://www.coo p e x t .co l o s tate.edu /T RA/PLANTS/ind e x

. h t ml# h ttp ://www.co l ostate.edu /Dep ts/Coop Ext/TRA/PL

ANT S/sar. htm l

As indicated in Table 3, the SAR range base d on the proposed lim its for Na, Ca, and Mg would be about 2.5 to 5.3. Therefore, se veral of the proposed treatm ent lim its are
inconsis ten t

.

Proposed Water Effluent Levels far be low Accepted Wa ter Qua lity Standards

The extrem ely low effluent lim its proposed c ould actually create water that could be
detrim ental to hum a ns, anim als, and the envi ronm ent as discussed in detail below.

As shown in Table 1, som e level of ions in wate r, such as Ca and Mg, are beneficial for m o st uses and the r ef ore lim its on these co nstitu ents ar e of ten not s p ecif i ca lly c ontrolled. L i m its on these ions and salts is generally controlled through the developm ent of EC or TDS levels, putting m i nimum and maxim u m levels on salts in a water. C o mm on TDS criteria for drinking water consider Ca and Mg concentrations of 100 mg/L as appropriate and beneficial, with
levels above 300 m g /L as near upper lim its. Le vels below this are not recomm ended because of the aggressiveness due to the resu lting wa ter ’ s ability to le ach heavy metals and tox i c

m i nerals into the water. In addition, the lo w alk a linity lev e l will sign ificantly reduce the buffering capacity of the water.

For irrigation purposes and livesto ck uses, Ca, Mg, and EC valu es can be significantly higher than for drinking water as shown Tables 1 and 4. Therefore, the proposed treatm ent standards for Ca and Mg of 0.1-0.6 m g /L, depending on the ion, are at leas t 1000 tim e s below the generally accepted levels for drinking water and alm o st 10,000 tim es below the general levels appropriate f o r lives tock and irrigation use.

The proposed arsenic treatm ent lim it of less than 0.0001 m g /L is 100 tim es lower than the
current arsenic standard of 0.010 m g /L for drinking water and over 1000 tim es lower than required for ecologic impacts. The proposed le vel cannot be accurately m easured by current monitoring technology, and is lower than cu rrent technology treatm e nt perform a nce by a
factor of ten.

25Table 4. General Livestock Water Quality Requirements

Conductivity (μS/cm ) R a t i n g C o mm e n t s

<1,500 Excellent Usable for all cl asses of livestock and poultry.

1,500 – 5,000 Very
Sa t i s fa c t or y Usable f o r a ll c l asse s of livestock and poultry. May

cause tem p orary diarrhea in livesto c k not accus t om ed to such water; watery droppings in poultry.
Satisf acto r y f o r Livestock May cause tem porary diarrhea or be refused at first by anim als not accus t omed to such w a ter. 5,000 – 8,000 a Unf it f o r Poultry Often causes watery feces, increased m o rtality an d decreased growth, esp ecially in turk e y s.

8,000 – 11,000 Lim ited Use for Livestock,
unfit for Poultry Usable with reasonable safety for dairy and beef cattle, sheep

, swine and horses. Not acceptable f o r poultry.

11,000 –

16,000 Very Lim ited

Use In general, use should be avoided although older

rum i nants, horses, poultry and swine m a y subsist on
waters such as these under certain conditions.

>16,000 Not
Recommended Risks with such highly saline water are so great that
it cannot be recomm ended for use under any
conditions.

a W a ter less than 5 000 μS/cm is su itab l e fo r m o st liv esto ck

,

Negative Environmental and Ecological Impact s of Proposed Water Quality S t andards

Treatm e nt to the levels identified could be detr im ental to the environm ent and ecology of the

area. As m e ntioned above, treatm ent to the very low proposed levels of SAR of 0.5, EC of 233 μm hos/cm

, and alkalinity of 30 mg/l will create water that is very agg r essiv e and will
tend to leach m i nerals an d m e tals fro m the so il. This could impact downstream water quality
and toxic ity and have a n e gativ e im pact on s t re a m and river habita t. I t will also hav e a potential negative im pa ct on irrigation efficiency.

From a river and surface water eco lo gy standpoi nt, EPA recomm ends water alkalin ity of greater than 20 m g /L and up to 20,000 m g /L and an EC of about 2900 μS/cm for inland
surface waters such as th e Powder River Basi n with high levels of Ca and Mg. Based on aquatic life param e ters, the proposed treatm en t levels for both alkalinity and EC are substantially below the m i ni m u m recommended th resholds set by EPA and could be expected to negatively im pact aquatic ecology. This is an issue in W y om ing where the W yom ing Departm e nt of Ga m e and Fish has objected to the level of discharges of very low TDS water
because of the im pact on aquatic ecosystem s in the reg i on (Osborne and Adam s 2005).

Treating the water to the requir e d SAR and EC will n e gatively im pact water inf iltratio n in soils and negatively im pact irrigation. As iden tified in Table 1, irrigation water quality with an EC of 500 to 3000 μS/cm can be appropriately used. As shown in Figure 2, treating the
water to the identified SAR and EC values will create a water quality with very poor

26inf iltration c h arac ter i stic s, and ther ef ore ne gatively im pact irrigation efficiency. The
inform ation in Figures 2 and 3 suggest that si gnificantly higher valu es of SAR and EC (a
factor of ten or m o re) would be m u c h m o re beneficial to irrigati on efficiency without negatively impacting crop yields for m o st of the common crops in this region.

CBM P r o d

. W a ter
( m in im u m ) CBM P r o d

. W a ter
(m a x i m u m )

CBM Pro d

. W a ter
(m e a n )

0 5 10 15 20 25 30 35

0 1 0 0 0 2 0 0 0 3 0 0 0 4 0 0 0 5 0 0 0 6 0 0 0

Sa l i ni t y ( μ S/ c m )SAR S EVE RE REDUC T I O N I N

R A T E OF I N FILTR A

T ION S L IG HT T O M O DERA TE

REDUCTI O N I N RA T E O F

IN FIL T R A TI ON N O R E DU CT I O N

IN R A TE OF

IN FI LTR A T I O N

Cu rren t P o w d er Ri ve r Ch aract eri s t i cs ( W Y & M T d a t a ) P r opos ed

MT S A R

St a n d a rd s :

re d va l ues
cal c ul a t ed b y C a , M g

, N a val u e s

bl u e - S A R

ma x i m u m

Figure 2. Soil Infiltration Impa ct based on SAR and Salinity (mo d ified fro m A y ers an d Westc o t t) ( C BM Produc e d W a ter a nd Pow d er Ri ver Ch ar acteri s t i c s fr om US GS )

Concerns with the Performance an d Cost of th e Proposed Water Trea tment Technologies

To m eet the proposed treatm ent guidelines, reve rse osm o sis and ion exhange were identified as the technologies recommended meeting the proposed “technology-based standards”. Technology-based requirem ents m u st insure that the proposed technology is cost-effective, and economically, environm entally, and technologically feasible. Before a technology can be

recomm ended for use, it m u st be demonstrated that the p r op osed tre a tm ent lim its can be consistently m e t across the range of expected waste stream param e ters an d characteris tics under typ i cal field and o p erating con d itions. W h ile som e data do exist on the evaluation of the perform a nce of these technologies for som e produ ced water treatm e nt applications, these data
are lim ited, and neith er of the techn o logies iden tif ied has b e en evalua ted f

u lly f o llowing the current EPA guidelines for verification of th e cost and perform a nce data of innovative

treatm ent technologies (EPA 1997).

27The problem s with verification of the cost and perform a nce of the proposed treatm ent technologies is highlighted by the fact that th e proposed treatm ent level identified for arsenic
is a factor of ten lower than curr ently available technology perfor m ance.

From an econom i c and cost-effectiveness sta ndpoint, the proposed technologies can be expensive. Table 5 provides better infor m a tion on the expected costs of reverse osmosis

treatm ent for brack ish water. These are bas e d on Bureau of Reclam ation data discussed in the Desalting Handbook for Planners (BoR 2003). It pr ovides a baseline for cost estim ates for a

sm all brackish water Reverse Osm o sis (RO) plant with sim i lar chem istry and disposal needs
as the PRB. Pretreatm e nt and other site-specifi c costs would have to be included. The values
are bas e d on a water gathering and treatm e nt system to handle about one m illion gallons per day from about 96 CBNG wells.

Table 5. Estima ted PRB CBNG Produced Water Treatment Costs

Water Disp osal Costs Water Disp osal Method Total Capit a l
Costs a Capital Costs/Well O&M Costs/Bbl b

Active Tre a tm ent (RO) with pipelines, $1-2 M $10-20K $0.13-0.16

Injection Disposal of

Concent r at e $ 1

- 2 M $ 1 0

- 2 0 K $ 0

. 0 5

- 0

. 1 0

Trucking of Concentrate and Deep Disposal $ 2 0 0

- 3 0 0 K $ 2

- 3 K $ 0

. 2 0

- $ 1

. 0 0

a Incl udes b u i l di ng , e qui pm ent

, wat e r gat h e r i n g, a n d i n fras t ruct u r e
b Ass u m e s 32 0 bbl / d ay pe r wel l

, 9 6 wel l s , du ri n g fi rst 2 y ears of o p erat i on

The proposed treatm ent technologies, based on current practices, w ould generate large
volum es of concentrate, approxi m a tely 10-20% of the water treated, that would have to be disposed. T h is will sign ificantly increase th e cos t and im pact of the proposed treatm ent processes and could have m a jor im pacts on the environm ent. Si nce injection disposal options
are lim ited, other concentrate disp osal options, such as trucking to a disposal site will be required. T h is could require exte ns ive inf r as tru c ture includ ing additional roads, storage tanks, and could ge nerate sign if icant tanke r truck tra f f i c. These will have negativ e im pacts on the
environm ent, landscape, and increas e erosion, dust, and noise.

Conclusions on Proposed CBNG produced w a ter treatment and efflu e nt discharge

standards

The proposed treatm ent standards for the CBNG produced water identify very low effluent levels for SAR, electrical conductivity, calc ium

, m a gnesium , sodium , and extrem ely low
levels for arsenic. The levels identified in the proposal in m a ny case are from 100 to 1000
tim es lower than recomm ended for appropriate concentrations.

The proposed treatm ent levels for SAR, EC, Ca, Mg, and Na, are am biguous, inconsistent,
and will c r e a te an ef f l ue nt water qu a lity that is n o t appropr ia te f o r drink i ng water or irriga tion

28use, is agg r e ssive in p i ck ing up m e tals and soil co nstitu ents, a nd could ha ve a negativ e im pact to aquatic ecology and river and stream habitat.

The technologies identif ied have not been evaluated using EP A technology verification guidelines for developing cost and perform a n ce data on treatm ent technologies. Therefore, it is unknown whether the proposed treatm ent levels ar e technically feasible, cost effective, or consistently achievable across for the range of CBNG produced waters in the region. In the
case of the arsenic treatm e nt level it is doubtful that this level can be consistently m e t with current technology.

The treatm e n t technologies iden tified, and the level of treatment needed to m e et the proposed
standard s, will g e nerate s i gnifican t amounts of wast es that m u st be m a naged and could lead to
unintended environm ental im pacts from ha ndling and m oving these waste stream s. Therefore, a m u ch broader approach to de veloping standards for handling, treating, and

m a naging CBNG produced water should be consid ered. As written, th e proposed effluent standards will have significant eco logical, environm ental, and cost im pacts that were not fully
considered.

Cr op Yie l d & Irrigation Wate r S alinity

0% 5% 10 % 15 % 20 % 25 % 30 % 35 % 40 % 45 % 50 % 55 % 60 % 65 % 70 % 75 % 80 % 85 % 90 % 95 % 100 %

0. 0 1

. 0 2. 0 3

. 0 4.0 5

. 0 6.0 7 .0 8

. 0 9 .0 10. 0 1 1

. 0 12. 0

S a l i n i t y ( E C w , dS /m )% Yield Mo de ra te ly
Se nsi t iv e C r op s

(in c l

. a l fal f a) Mo de ra te ly

To lera nt Crop s

( i nc l. w h eat) To l e r a n t C r op s (i ncl

. barl ey ) Unsu itab le

for C r o p s

Se nsi t iv e C r o p s

(i ncl

. ap ple s )

PROPO SED

M O N T AN A
STAN DA RD

Cu r r e n t P o w d er Riv e r E C Rang e Current Pow d er Riv e r EC Med i an

Figure 3. Crop Yield and Irrigation Water Sali nity (modified from Ayers and Westcott)

29

### 6. PROPOSED LIMITS ON CBNG PRODUCED WATER
MANAGEMENT OPTIONS

The proposal requires reinjection to suitable ge ologic form ations wherever possible. When reinjection is not possible, and if the operato r can m a ke a succe ssful waiver application, som e or all of the CBNG produced water can be discharged as long as the effluent m eets som e very strict standards. W ith the exception of New Rule IX, which provides an exem ption for CBNG
water used f o r liv estock watering, no other m a nagem e nt options are perm itted for CBNG water. Another portion of the proposal offers som e degree of flexibility and relief, where applic able. New Rule IX allows so m e of th e CBNG produced water to be used for livestock watering.

NEW RULE IX STOCK WATERING EXEMPTION (1) The requirements of [New Rules I through VIII ] shall not apply to any quantity of wastewater used for stock watering purposes if all the follo wing conditions are satisfied: (a) the surface owner and operator sign a written agreement to use the wastewater for stock watering purposes; (b) the wastewater is stor ed in a stock tank; and (c

) the surface owner has obtained a bene ficial use permit from the department of natural resources and conservatio n pursuant to Title 85, chapter 2, MCA. (2) The stock watering exemption shall be lim ite d to the qua ntity of wate r for which the department of natural resources and conser vation issues a beneficial use permit.

This proposed restriction effectively preclud es the direct use of CBNG water without

treatm ent for m a ny beneficial purposes. So m e of these existing uses of CBNG produced water provide affordable produced water m a na gem e nt to operators while providing direct
benefits to landowners. For exam ple, m a nage d irrigation has proven su ccessful in several Powder River Basin app lications. In a recen t pap e r, (Harvey et al. 2005 ) describ e s case studies of managed irrigation to reuse CBNG pr oduced water in an ecologically sound m a nner without treatm ent.

Operators, land owners, and land m a nagem e nt agen cies m a y be interested in other uses such
as off-channel im poundm ents that can provi de livestock watering and recreational opportunities for landowners, use of water for industrial uses to offset fresh water dem a nds, or other applications. The proposed provision also restricts the introductio n of future innovative technologies for m a naging CBNG produced water in an enviro nm entally and ecologically
sound m a nner.

Water quality standards should incorporate the best available technology and allow for beneficial use of the CBNG water directly where possible. T h e CBNG pr oduced water quality in the PRB is appropriate for a num ber of applic ation s eithe r with little or no

treatm ent. As discussed in Tables 1 and 4, be neficial uses could in clude not only livestock watering, but irrigation, supplem ental water for aquatic system s, and m a keup water for other oil and gas industry uses such as drilling and completions, use by other industries such as electric power generation, or other purpos es and should not be m i ni m i zed nor ignored.

30

### 7. CONCLUSIONS

Electrical C onductivity (EC) and the Sodium Adsorption Ratio ar e not harmful parameters as the proposal relates but rather can be used to describe cert ain chem ical properties of the CBNG produced water.

There appear to be lim ited system atic and successful approaches for produced water
rein jection into coal sea m s or injection into other for m ations of CBNG pr oduced water in the
Powder River Basin. G e ology and other geotec hnical factors lim it options. Moreover the success rate of establishing reinj ection wells, based on today’s available data, is less that 30%.

As written, the proposed waiver from zero dis c ha rge (Proposed New Rule III) process will be

an extr em e burden on b o th develop e rs subm itting the requ e s ts and th e r e gulato r y ag encies having to review the num e rous requests, wh ich could severely curtail CBNG developm ent and production.

Several m a jor technical and environm ental issues exist with the proposed new effluent lim its
which inclu d e:

• Inconsistent effluent treatm ent standards,

• Effluent levels far belo w comm onl y accepted water quality standard s,

• Treatm e nt levels that will crea te an effluent water quality th at could negatively im pact aquatic species and irrigation,

• Identificatio n of treatm e nt techno log i es th at have not been fully dem onstrated using

recomm ended EPA technology cost and perf ormance verification guidelines, and

• The treatm e n t needed to m eet the proposed standard will generate significant am ounts of waste and waste water that m u st be m a naged.

The proposed lim its on the use of innovative pro duced water m a nage m e nt technologies also
raise serious concerns.

• The proposed restrictions precl ude the direct use of CBNG water without treatm ent for

m a ny benefi cial purposes. Som e of t h ese existing uses of CBNG produced water provide affordable produced water m a nagem e nt to operators while providing direct
benefits to landowners.

• Operators, land owners, and land m a nagem e nt agencies m a y be interested in other
uses such as off-channel im poundm e nts, use of water for pow er generation or
industrial uses to offset fresh water de m a nds, or other applications. The proposed provision restricts the intr oduction of future innovative technologies for m a naging CBNG produced water in an environm entally and ecologically sound m a nner.

• The CBNG produced water quality in the PRB is appropriate for a num b er of applic ation s eithe r with li ttle or no tre a tm ent, thus, with water site -spec i f i c water analysis m u ch of the CBNG produced water could be used for beneficial purposes.

313233 

## APPENDIX A

Proposed Changes to Montana Water Quality Regulations

As announced in September 2005 by the Board of Environmental Review
of the State of Montana19-10/6/05 34 MAR Notice No. 17-231 BEFORE THE BOARD OF ENVIRONMENTAL REVIEW
OF THE STATE OF MONTANA

In the matter of the amendment of
ARM 17.30.670 and 17.30.1202 pertaining to nondegradation requirements for electrical conductivity (EC) and sodium adsorption ratio (SAR) and definitions for technology-based effluent limitations, and the adoption of new rules I through Xpertaining to minimum technologybased controls and treatment requirements for the coal bed methane industry ) ) ) ) ) ) ) ) ) ) ) ) ) NOTICE OF PUBLIC
HEARING ON PROPOSED

AMENDMENT AND
ADOPTION

(WATER QUALITY)

TO: All Concerned Persons

1. On November 9, 2005, at 10:30 a.m., at the Lame Deer Charging Horse Casino, 1/2 Mile East Lame Deer Hwy. 212, Lame Deer, Montana; November 10, 2005, at 8:00 a.m., at Miles City Community College, Room 106, 2715 Dickinson, Miles City, Montana; and December 1, 2005, at 1:30 p.m., at the Metcalf Building, Room 111, 1520 East Sixth Avenue, Helena, Montana, the Board of Environmental Review will hold public hearings to consider the proposed amendment and adoption of the above-stated rules.

2. The Board will make reasonable accommodations for persons with disabilities who wish to participate in these public hearings or need an alternative accessible format of this notice. If you require an accommodation, contact the Board no later than 5:00 p.m., November 1, 2005, to advise us of the nature of the accommodation that you need. Please contact the Board Secretary at P.O. Box 200901, Helena, Montana 59620-0901; phone (406) 444-2544; fax (406) 444-4386; or email ber@mt.gov.

3. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:

17.30.670 NUMERIC STANDARDS FOR ELECTRICAL CONDUCTIVITY (EC) AND SODIUM ADSORPTION RATIO (SAR) (1) through (5) remain the same. (6) Changes in existing surface or ground water quality with respect to EC and SAR are nonsignificant according to the criteria in 75

- 5

- 301(5)(c), MCA, provided that the change will not have a measurable effect on any existing or anticipated use or cause measurable changes in aquatic life or ecological integrity. EC and SAR are harmful parameters for the purposes of the Montana Water Quality Act, Title 75, chapter 5, MCA. (7) For purposes of determining compliance with the water quality standards and nonsignificance criteria for all parameters of concern in any new or increased discharges of unaltered ground water from coal bed methane development of methane wastewater , the department shall determine effluent or compliance limits (e.g.,
evaluat e the design of disposal systems) by using a flow

- based analysis that considers a range of flows or monthly flow probability. With respect to EC and SAR, the department shall also use the median chemistry for the specified flow range or monthly
flow by using 7Q10 flows

.19-10/6/05 35 MAR Notice No. 17-231 ( 8) If any of the provisions of (6) or (7), or both of them, are declared to be invalid, then the numeric water quality standards and requirements specified in (1) through (7) shall be void.

AUTH: 75-5-301, 75-5-303, MCA IMP: 75-5-301, 75-5-303, MCA

17.30.1202 DEFINITIONS For the purposes of this subchapter, the following definitions apply: (1) "Board" means the Montana board of environmental review established by 2

- 15

- 3502, MCA. "Average" means the highest allowable average of daily discharges over a calendar week, calculated as the sum of all daily discharges measured during a calendar week divided by the number of daily discharges measured during that week. (2) "Department" means the Montana department of environmental

q uality established by 2

- 15

- 3501, MCA. "Coal bed methane extraction" means the extraction of methane gas from any coals or associated geologic formations. (3) "Daily discharge" means the discharge of pollutants measured during a calendar day or any 24-hour period that reasonably represents the calendar day for purposes of sampling. The daily discharge is calculated as the average measurement of the pollutant over the day. (3) and (4) remain the same, but are renumbered (4) and (5). (6) "Geologic formation" means a body of rock characterized by a degree of lithologic homogeneity which is prevailingly, but not necessarily, tabular and is able to be mapped on the earth’s surface or traceable in the subsurface. (7) "Instantaneous maximum" means the maximum concentration measured in any single sample of the discharge effluent. (8) "Methane wastewater" means water produced from coal bed methane extraction during exploration or development activities. (5) remains the same, but is renumbered (9). (10) "Project area" includes the entire geographic area leased by the operator or any person legally related to the operator for coal bed methane extraction. (11) "Reinjection" means putting methane wastewater back into a suitable geologic formation. (12) "Suitable geologic formation" means a geologic formation with water quality similar enough to that of the methane wastewater in the project area to ensure that, after reinjection of methane wastewater, the water of the receiving formation will remain suitable for the same beneficial uses as the methane wastewater. (13) "Surface owner" means the person who holds record title to or has a purchaser’s interest in the surface of the land.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

REASON: ARM 17.30.670 and 17.30.1202 are being amended for the following reasons:

ARM 17.30.670

The Board is proposing the amendment of ARM 17.30.670 in response to a petition filed by Northern Plains Resource Council, Tongue and Yellowstone Irrigation District, Surface Owners of the Wolf Mountains Area, Bear Creek Council, Stillwater Protective Association, Bull Mountain Land Alliance, Rosebud Protective Association, Dawson Resource Council, Carbon County Resource19-10/6/05 36 MAR Notice No. 17-231 Council, Bones Brothers Ranch, Muggli Brothers, Huggo Muggli Inc., Golder Ranch, Greenleaf Cattle Company, Rocker 6 Cattle Company, FL Ranch, and Fix Ranch (collectively referred to as "petitioners"). The petitioners are requesting that the Board amend ARM 17.30.670(6) to modify the nondegradation criteria applicable to electrical conductivity (EC) and sodium adsorption ratio (SAR); to amend ARM 17.30.670(7) to clarify that determining compliance with water quality standards and nondegradation thresholds for discharges of coal bed methane wastewater shall be done using 7Q10 flows; and to delete the non-severability clause in ARM 17.30.670(8). The existing nondegradation criteria for EC and SAR are based upon a narrative criteria that provides: "changes in existing surface or ground water quality with respect to EC and SAR are nonsignificant . . . provided that the change will not have a measurable effect on any existing or anticipated use or cause measurable changes in aquatic life or ecological integrity." The petitioners argue that the narrative criteria effectively exempt methane discharges, including discharges from methane development in Wyoming, from the state of Montana’s nondegradation policy. Montana’s nondegradation policy is necessary to protect the existing water quality of the Tongue River from degradation from methane discharges in Montana and Wyoming. Montana’s nondegradation policy will be critical to protect the existing water quality of rivers such as the Clark Fork of the Yellowstone, Rock Creek, Stillwater River, Flathead River, and the pristine streams of Park County if methane development occurs in these watersheds. The proposed amendments also restore a conservative approach to determining compliance with numeric water quality standards and nondegradation thresholds by requiring the Department to require compliance at low flow events. The Department uses this conservative approach for all other dischargers. The methane industry should not be granted special treatment. Since salinity, as measured by EC and SAR, is harmful to soils, vegetation, and aquatic life, the appropriate nondegradation criteria for EC and SAR are the criteria for harmful parameters. For harmful parameters, changes in existing water quality are considered nonsignificant, if the change is less than 10% of the applicable standard and the existing water quality in the receiving stream is less than 40% of the applicable standard. See ARM 17.30.715(1)(f). If a proposed discharge of EC and SAR will exceed the criteria for harmful parameters, then the permittee must request the Department to issue an authorization to degrade pursuant to 75- 5-303, MCA.

ARM 17.30.1202

The definitions in ARM 17.30.1202 are being amended to add definitions that will be necessary to clarify the technology-based controls and treatment requirements the Board is proposing to adopt in New Rules I through X. The new definitions are being added to ARM 17.30.1202, because that rule contains the Board's existing definitions applicable to effluent limitations for point source discharges to surface waters.

4. The proposed new rules provide as follows:

NEW RULE I APPLICABILITY (1) The requirements of [New Rules II through IX] are applicable to those facilities engaged in exploration, drilling, production, and development in the coal bed methane industry.19-10/6/05 37 MAR Notice No. 17-231 AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE II ZERO DISCHARGE REQUIREMENT (1) Except as provided in [New Rules III through IX], point sources of methane wastewater shall achieve zero discharge of pollutants, which represents the minimum technology-based requirement. Zero discharge shall be accomplished by reinjection of methane wastewater into suitable geologic formations in the project area in compliance with all other applicable federal and state laws and regulations.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE III WAIVER FROM ZERO DISCHARGE REQUIREMENT (1) The department may grant a waiver from the zero discharge requirement if the owner or operator of a point source discharge of coal bed methane wastewater demonstrates by clear and convincing evidence to the department through site specific studies that the requirement is not technically feasible because estimated wastewater production rates exceed the estimated cumulative reinjection rates of all suitable geologic formations in the project area. (2) The department shall limit the waiver to the volume of methane wastewater for which the owner or operator shows that zero discharge is not technically feasible. The volume of methane wastewater for which the department grants a waiver from the zero discharge requirement shall be limited to the difference between estimated wastewater production rates and the estimated cumulative reinjection rates for all suitable geologic formation in the project

area. (3) The department may limit the waiver to the initial phases of development when the volume of methane wastewater produced by wells is highest, which may make reinjection of all such water technically unfeasible. (4) The department may also grant a waiver from the zero discharge requirement if the EPA will not authorize the reinjection pursuant to a permit under the Safe Drinking Water Act (SDWA), 42 USC 300f to 300j-26(5). The operator shall attain zero discharge for the volume of methane wastewater for which the department does not grant a waiver.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE IV INFORMATIONAL REQUIREMENTS FOR WAIVER
DETERMINATION (1) An owner or operator requesting a waiver from the zero discharge requirement for coal bed methane wastewater shall submit an application to the department for the department to make a determination on whether to grant the waiver. (2) The application shall include, but is not limited to, the following: (a) a description and map of the coal bed methane project and project area showing the location of wells, pipelines, roads, compressors, and related infrastructure; (b) a description of the surface owners in the project area; (c) an estimate of pumping rates for coal bed methane wells in the target coal seams and an estimate of the volume of wastewater likely to be produced per well per year; (d) for each targeted coal seam, data showing areas characterized by high concentrations of vertical fractures where wastewater production wells may be higher;19-10/6/05 38 MAR Notice No. 17-231 (e) an inventory and map of geologic formations, aquifers, and confining layers including significant fractures, fissures, and faults within the project area. The following information is required for each geologic formation and aquifer in the project

area: (i) lateral extent, thickness, and depth. Maps and cross sections indicating the vertical and lateral limits of each formation; (ii) hydraulic properties including, but not limited to, transmissivity, storage coefficient, effective porosity, and hydraulic conductivity. The results of pump tests, analysis of core samples, and other geophysical studies; (iii) water quality characterization including the geochemical compatibility of the receiving aquifer minerals with methane
wastewater; (f) an inventory and map of the locations of natural recharge in the project area and near the reinjection location; (g) an inventory of the wells, springs, and seeps in the project area including pumping rates for wells. A tabulation of data on all wells within the project area including a description of each well’s type, construction, date drilled, location, depth, record of plugging and/or completion, and any additional information known about the well; (h) the results of ground water modeling showing the relationship and hydrologic connectivity of the identified geologic formations and aquifers, the effects of fractures, fissures, faults, and other significant geologic features on ground water movement in the project area; (i) the results of pump tests of confining layers quantifying potential leakage through such layers; (j) a description of all potentially suitable geologic formations for reinjection within the project area. For each such suitable geologic formation, the operator shall submit the following information: (i) the results of reinjection well testing; (ii) based upon the results of testing and other studies, an estimate of the short-term and long-term reinjection rates that each suitable geologic formation is capable of receiving; (iii) the results of ground water modeling showing the effects of reinjection into suitable geologic formations on other aquifers, surface waters, and regional flow systems; and (k) all other information required by the EPA as part of the Class V UIC Program. (3) The department shall notify the applicant in writing, within 60 days after receipt of an application for a waiver, that the application does or does not contain all the information necessary for the department to make a determination. If the information from the supplemental submittal or any subsequent supplemental submittal is inadequate, the department shall notify the applicant in writing, within 30 days of receipt of the supplemental submittal, what additional information must be submitted. The department shall notify the applicant in writing when the application is deemed complete. (4) The application for a waiver submitted pursuant to this subchapter shall comply with the signature and certification requirements of ARM 17.30.1323. The board adopts and incorporates by reference ARM 17.30.1323, which sets forth signature and certification requirements for MPDES permit applications. Copies of ARM 17.30.1323 may be obtained from the Department of Environmental Quality, P.O. Box 200901, Helena, Montana 59620-0901.19-10/6/05 39 MAR Notice No. 17-231 AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE V DEPARTMENT PROCEDURES FOR MAKING WAIVER DETERMINATIONS (1) Upon a determination by the department that an application submitted under [New Rule IV] is complete, the department shall prepare a preliminary decision approving or denying the waiver pursuant to the procedures in [New Rule VI]. (2) The department shall deny an application for a waiver unless the applicant has affirmatively demonstrated and the department finds, based on clear and convincing evidence, that reinjection is not technically feasible, using the standards set forth in [New Rule III]. The department shall consider an analysis by the applicant and any substantive relevant information either submitted by the public or otherwise available. (3) The department shall make its preliminary decision either authorizing or denying the waiver within 180 days after receipt of a complete application from the applicant. This time period may be extended upon agreement of the applicant or whenever an environmental impact statement must be prepared pursuant to Title 75, chapter 1, parts 1 and 2, MCA. (4) To the maximum extent possible, the department shall coordinate any application for a waiver with the permitting and approval requirements of other laws or programs administered by the department or by any other local, state, or federal agency.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE VI DEPARTMENT PROCEDURES FOR MAKING PRELIMINARY AND
FINAL WAIVER DECISIONS (1) The department shall issue a preliminary decision either denying or authorizing a waiver from the zero discharge requirement and shall provide a 60-day public comment period prior to issuing a final decision. The department’s preliminary and final decisions shall include the following: (a) a description of the proposed coal bed methane project and project area; (b) a determination of the estimated methane wastewater production rate for the project and the scientific basis supporting such determination; (c) a determination of the reinjection rate for each suitable geologic formation, determination of the cumulative reinjection rate for all suitable geologic formations in the project area, and the scientific basis supporting such determinations; (d) a determination that the waiver from the zero discharge requirement is necessary because estimated methane wastewater production rates exceed estimated cumulative reinjection rates for all suitable geologic formations in the project area or because the EPA will not authorize the reinjection pursuant to the SDWA; (e) a determination of the volume of methane wastewater for which reinjection is not technically feasible (and thus a waiver is necessary) and the scientific basis supporting such determination; (f) a detailed description of all the conditions applied to any waiver from the zero discharge requirement including, but not limited to, the conditions required in [New Rule III(2) through (4)], monitoring requirements, reporting requirements, limitations on the waiver granted, and methods for determining compliance with the waiver; (g) a description of the procedures for reaching a final decision on the waiver including:19-10/6/05 40 MAR Notice No. 17-231 (i) the beginning and ending dates of the comment period and the address where comments will be received; (ii) procedures for requesting a hearing and any other procedures by which the public may participate in the final decision; and (iii) name and telephone number of a person to contact for additional information. (2) The preliminary decision, accompanying a statement of basis, must be publicly noticed and made available for public comment for at least 30 days, but not more than 60 days, prior to a final decision. In providing public notice, the department shall comply with the following: (a)procedures for public notice set forth in ARM 17.30.1372;
and (b) procedures for the distribution of information set forth in

ARM 17.30.1041. (3) During the public comment period, any interested person may submit written comments on the preliminary decision and may request a public hearing. A request for a public hearing must be in writing and must state the nature of the issues proposed to be raised at the hearing. The department shall hold a hearing if one is requested. Any public hearing conducted under this section is not a contested case hearing under the provisions of the Montana Administrative Procedure Act, Title 2, chapter 4, MCA. (4) Within 60 days after the close of the public comment period, the department shall issue a final decision accompanied by a statement of basis for the decision and, if applicable, a statement of conditions. The final decision and statement of basis will be prepared according to the requirements of this section. In addition, the statement of basis for a final decision must include the following: (a) which provisions, if any, of the preliminary decision have been changed in the final decision and the reasons for the change;
and (b) a description and response to all substantive comments on the preliminary decision raised during the public comment period or during any hearing. (5) Upon issuing a final decision, the department shall notify the applicant and each person who has submitted written comments or requested notice of that decision. The notice must include reference to the procedures for appealing the decision. (6) The final decision is effective 30 days after the service of notice of the decision unless: (a) a hearing is requested pursuant to [New Rule VII], in which case the decision is effective 30 days after the final decision of the board; or (b) no comments are received on the preliminary decision, in which case the decision is effective upon issuance. (7) The board adopts and incorporates by reference ARM 17.30.1041, which sets forth requirements for distribution and copying of public notices and permit applications, and ARM 17.30.1372, which sets forth procedures for issuing public notices of MPDES permit applications and hearings. Copies of ARM 17.30.1041 and 17.30.1372 may be obtained from the Department of Environmental Quality, P.O. Box 200901, Helena, MT 59620-0901.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE VII REVIEW (1) An interested person wishing to challenge a final department decision may request a hearing before19-10/6/05 41 MAR Notice No. 17-231 the board within 30 days of the final department decision on a waiver. The contested case procedures of Title 2, chapter 4, part 6, MCA, apply to a hearing under this rule.

AUTH: 75-5-201, MCA IMP: 75-5-201, 75-5-305, MCA

NEW RULE VIII TREATMENT-BASED EFFLUENT LIMITATIONS (1) If the department grants a waiver from the zero discharge requirement for all or a portion of the wastewater pursuant to [New Rules II and III], the amount of wastewater that obtains the waiver shall achieve the following minimum technology-based effluent limitations at the end of the pipe prior to discharge: (a) calcium average concentration between 0.1 mg/L and 0.2 mg/L; (b) magnesium average concentration between 0.1 mg/L and 0.6 mg/L; (c) sodium average concentration of 10 mg/L; (d) bicarbonate average concentration of 30 mg/L and instantaneous maximum concentration of 115 mg/L; (e) sodium adsorption ratio instantaneous maximum of 0.5; (f) electrical conductivity average concentration of 233 μmhos/cm; (g) total dissolved solids average concentration of 170 mg/L; (h) ammonia average concentration of 0.1 mg/L and instantaneous maximum concentration of 0.3 mg/L; and (i) arsenic concentration of <0.0001 mg/L.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE IX STOCK WATERING EXEMPTION (1) The requirements of [New Rules I through VIII] shall not apply to any quantity of wastewater used for stock watering purposes if all the following conditions are satisfied: (a) the surface owner and operator sign a written agreement to use the wastewater for stock watering purposes; (b) the wastewater is stored in a stock tank; and (c) the surface owner has obtained a beneficial use permit from the department of natural resources and conservation pursuant to Title 85, chapter 2, MCA. (2) The stock watering exemption shall be limited to the quantity of water for which the department of natural resources and conservation issues a beneficial use permit.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

NEW RULE X SEVERABILITY (1) If any provision of [New Rules II through IX] is determined to be invalid or unenforceable, such provision shall be fully severable and the other provisions thereof shall remain in full force and effect. The remaining provisions shall be liberally construed to carry out the provisions of this subchapter.

AUTH: 75-5-305, MCA IMP: 75-5-305, MCA

REASON: Why Minimum Technology-Based Controls and Treatment Requirements are Necessary19-10/6/05 42 MAR Notice No. 17-231 The Board is proposing the adoption of New Rules I through X to establish minimum technology-based controls and treatment requirements for the coal bed methane industry in response to a petition filed by Northern Plains Resource Council, Tongue and Yellowstone Irrigation District, Surface Owners of the Wolf Mountains Area, Bear Creek Council, Stillwater Protective Association, Bull Mountain Land Alliance, Rosebud Protective Association, Dawson Resource Council, Carbon County Resource Council, Bones Brothers Ranch, Muggli Brothers, Huggo Muggli Inc., Golder Ranch, Greenleaf Cattle Company, Rocker 6 Cattle Company, FL Ranch, and Fix Ranch (collectively referred to as "petitioners"). The minimum technology-based controls and treatment requirements proposed by the petitioners are a combination of "zero discharge" and treatment-based effluent limitations. The effluent limitations proposed by the petitioners will prohibit the discharge of wastewater by requiring reinjection into suitable geologic formations unless the operator can demonstrate that site-specific geologic conditions make zero discharge technically unfeasible. To the extent zero discharge is not technically feasible because of site-specific geologic limitations, the rules impose effluent limitations at the end of the pipe prior to discharge based upon existing treatment technologies such as ion exchange or reverse osmosis. The reasons for adopting minimum technology-based controls and treatment requirements for the coal bed methane industry are stated in the petition and are summarized as follows:

1. Currently, there are no technology-based treatment requirements for the coal bed methane industry adopted by the U.S. Environmental Protection Agency (EPA) under the federal Clean Water Act (CWA). Since the Board has the authority to adopt treatment requirements for a particular industry when EPA has failed to do so, the petitioners have requested the Board to initiate rulemaking to establish technology-based controls and treatment requirements for discharges from the coal bed methane industry. See 75-5-305(1),

MCA. 2. The purpose of the treatment requirements is to require coal bed methane operators to use the best available technology that will minimize the discharge of wastes and make substantial progress toward the ultimate national goal of eliminating the discharge of all pollutants. 3. The reason for requiring reinjection of all coal bedmethane wastewater into suitable geologic formations (unless reinjection is technically unfeasible) is to maximize the volume of water that will be put back into aquifers from which it was taken. This requirement will alleviate the draining of aquifers and the drying up of wells and springs that are used by petitioners. 4. The reason that water must be reinjected into "suitable geologic formations" (i.e., aquifers with water of similar quality to coal bed methane wastewater) is to ensure that the water resource is available for beneficial use in the future. For this reason, reinjection into deep geologic formations that are considered Class II wells under the Safe Drinking Water Act's Underground Injection Control (UIC) program is not allowed under the rules because the water quality in those formations typically will not qualify as being "suitable geologic formations." 5. The reason for adopting technology-based effluent limits for discharges of coal bed methane wastewater to surface water is to ensure that treatment to a minimum level is used on the volume of methane wastewater that cannot be reinjected due to technical infeasibility.19-10/6/05 43 MAR Notice No. 17-231 The Board's Authority to Adopt Minimum Treatment Requirements

Under 75-5-305(1), MCA, the Board may adopt minimum treatment requirements for an industry when there are no federally promulgated treatment requirements for the industry. Prior to adopting such requirements, the Board must ensure that: (1) the technology-based standards address parameters that "are likely to affect beneficialuses;" and (2) the technology-based requirements are "costeffective and economically, environmentally, and technologically feasible." The petitioners' scientific, economic, and technical basis for the Board's adoption of minimum treatment requirements are described in the Petition and are summarized as follows:

1. Parameters that are likely to affect beneficial uses

The proposed new rules will establish effluent limitations for the following parameters found in methane wastewater: Sodium adsorption ratio (SAR) and its individual constituents (sodium, magnesium, and calcium); salinity as measured by electrical conductivity (EC); ammonia; bicarbonate; total dissolved solids (TDS); and arsenic. All of these parameters are likely to affect beneficial uses of surface waters. Specifically, high levels of salinity, as measured by EC and SAR, may adversely impact native soils, native vegetation, and irrigated crops. Water with high salinity levels causes changes in soil structure that make water less available to plants and, at very high levels, can directly harm or kill plants. The EC levels of methane wastewater have a high salinity hazard with a mean value of between 2000-2300. The SAR value affects plant production by reducing the permeability of soils and slowing water infiltration. This lower availability of water reduces plant productivity. The SAR level of methane wastewater is high with a mean value of 34 to 51. Soils with high clay content or with poor drainage are most vulnerable to these impacts. Salinity levels (EC) can also adversely impact aquatic life. During the 2003 rulemaking process, the Montana Department of Fish, Wildlife, and Parks raised these concerns. Bicarbonate can also be harmful to aquatic life. Methane discharges from Fidelity’s CX Field are characterized by bicarbonate concentrations of between 1400-1600 mg/L. Ammonia is listed as a toxic pollutant in Montana's Water Quality Standards. Ammonia can pose acute and chronic toxicity to aquatic life at extremely low levels. Methane discharges are characterized by ammonia concentrations averaging 2.0 mg/L.

2. Technological feasibility of the treatment requirements

(a) Reinjection

Reinjection of methane wastewater is a widespread control technique in many geologic basins, including the Wyoming portion of the Powder River Basin. The methane industry employs two types of reinjection. Where the water quality of the methane wastewater has extremely high salinity levels and is not suitable for any beneficial uses, the wastewater is reinjected into deep geologic formations through Class II injection wells under the Safe Drinking Water Act (SDWA), 42 USC 300f to 300j-26, Underground Injection Control (UIC) program. Where the water quality of the methane wastewater has lower salinity levels and is marginally suitable for some beneficial uses, the wastewater is reinjected into shallower19-10/6/05 44 MAR Notice No. 17-231 geologic formations through Class V injection wells under the UIC program. The purpose of the UIC program is to protect aquifers from the adverse impacts of reinjection and to protect aquifers that serve as sources of drinking water. In the San Juan Basin of Colorado almost 100% of methane wastewater is reinjected to deep geologic formations through Class II injection wells. In the West Uinta Basin of Utah, approximately 97% of the methane wastewater is reinjected to deep geologic formations through Class II injection wells. In the Raton Basin of Colorado, approximately 30% of methane wastewater is reinjected to deep geologic formations through Class II injection wells. In the Raton Basin of New Mexico, 100% of methane wastewater is reinjected to deep geologic formations through Class II injection wells including methane development on Ted Turner’s Vermejo Ranch. In the Wyoming portion of the Basin, there are approximately 160 active reinjection wells of the approximately 324 permitted by WDEQ, most of which are shallow Type V injection wells. The WDEQ has drafted three general permits authorizing reinjection. According to John Passehl (Personal Communication April 15, 2005), the Program Principal of UIC program at WDEQ, about 25 companies have done reinjection including Anadarko, JM Huber, Bill Barrett, Continental Industries, Devon, Double Eagle, Marathon, McCartney, Merritt, Northwestern, Petrox, Prima, and Wolverine. Nance Petroleum is reinjecting wastewater from its methane operations into shallow sandstone formations just south of the Montana board in Hanging Woman Basin, a tributary of the Tongue River.Achieved reinjection rates are highly dependent on sitespecific conditions and vary widely within a range of 12 to 117 gpm per reinjection well. Currently approximately 150,000 gallons/day/well is being reinjected. The WDEQ limits reinjection to aquifers with the same classification as methane wastewater to ensure the water remains suitable for beneficial use.

(b) Reverse Osmosis

Reverse osmosis is used to treat methane wastewater in the San Juan and Raton Basins of Colorado. The WDEQ has approved one NPDES permit requiring treatment using reverse osmosis prior to discharge. The EPA issued a permit requiring reverse osmosis treatment of methane wastewater on the Southern Ute Indian Reservation (NPDES Permit COG-075000). Encana Oil and Gas, Inc. is also using reverseosmosis to treat methane wastewater in Colorado, Permit No. COG600633, Colorado Water Quality Control Division, Department of Public Health and Environment. Devon Energy has submitted an application with Region 8 of the EPA for a NPDES permit for 5-15 pilot projects on the Wind River Indian Reservation and is proposing to use reverse osmosis. The EPA is currently drafting the NPDES permit. Hydrometrics, Inc., has demonstrated a system by which 95% of treated water may be discharged to the surface as usable quality water. The company uses a Weak Acid Cation Resin treatment as part of their "High Efficiency Reverse Osmosis" (HERO) process to treat methane wastewater to remove major cations, anions, and trace constituents.

(c) Ion Exchange Technology

Several companies in the Wyoming portion of the Basin are using Higgins Loop and Emit ion exchange technology to treat methane wastewater prior to discharge.19-10/6/05 45 MAR Notice No. 17-231 The Montana Department of Environmental Quality recently approved a MPDES permit for Powder River Gas, LLC, which intends to implement ion exchange treatment technology prior to discharging to the Tongue River. Fidelity has proposed using a similar ion exchange technology to treat wastewater prior to discharge into the Tongue River. Ion exchange technology is capable of reducing sodium levels to less than 0.5 mg/L and SAR levels to below 0.1. The treatment technology is capable of reducing EC levels to about 233 μmhos/cm and total dissolved solids to about 170 mg/L. In summary, reinjection into suitable geologic formations to the maximum extent feasible based on site-specific conditions and treatment of the remaining wastewater prior to discharge is technologically feasible. As demonstrated above, reinjection and treatment are being employed by methane operators in the Basin of Montana and Wyoming and other geologic basins in the West.

3. Economic feasibility

Reinjection and treatment is not only economically feasible, but also profitable for the methane industry. Assuming a gas price of $3.61 Mcf, methane companies will still earn a 23%-36% return on investment in Montana when reinjecting wastewater into suitable shallow geologic formations to meet the zero discharge requirement. If an operator obtains a limited waiver from the zero discharge permit requirement because reinjection of 100% of the wastewater is not technically feasible, and uses a combination of shallow reinjection wells to meet the zero discharge requirement and reverse osmosis technology to treat the volume of wastewater, the operator will still earn a 27%-31% return on investment in Montana. While cost data on ion exchange treatment technology are not available from the industry, use of such technology is clearly profitable for the industry given the fact that Powder River Gas, LLC, is currently using the technology in Montana and Fidelity has proposed using it. The petitioners rely upon the EPA Region VIII draft economic analysis for several control and treatment options being considered for the coal bed methane industry, including zero discharge through reinjection and reverse osmosis treatment technology. See Petition, Exhibit C, "Guidance for Developing Technology-Based Limits for Coal bed Methane Operations: Economic Analysis of the Powder River Basin". The EPA document was prepared using economic and engineering data provided by the methane industry. The EPA report assesses economic impacts on the methane industry caused by implementing technology-based requirements in terms of impacts to economically recoverable methane reserves, number of projects developed in the basin, and royalties and taxes generated. Where applicable primary source information was available in the draft document, it was used. The EPA Report found that wellhead gas price had a significant effect on the economic impact of technology-based effluent limitations. The EPA assessed the economic impacts of the methane industry assuming a conservative wellhead price of $1.75 Mcf. The average wellhead price between 1986-1999 was $2.05 per Mcf. The EPA estimated an equilibrium wellhead price of $2.72 per Mcf. The average realized well head price in 2001 was $4.12 per Mcf. The Department of Energy conservatively predicts a wellhead price of $2.88 per Mcf in 2005 and $3.29 in 2010 Mcf. In recent years, realized wellhead prices in the Basin have exceeded $5.00 Mcf. At a conservative well head price of $1.75 Mcf, the Petitioner's estimate that methane production in the basin will generate almost $30 billion in profits to the industry. If the wellhead price of gas remains above $1.75, the predicted economic19-10/6/05 46 MAR Notice No. 17-231 impacts on methane industry will be significantly less than those predicted by EPA.

4. Environmental Feasibility

The proposed rules establish minimum treatment requirements that minimize the degradation to the environment compared to other disposal methods typically used for coal bed methane wastewater. See next section.

5. Other Alternatives to the Proposed Control and Treatment Requirements Considered by the Petitioners

Alternatives to the requirements to reinject CBM wastewater into Class V wells as a means to achieve zero discharge have been rejected for the following reasons:

a. Reinjection into Class II wells would make it impossible for farmers and ranchers to use the reinjected water due to the expense of drilling and operating deep wells. In addition, the CBM water would likely become contaminated by the much worse water quality found in most deep geologic formations. b. Evaporation pits were eliminated as a means to achieve zero discharge due to the loss of the water resource to future generations and the fact that such impoundments disturb large areas that would need to be reclaimed. c. In-channel impoundments using infiltration and evaporation as a means of disposal were rejected because such impoundments could result in unauthorized discharges to surf ace waters resulting from impoundment failure or overflow and would also cause saline seep. d. Off-channel impoundments using infiltration and evaporation as a means of disposal were rejected because such impoundments would capture natural surface runoff, interfere with the hydrological cycle, and cause impacts to vested water rights. e. Land application of CBM wastewater was rejected because such disposal methods could adversely impact soil structure, kill native vegetation, contaminate shallow aquifers, and increase salt loading to nearby streams through return flows.

5. Concerned persons may submit their data, views or arguments, either orally or in writing, at the hearings. Written data, views or arguments may also be submitted to the Board Secretary at Board of Environmental Review, 1520 E. Sixth Avenue, P.O. Box 200901, Helena, Montana, 59620-0901; faxed to (406) 444- 4386; or emailed to ber@mt.gov, no later than 5:00 p.m., December 2, 2005. To be guaranteed consideration, mailed comments must be postmarked on or before that date.

6. The Board of Environmental Review will preside over and conduct the hearings.

7. The Board maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding: air quality; hazardous waste/waste oil; asbestos control; water/wastewater treatment plant operator certification; solid waste; junk vehicles; infectious waste; public water supplies; public sewage systems regulation; hard rock (metal) mine reclamation; major facility siting; opencut mine reclamation;strip mine reclamation; subdivisions; renewable energy grants/loans ; wastewater treatment or safe drinking water revolving grants and loans; water quality; CECRA; underground/above ground storage tanks ; MEPA; or general procedural rules other than MEPA. Such written request may be ma iled or delivered to the Board Secretary at Board of Environmental Review, 1520 E

. Sixth Ave., P.O. Box 200901

, Helena, Montana 59620-0901; faxed to (40 6) 444-4386; emailed to ber@mt.gov; or may be made by completing a re quest form at any rules hearing held by the Board.

8. The bill sponsor notice requirements of 2-4-302, MCA, do not apply.

Reviewed by: BOARD OF ENVIRONMENTAL REVIEW

John F. North BY: Joseph W. Russell JOHN F. NORTH JOSEPH W. RUSSELL, M.P.H., Rule Reviewer Chairman

Certified to the Secretary of State September 26, 2005.

19-10/6/05 47 MAR Notice No. 17-23148

## REFERENCES

Advanced Resources International, 2002, “Powder River Basin Coal Bed Methane Developm ent and Produced W a ter Managem e nt Study”, U.S. DOE, Office of Foss il Energy and NETL, Strategic Center fo r Natural Gas, Novem b er 200 2.

Arthur et al 2003, “Coal Bed Methane Produced W a ter: Managem e nt and Beneficial Use Alternatives, 2003.

Arthur et al, 2005, “Coal Bed Methane in the Powder River Basin of Montana,” Ground
Water Protection Council' s Annual Foru m , Portland, Oregon, Septem ber, 2005

.

Ayers and Westcott 19 94, “ W ater Quality fo r Agriculture”, IRRI GATI ON AND DRAINAGE PAPER, 29 Rev. 1 (Reprinted 1989, 1994), http://www.fao.org/DOCREP/003/T0234E/T0234E00.htm # TOC

Batm anghelidj 1995, “Y our Body’s Many Cries for W a ter”, Global Health Solutions, Falls Church, VA., 1995.

BLM 2003, “Final S t atewide Oil and Gas Envi ronm ental Impact Statem ent and Proposed

Am endm ent of the Pow d er River an d Billings R e source Managem e nt Plans,” Bureau of Land Managem e nt (Miles City and Billin gs Field Of f i ces), th e Montana B o ard of Oil and Gas Conservation and the Montana Departm e nt of Environm ental Quality, January 2003.

BLM 2003a, Record of Decision, B u reau of Land Management, April 2003.

BoR 2003, “Desalting Ha ndbook for Planners, 3 rd Edition”, Bureau of Recla m ation, July

2003.

Cox, D 2001, “Coal bed Methane in the Rockies, Christm a s Past, Present and Future,” SPE Sym posium on CBM in the W e st ern US, Denver, CO, Jan 2001.

CSU, http://www.coope xt.colostate.edu/TRA/PL ANTS/index.htm l #http://www.colostate.edu/ Depts/CoopExt/TRA/PLANTS/sar.htm l

EPA 1997, “ G uide to Docum e nting Cost and Perfo r m ance for Rem e diation Projects”, Federal

Re m e diation Technologies Roundtable, Novem b e r 1997.

EPA 2002, “ P rotecting D r inking W a ter through U nderground Injection Control,” Drinking Water Pocket Guide #2 EPA 818-K-02-001, January 2002.

EPA 2005, “ C urrent National Recomm e nded Water Quality Criteria”, http://www.epa.gov/waterscien ce/criteria/wqcriteria.htm l

Israelsen and Hanson, Irrigation Pr inciples and P r actices, 1950.

49Holdren and Nelson, “Water Supply and W a ter Quality in Totten Reservoir, Montezum a County, Colorado Technical Mem o randu m No. 8220-98-09”, from website: http://www.usbr.gov/pmts/e co_research/9809.htm l#9809d

Likwartz. D. 2005, W y om ing Oil and Gas Comm ission, personal communication, 2005.

MBMG 2001, Montana Bureau of Mines and Geology, Groundwater Inform ation Center Database, http://m bm ggwic.m t ech.edu/ , March 2001.

McLellan M.W

. et al 1990, Cross sections s howing the reconstructed stratigraphic fram e w or k
of Paleocen e rocks and coal beds in the nor thern and central Powder River Basin, Montana
and W y om i ng. USGS Misc. Invest Map I1959A.

MBOGC 200, Record of Decision, Montana Bo ard of Oil and Gas Conservation, March 2003.

ORNL 2002, “Methane Extraction and Ca rbon Sequestration”, O a k Ridge National Laboratory, Review Vol. 35/No. 2, 2002.

Osborne and Ada m s 2005, “Coal Bed Natural G a s and W a ter Managem e nt in the Powder River Basin”, Southwest Hydrology, Vol. 4/No.4, Nove m b er 2005.

Palm er and Varzi, 2004, “Prelim i nary Changes in a CBM Re servoir during Production, an Update and Im plications for CO 2 Injection, ” 200 4 Intern atio nal CBM Symposium Univers ity
of Alaba m a, May 2004.

Pritchett, R. W

. , 2002, “Hanging Wom a n Bas i n Project,” prepared for Caribou Livestock Montana, L L C, February 2002.

Rice, Ellis, and Bullock 2000, “ W ater Co -Produced with Coal Bed Methane”.

Thyne, G, 2005, “Produced W a ter Managem e nt and Beneficial Uses,” Petroleum
Environm ental Research Forum

, Annapolis, Maryland, November 2005.

USGS 2000, “ W ater Co-produced with Coal Bed Methane in the P o wder River Basin, Wyom ing: Prelim inary Com positional Data”, USGS Report 00-372, 2000.

USGS 2001, “ W ater-Resources Inv e stig ations Report 01-427 9”, Decem ber 2001.

USGS 2005, W a ter Quality Re ports, as found on website: http://wy.water.usgs.gov/pro jects/qw/data2005/index.htm

Wheaton and Lopez 2005, Montana Bureau of Mines and Geology, Personal Communication,

2005.

50

## DISTRI BUTION LIST

2 MS0755 Mike Highto w er, 6202

2 MS0706 Allan Sattler, 6113

2 MS0706 Maly n d a Aragon, 611 8

2 MS0918 Central Tech nical Files, 8945-1

2 MS0899 Technical Library

, 961 6

10 William Hochheiser, Manager

Oil and Gas Environm ental Rese arch

U.S. Department of Energ y
Office of Fossil Energy (F E-30)

1000 Indepen d ence Ave. SW

Washington, DC 20585

51525354