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The Energy Council

is a nonprofit trade organization that promotes safe and responsible oil and natural gas development in La Plata County. Individual and company members work to build community relations, increase public understanding, and address public issues relative to the industry.

Gas Facts : Gas Well Life Cycle

Spacing

In today's natural gas industry the first step in the life cycle of a well begins with government regulations. Each formation currently accessible to natural gas extraction is spaced by the Colorado Oil and Gas Conservation Commission. This means that the COGCC has determined how many wells per section will adequately drain the resource (A section consists of 640 acres). The Fruitland formation in La Plata County is generally spaced at one well per 160 acres, with certain areas of the county spaced at 80 acres. The Pictured Cliffs and Mesa Verde formations in La Plata County are spaced at one well per 320 acres and the Dakota formation is spaced at 640 acres. In the Red Mesa field, oil wells in the Dakota formation are spaced at approximately one well per 40 acres. For more information about specific spacing and formations in a certain location, contact the COGCC.

The diagram above shows how a 640-acre section is divided for 160-acre spacing. To assure correlative rights, an operator must produce gas from the "drilling window" thousands of feet below the surface. At the surface, the drilling window is a starting point from which operators seek to locate a well site.

The potential producer must acquire the right to develop the natural gas reserve. Typically a natural gas operating company (operator) acquires a lease for mineral rights by entering into a contractual agreement with the mineral owner. The mineral owner receives royalties from any production that may result.

In some cases, a small-percentage mineral owner may object to granting a lease, thereby stopping natural gas development in a spaced area. The COGCC has rules that enable development to move forward though a process known as "forced pooling." A forced-pooled mineral owner also receives royalties.

The operator or producer can sever the formations and assign certain formations to another operator to develop.

Siting and Consultation

The next step is geologic and seismic studies to locate the best possible underground source of natural gas, either in sandstone or coal formations. After the studies are completed, companies typically select an optimal site. Then well location and right-of-way easements for road access are negotiated with the surface owners. During this phase companies work closely with surface owners to locate the well site within the regulated spacing window. A window determines the underground area within a spaced unit where a well may be drilled and is specified by the COGCC. Sometimes a gas well may be located outside the window when special circumstances arise such as above ground geography or a special landowner request -- typically agriculture-related.

The COGCC requires operators to ask for a consultation with the surface owner for well locations, access roads, wildlife and interim reclamation. Operators typically negotiate a surface agreement regarding the "reasonable use" of the surface during drilling, production and reclamation of the well site. In practice, companies generally pay surface owners for limited land use despite the fact that the law permits reasonable access and use without compensation. If a surface agreement cannot be successfully negotiated, COGCC rules allow companies to post a surface bond with the state. A bond is intended to protect surface owners from "unreasonable crop losses or land damage from the use of the premises" -- not for perceived economic loss associated with mineral owner access.

Permitting

Permitting is the next step in the process. State permits are required for wells in La Plata County. Wells may also require county or federal and/or tribal permits. During the permit process, environmental, surface, and wildlife issues are addressed.

Drilling and Casing

Drilling a gas well is a highly orchestrated event usually done by drilling contractors. Drilling contractors are rigorously trained to work efficiently and safely. Drilling rigs and crews are expensive and brought on the site for immediate action. Because of the safety, technical concerns and expense, drilling rigs operate 24 hours a day until the drilling is completed. For example, if drilling is stopped, the drilled hole can cave in and potentially cause multiple safety and environmental problems. Once drilling is completed, the rig and crew move to another location.

Anywhere from one to three acres are needed for the drilling pad; however, pads can be much larger if directional drilling is employed for the shale formations. The well pad is prepared for a variety of heavy equipment needed during the drilling operation. After drilling is completed and interim reclamation is complete, the well pad is reduced to between 1/2 and 1-1/2 acres.

The drilling process requires the power of multiple diesel engines. Actual drilling time can be anywhere from 3 to 10 days -- more for directionally drilled or deeper zone wells. State noise regulations allow for short-term construction noise within prescribed safety limits. Sound diminishes with distance, but precautions are taken for workers in close proximity to sound sources. Nearby residents are notified in advance of drilling activity.

Typically well drilling to casing goes like this -- a 12-1/4" diameter hole is drilled to a minimum of 200 feet and to a maximum depth 50 feet below the deepest registered domestic water well in the area. Surface casing is put into this hole. Surface casing is 1/2" thick steel pipe with an outside diameter of 8-5/8". Cement is poured between the hole, and the steel casing and is approximately 2" thick all the way up to the surface. Cement is allowed to dry, then the 7-7/8" production hole is drilled 200 feet below the target formation also known as the completion zone. Production casing is then put into the hole. Production casing is 3/8" steel pipe with an outside diameter of 5-1/2". Again cement is poured between the hole the steel casing measuring about 1" thick all the way up to the surface.

Cement seals off formations to prevent fluids from migrating. For example, cement protects fresh water in one formation from methane gas in another. Cement also protects the steel casing from the corrosive effects of other formation fluids. Casings are checked for integrity before the well construction process continues. In some deeper natural gas wells, intermediate casing is needed because some formations are encountered that contain abnormal pressures and/or conditions.

In the completion zone, the production casing is perforated so that natural gas can flow into the production tubing. Production tubing is set in place after the completion process and is 1/4" steel tubing with an outside diameter of 2-7/8" running from the bottom of the hole to the surface. At the bottom of the hole, 40 feet of cement is poured with a plastic plug on top to complete the sealed well bore.

In comparison domestic water wells are required to be cased with only 0.188" steel pipe, or 0.2" plastic pipe, or 3" cement, with a minimum 4-1/2" outside diameter.

Gas wells are separated from the surrounding surface formations by 4-1/8" of steel pipe and cement that make up a well's casing. Casing is designed, among other things, to isolate gas wells from any nearby domestic water wells. This diagram is not to scale and has been dramatically shortened.

Completion

Completion not only refers to the target formation, "the completion zone," but is also a term used to describe well construction activity after the drilling and casing is finished. To complete a well, the permeability of the completion zone must be enhanced so that gas can flow out of the sandstone or coalbed in which it is trapped. To enhance permeability hydraulic fracture stimulation (commonly referred to as "fracing" -- pronounced frak-ing) is conducted. Fracing is done by pumping a mixture of sand and water down to the base of the well and back out again. The gritty water permeates the underground formation enabling the gas to flow from the cracks and holes created. Fracing is generally done once but may be repeated several times before gas flows are sufficient. Fracing uses the power of multiple diesel engines and can take from 30 minutes to several hours.

Interim Reclamation

After a well is drilled, all areas which were disturbed by the drilling operations, and which are not needed for production operations, are to be reclaimed as close to their original condition as possible.

The interim reclamation is required by the COGCC. Operators revegetate the landscape, re-contour, soil till, reseed, and conduct weed and soil erosion prevention. Sometimes interim restoration and revegetation is negotiated in the surface agreement with the landowner.

Production

After completion, pipeline construction connects the well to the natural gas transportation system. Natural gas is transported through a system of pipelines to a processing plant. It goes through a series of separation and purification procedures to make it ready for consumer use. Natural gas is processed at plants here in La Plata County (See Processing section for more information). Along with natural gas, water also is produced from a well. Water is separated from the gas at the well site. Water is transported off the well site in one of two ways, by pipeline or by truck. A pipeline system transports the produced water to an injection well. Injection wells are drilled into deep formations, often below 10,000 feet. The EPA has regulations for injection wells, which are overseen by the COGCC. These regulations are specifically designed to prevent contamination of underground sources of drinking water.

Compression

Natural gas is transported in pipelines. The amount of gas that can be transported in a pipeline depends upon how much the gas is compressed. The more the gas is compressed, the greater the volume of gas that can be transported through the pipeline. Uncompressed gas is displaced by compressed gas, essentially stopping the flow of uncompressed gas to the processing plant.

Gas compression can either take place right at the well site as it enters the pipelines system, or it can be transported by pipeline to a compression facility, where it is compressed and then transported to a processing plant. On-site compression is done with small electric or gas-powered compressors. A compression facility contains large electric or gas-powered compressors and is surrounded by a sound absorbing structure. The type of compression used by companies depends upon economic factors and gas well location concerns -- if a well is too remote, it is more difficult to tie the well into a compression facility. Some companies try to cluster well sites so that a centrally located compression facility can serve the needs of many wells, thus reducing the noise associated with gas compression.

Workover

During the life of a well, it may need additional work to improve performance; this is called a workover. Hydraulic fracturing along with other workover activities will result in temporary rig activity on the well pad.

Recompletion

Recompletion is a way of reusing an existing well to gather more natural gas from either the same formation or different formations. Recompletion means changing or adding completion zones (target formations) through one of the following ways: 1) Recompletion to the same zone but to the side of the original hole, 2) Recompletion to a different zone or 3) Recompletion to multiple zones from one well. The COGCC carefully regulates and permits recompletions as new well permits. Recompletions require rig activity that lasts for several days.

Temporary Shut-in

Sometimes the price of natural gas is so low that the cost to produce and process it is higher than the production revenue and creates an economic situation where a well is temporarily shut-in. The well may later be put back into production. This temporary shut-in is regulated by the COGCC for safety and reporting purposes.

Plugging and Abandonment

After all the recoverable natural gas has been drained at a well site, the well is plugged and abandoned. The COGCC has rules that specify how the well is plugged, soil reclaimed and other environmental and safety protections completed to avoid future problems. Final reclamation takes place after gas wells are plugged and abandoned.

Because La Plata County has had natural gas production since the early part of the century, some gas wells were plugged and abandoned prior to the COGCC's rules. The state has a special fund supported by natural gas severance taxes for the plugging and abandonment of "orphaned" wells in the state. An orphaned well is a well for which an owner or operator cannot be found or is unwilling or unable to plug and abandon the well. In these instances, required bond and fund money paid by industry is used by the COGCC to plug an orphaned well.

Natural Gas Processing

Safety and environmental protection are top priorities at local processing plants. Safety training, regular safety meetings, emergency drills, coordination with local fire departments and emergency personnel are all part of normal operations. Plants must also meet strict federal safety and environmental standards and comply with state and local regulations.

Natural gas processing may be as simple as drying the gas by passing it through a fixed bed of absorbent material, or it may be as complex as liquefaction of gas by cooling to extremely low temperatures.

La Plata County is home to a number of natural gas processing plants. At these plants, raw gas is processed to remove undesirable components such as water and separated into distinct gas products such as methane, ethane, butane, propane and others. One plant in La Plata County supplies the majority of propane used in a 150-mile radius.

The processed natural gas from La Plata County travels through other pipelines to commercial markets around the United States.