Rancher, oil co. lock horns | TSLN.com

Rancher, oil co. lock horns

Eric Brown
For Tri-State Livestock News

It's a battle Allen Heim and others in the oil and gas world weren't expecting, and one that northwest Nebraska landowners aren't letting die quietly.

Heim's company, T-Rex Oil Inc. based in Broomfield, Colo., went above and beyond, he says, in getting needed approval to develop a commercial injection well in Sioux County, Neb., which would take in wastewater from oil and gas drilling sites locally and from surrounding states, according to the plan. And, if it comes to fruition, it would be half the size of the operation detailed in the original proposal that caused initial concerns among nearby residents.

But none of that has halted the anxiety of local landowners like Jenny Hughson – concerns that have been well-documented through media coverage, packed public hearings, proposed legislation and appeal filings aimed at overturning the decisions of Nebraska's oil and gas officials.

"We really didn't see this coming," said Heim, vice president of operations at T-Rex, who has about 30 years of experience in the industry. "It's common to see questions among nearby residents when something like this is proposed. It's a lot of information to process. That's understandable.

"But the magnitude of this pushback was unexpected."

In waste water disposal, treated waste water from oil and gas drilling operations is injected into the ground between impermeable layers of rocks to avoid polluting fresh water supplies, or adversely affecting quality of receiving waters. Injection wells are usually constructed of solid walled pipe to a deep elevation in order to prevent wastewater from mixing with the surrounding environment.

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Injection wells are believed by many in the industry to be the best method for disposal of treated waste water.

However, that belief doesn't quite cut when it comes to Hughson, whose red and black angus operation has been in her husband's family for generations, and sits adjacent to where the new commercial injection well would be in operation.

"There's just such a level of uncertainty with all of it," said Hughson, who, along with another land owner, Jane Grove, filed an appeal with the Cheyenne County District Court this month, in hopes of overturning a Nebraska Oil and Gas Conservation Commission (NOGCC) decision in April when it voted 2-0 to approve the injection well. "There are just too many unknowns."

Hughson, whose ranch is spread across 10 sections, hesitates none in listing her concerns with having the potential of a wastewater injection well in her neck of the woods; contamination of the aquifer beneath her ranch; wastewater spills on the surface; increased truck traffic and the impact that will have on roads and the safety hazards that creates for the four schools in the area – two near Harrison, and two near Mitchell.

In the appeal, the neighboring landowners state that the NOGCC does not have jurisdiction to approve the well, because the facility would dispose of wastewater produced from other states, like Colorado and Wyoming.

But Stan Belieu, NOGCC deputy director, says his office does indeed have the authority to approve such permits, and that their ability to do so in Nebraska falls under rules that are basically uniform throughout the U.S.

Additionally, he noted that wastewater from surrounding states has been disposed of in Nebraska for a number of years.

Also alleged in the appeal is that the NOGCC did not consider letters from concerned groups in the area, and that the NOGCC did not take into account records regarding production of water from the existing oil well that would be converted for wastewater injection, as well as two other nearby wells.

Because of the recent filing, Belieu said he cannot discuss specifics on the issue, but noted that in general the NOGCC always takes all public input into consideration, and examines all available data.

For weeks now, Belieu and Heim have been trying to convince Hughson and other surrounding landowners of the safety of these injection wells.

"It's very understandable that everyone in this area has questions," said Heim, who, despite working for a Colorado-based company, has Nebraska roots, and still lives in Kimball, Neb. "The landowner who agreed to have this put on his land had many, many questions himself. But he did his due diligence with us and decided it was a worthwhile endeavor."

"Really, he ran us through the mill."

The owner of the land where the injection well will operate did not return calls to provide comment on this topic.

Heim added that T-Rex has tried to find common ground with neighboring landowners.

The original permit called for the facility to allow up to 10,000 barrels of wastewater per day, which, if used at capacity, could result in as many as 80 trucks traveling to the site per day.

Heim said testing the sight showed the injection well could take in more than 10,000 barrels per day, but in the end, the company agreed to file a permit that cut operations in half – a maximum of 5,000 barrels per day, which would also reduce the amount of trucks traveling in the area.

Additionally, Belieu and other officials with the NOGCC say T-Rex went above and beyond in their due diligence in acquiring the permit for the injection well.

Belieu further explained that injection wells have been in use in Nebraska since 1962, and today there are just over 100, with most of those developed and used by single companies drilling in the nearby area.

But among those wells are four commercial injection wells, which are larger operations, allowing many drillers from a wider area to use the facility to dispose of its excess wastewater. Those have been in operation in Nebraska since the 1990s.

The new well near Sioux County would be a commercial injection site.

In regard to the concerns of Hughson and others, Belieu said that after decades of use, Nebraska has never seen seismic activity from its injection wells, and they've never caused contamination.

"It seems like the issue here is that this is something new to this specific area, and we didn't do a very good job of educating the public," Belieu said.

He added that the size of the new project is also what's drawing attention, but noted that a similar-sized facility is already operating successfully near Kimball, Neb.

Heim said he believes that the injection well would add economic value to the area – providing four to eight well-paying jobs in a sparsely populated part of the state, along with supporting industries, like restaurants for the truckers, and also has the potential to draw more oil and gas companies to the area to drill.

But still, Hughson, overseeing a ranch she plans to pass down to future generations, said the risks aren't worth it.

While, Nebraska hasn't had issues with injection wells causing earthquakes and contamination, those problems have taken place elsewhere.

The appeal filed by Hughson and her neighbor is only the latest development surrounding this injection well.

Nebraska lawmakers this spring unsuccessfully called for the NOGCC to delay its decision on the injection well's permit, but successfully made a request for a Nebraska Legislature committee to be appointed to review wastewater injection during the summer session.

In addition to the potential success of the appeal, many Sioux County residents are hoping the Nebraska Legislature committee will help prevent the injection well from coming to fruition.

"There's just too much at stake," Hughson said.

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