Organic farms fill the valley around the North Fork of the Gunnison River, one of the largest concentrations of them in the state, but Natasha Leger, executive director of the nonprofit Citizens for a Healthy Community, looks upstream — at 100,000 acres of federal land where oil and gas leasing could take off. The U.S. Geological Survey has estimated shale deposits there could hold the second-largest natural gas reserve in the state.
Just 40 oil and gas wells exist in Gunnison County, but future development could bring that near 1,000, she says, “and that would completely industrialize the watershed.”
North Fork Valley farmers speculate about the potential for an oil spill, or losing their customers’ confidence that their food is safe, should energy development take off.
But, oil and gas operators stand confidently behind their practices to protect water and the environment. “Especially here in semi-arid Colorado, every drop of water counts,” says Dan Haley, president and CEO of the Colorado Oil and Gas Association (COGA). “We are committed to the protection and responsible use of water resources at every stage of operations.”
In recent decades, Colorado lawmakers have updated rules for the oil and gas industry and even issued a “mission change” for the state agency that permits oil and gas well development. The actions include requiring groundwater testing before and after drilling and boosting financial requirements for cleaning up orphaned wells, all to better protect water from potential contamination. In the last year, the state also started working with stakeholders to reduce freshwater consumption. Through this string of updated rules, Colorado is touted as a national leader. From an industry perspective, it’s been a dizzying string of new rulemakings, but environmental watchdogs see a need for more work yet to be done.
Protecting Water Quality
Several state agencies monitor water use, public health, and potential contamination around the oil and gas industry, but the Energy and Carbon Management Commission (ECMC), formerly the Colorado Oil and Gas Conservation Commission, manages the bulk of industry oversight. The commission’s name changed, effective July 2023, to expand the agency’s regulatory authority beyond oil and gas. This came four years after a shift in the agency’s overarching responsibility from fostering the industry to regulating it — referred to as the “mission change”— which was the result of 2019 legislation, Senate Bill 181.
With that change, says John Messner, ECMC commissioner, the state also made a big regulatory stride for water quality with new requirements for the cement and steel used to encase well holes drilled thousands of feet underground to access fossil fuels.
These new wellbore integrity rules include water quality monitoring and health checks at wells, isolating fluids to protect groundwater, and increased transparency.
Hydraulic fracturing, commonly known as “fracking,” releases oil and gas from underground geological formations by injecting high-pressured water, sand and chemicals into those formations to create cracks. While those formations lie much deeper than groundwater aquifers tapped for drinking water and irrigation — some 8,000 feet of solid rock separates oil and natural gas from the water table, says COGA’s Haley — drilling fluid, water, and oil and gas move to and from the surface, passing through layers where drinking water contamination could occur.
In hydraulic fracturing, a mixture of water, sand and chemicals is injected into an oil-rich geologic formation.
If water is naturally present in the formation, it will flow out along with any hydrocarbons. Water that emerges
is contaminated, so operators typically dispose of it by injecting it deep underground, completely removing it
from the hydrologic cycle. But increasingly, thanks in part to state legislation and initiatives, oil and gas companies
are treating produced water and reusing it.
Graphic: Vectormine/iStock
“From a water quality standpoint, I think we’re still leading the nation in how we look at water quality, and how we look at oil and gas activities associated with proximity to water,” Messner says.
In 2012, Colorado became one of the first states to require companies to disclose the chemicals used for hydraulic fracturing.
“That was one of the easier rulemakings just because everyone agreed that there were certain things that could be done and should be done to alleviate those concerns about different chemicals associated with hydraulic fracturing or contaminating water,” Messner says.
For those disclosures, Colorado joined a nationwide database, FracFocus.org, now used by 27 of 34 oil-producing states. In 2022, lawmakers revised disclosure rules to prevent companies from deeming some frac fluids trade secrets and declining to publish their ingredients, clarifying that only the mixture, not its components, can be proprietary. That move was heralded as a first in the nation achievement
for transparency. But public databases haven’t yet been updated with those missing chemicals.
Colorado’s program for groundwater testing before and after drilling was also a first of its kind, according to ECMC. Other oil and gas producing states also now require similar baseline water sampling. Oil and gas operators in Colorado began collecting water samples even before it was required, and the state rules, also finalized in 2012, closely followed what the industry proposed. Still, regulations have extended the time required to secure drilling permits to the longest in the nation, says Grant Tupper, who works with oil and gas organizations on industrial water use as director of operations and business development in the Rocky Mountain region for Select Water Solutions. A new well permit in Texas might take two weeks, he says, but in Colorado, it can take 18 months. COGA has estimated new regulations add at least $590 million annually to the costs of doing business in Colorado.
“The state itself is ahead of the curve in some of the regulatory models they’re setting up and what they’re doing, and the companies are coming along,” Tupper says. “I think some of it is unnecessarily burdensome, but there’s that balance you have to strike.”
Colorado is the only state to require operators to test for and publicly share the chemical composition of leaked fluid found in the pipes around an oil and gas well. That disclosure allowed for researchers with the University of Colorado, National Energy Technology Laboratory, Johns Hopkins University, and Dalhousie University to answer a long-debated question: When nearby household water wells are contaminated by gas, did the gas naturally drift through the ground, or was it leaked from a well? Their research, published in 2023, used the geochemical composition of leaks around northern Colorado’s Wattenberg Field to link the gas to failed well pipes or casings, not natural distribution.
The fraction of contaminated residential water wells — about 4.5% of those sampled — is small enough it hasn’t prompted major changes, says Joe Ryan, an environmental engineering professor at the University of Colorado, who worked on that research. But it did spur the state to re-examine some older wells’ casings. “One thing to be careful about is, groundwater moves slowly, and contamination that we’re actually seeing show up at somebody’s water well could be contamination that happened a decade or two or three ago,” Ryan says. His latest research aims to pinpoint which oil well is the source of a concern if it does arise.
Among environmental NGOs — and their communities — there’s still frustration with how long it took to make those gains, how much pollution continues, and skepticism around whether what looks good on paper is being practiced in the oil field. Particularly given that oil and gas operators self-report water use, spills, and failed equipment, says Andrew Forkes-Gudmundson, senior manager for state policy with Earthworks, “It takes a lot of trust, and leaves a lot of uncertainty.”
Tupper frames it as an education gap that leaves people suspicious of what happens on well pads. “Hydraulic fracturing has been around since the 1950s,” he says. “It’s not new technology and it’s not top secret.”
An aerial view of a fracking drill rig on the side of a mountain in Colorado. Photo by Grandriver/iStock
Tracking Impacts
The “mission change” legislation also mandated that the ECMC issue a “cumulative impacts” report annually. The 2023 report says the agency’s more stringent approaches are showing results. New oil and gas wells are farther from waterways and wetlands, among other measures intended to protect surface water. But this doesn’t speak to the 40,000-plus existing oil and gas wells in Colorado. And while the legislation required assessing cumulative impacts from the oil and gas industry, regulatory rulemakings have yet to determine if and how Colorado will have to address or reduce impacts to water.
The state has also increased financial bonds to cover the costs of cleaning up oil and gas wells abandoned by defunct or bankrupt companies. Those wells can become lingering sources of water contamination, as well as greenhouse gas emissions.
It’s progress, says Barbara Vasquez, who has watchdogged the industry since 2006, when well drilling picked up near her home in Jackson County. “But we can still do better,”she says. Vasquez also sits on the Colorado Water Conservation Board where she represents the North Platte River Basin.
Enforcement and routine visits remain a challenge, with many oil fields an hours-long drive away from the federal or state offices where inspectors are based. The last year has seen fewer spills reported — which looks like “moderate progress,” says Kate Groetzinger, communications manager for the Center for Western Priorities, who compiles the nonprofit’s annual report on spills. But with more than 750,000 gallons of contaminated water and oil spilled through 414 spills across Colorado in 2023, “it’s still too much,” she says.
Barbara Vasquez, an industry watchdog and member of the Colorado Water Conservation Board, sits on the Colorado Produced Water Consortium. Photo by Barbara Vasquez
Reusing Produced Water
Oil and gas operations have used water to lubricate and cool drill bits for decades. But since the advent of hydraulic fracturing, most of the water used is injected to open up formations, allowing oil and gas to be pumped to the surface. If water is naturally present in the formation, it also comes to the surface with the mix of injected water and hydrocarbons.
While statewide estimated water use per oil and gas well decreased between 2022 and 2023, over the longer-term, water use has risen. Colorado operators doubled their use of water to prepare wells for fracking between 2013 and 2023, according to a 2023 report from the nonprofit Fracktracker Alliance. And completing a single oil and gas well can still require an average of 5 acre-feet to 33 acre-feet of water or more, according to the U.S. Geological Survey. That’s enough water to meet the annual needs of some 10-100 households. Surface and groundwater provided 89% of the water used at oil and gas wells in Colorado in 2023 — a total of about 10.5 billion gallons, or 32,200 acre-feet.
Roughly 1% of Colorado’s total annual water diversions goes to oil and gas, but most of the water used to develop a well, combined with any additional water emerging from the geologic formation with oil or gas, is so contaminated that the industry typically disposes of it by injecting it deep underground, completely removing it from the water cycle.
“That water is taken out of the hydrological cycle because most operators dispose of it by injection,” Vasquez says. “So when you compound that over time, it becomes anything but de minimis.”
With that in mind, in 2023, Colorado’s legislature set up a new Colorado Produced Water Consortium through House Bill 1242. The bill requires the ECMC to adopt rules by December 2024 for reducing freshwater use and increasing use of recycled water.
Some companies have already made headway. Occidental Petroleum is operating a facility in Colorado’s Denver-Julesberg (DJ) Basin that processed a record-setting 889,076 barrels of liquid and slurry waste for reuse in 2022. That recycled waste offset the need for 696,480 barrels of freshwater for well completions. In other states with basins that yield more water, Occidental has been able to stop withdrawing from freshwater sources. Chevron is also working toward a zero-freshwater goal for well completions. But recycled water supplied just 11% of the water used at Colorado’s oil and gas wells last year.
“All of the customers in the oil and gas space are making a concerted effort to reduce freshwater use, and a good step toward that is being able to reuse the water that we do get back,” Tupper says. But geology constrains these efforts, with the formations in the DJ yielding far less produced water than other basins, Tupper says. “It’s far more expensive to do this in the DJ than it is most places, and it’s far more expensive than freshwater.”
Regulations also disallow large storage pits, which makes it hard to pool enough recycled water to frack a new well. As a workaround, companies could share water among their operations, but there’s no legal system yet for being cleared of liability during transit of that water in the event of an accident.
The Colorado Produced Water Consortium, an advisory body of 31 stakeholders from state agencies, oil and gas companies, environmental organizations, and affected communities has been meeting since September 2023 to identify and suggest solutions for these limitations. Through 2030, this group must submit annual reports to state lawmakers, through which they’ll identify existing infrastructure for storing and treating produced water, the estimated volume of produced water across the state, and the changes needed in rules and laws to boost the recycling and reuse of produced water in Colorado.
Initial reports on their findings were published in March, May and July.
Technology exists to treat reusable water, but questions remain on what to do with byproducts, which can include toxic hydrocarbons, salt, heavy metals, naturally occurring radioactive materials, and chemicals used to drill or maintain wells, and how to incentivize the practice, which is more expensive than purchasing municipal drinking water. The consortium will also look at the feasibility, both technically and financially, of using that water outside the oil field.
“Right now, there’s many opportunities,” says Hope Dalton, the consortium’s director. “As we have more data and information, that can tell if all of those opportunities will be fruitful or not.”
Nikie Wells, environmental justice director for Black and Brown Parents United Foundation, was appointed to the consortium to represent disproportionately impacted communities. Her family suffered from poor water quality in Texas before moving to Colorado, which is why she took this opportunity to help the state make smart choices.
“You don’t think about where [water] comes from, and how we’re using it, and how we should preserve it or any of that until you’re sitting in that seat and you have to make decisions for all of Colorado, and not just yourself,” Wells says. “And then you think about it like, what’s working, and what’s not working, and making sure that what’s working doesn’t get broken in the process.”
Independent journalist Elizabeth Miller has written about environmental issues around the American West for publications including The Washington Post, Scientific American, Outside, Backpacker and The Drake.
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