04-05-05

The state is studying whether to allow gas drilling near the site of a 1969 underground nuclear explosion.

The Colorado Oil and Gas Conservation Commission will decide at a meeting whether it needs to clarify a ban on drilling inside a half-mile buffer zone around the Project Rulison site. An application by Presco to drill inside the buffer raised questions about the ban issued by the commission last year.

One question is whether the company, using a technique called directional drilling, could start the well inside the buffer and end outside the zone. The well, using a bit that can angle around, would then draw the gas from outside the prohibited area.

Tricia Beaver, the commission’s hearings manager, said the order appears to apply only to the bottom of the hole. Staffers agreed, however, that the commission, which oversees oil and gas development, should decide whether to clarify the order.

“There are a lot of parameters to look at before the commission makes a decision,” Beaver said.

If the commission amends the ban, Presco would still have to apply for permits for each well it wants to drill. Project Rulison, near Rifle in central Garfield County, was designed to free natural gas from oil shale by detonating an underground nuclear explosion. The gas was too radioactive to be sold commercially.

Last April, the Garfield County commissioners endorsed clarifying the state order. The county has also hired several experts, including a nuclear physicist, to study the site’s geology and water system to assess the risk of a well tapping radioactive water or gas.

Doug Dennison, the county’s oil and gas liaison, said the consultants will outline conditions that should be part of any drilling permit.

“This is certainly not a case of the country rolling over. We’re trying to get the best outcome that we can,” Dennison said. “There’s a lot of negotiating going on to get to some middle ground.” The state commission issues drilling permits, but counties have up to 30 days to review applications and can make suggestions.

Garfield County is a hotbed of development in a region rich in gas deposits. Colorado is on pace for a second straight record-setting year for the number of oil and gas permits issued, thanks to soaring gas prices and the Bush administration’s push for more domestic energy production.

The oil and gas commission expects to issue at least 3,400 permits, or 17 % above the 2,917 approved last year.

Source: Reno Gazette Journal