Moab city, GWSSA to further scrutinize water sales to mineral exploration projects

If energy developers and potash exploration companies are going to use culinary water over the long term, municipal water providers say they may need to adjust their policies – and fees – accordingly.

Culinary water usage at far-flung project sites beyond Moab’s city limits is nothing new. Dead Horse Point State Park, for instance, buys its culinary water from the city’s municipal yard.

Contractors and others have also been filling their water trucks at the city yard for years. But officials have not been tracking where that water ultimately ends up, or what it’s used for, according to Moab Public Works Director Jeff Foster and City Engineer Rebecca Andrus.

That’s about to change, though, after Foster and other officials learned that one of the city’s regular customers has been trucking culinary water to oil and gas wells in the surrounding area.

In the past eight months, Harrison Oil Field Services purchased 2.69 million gallons of water from the city yard, according to Moab City Manager Donna Metzler.

The Moab-based contractor serves Fidelity Exploration & Production, which operates 17 producing oil and gas wells in Grand County, according to Fidelity spokesman Tim Rasmussen.

While Rasmussen said the company’s water usage is miniscule in the general scope of things, Foster noted that Harrison Oil Field Services is one of the city yard’s bigger customers.

“They get more water than most,” Foster said.

In light of the contractor’s water usage, Foster said the city will consider whether regular system users should be paying more than sporadic users do.

“We’re definitely going to be looking at where we want to go from here,” he said.

Right now, Harrison is paying a higher rate of $2.41 for every 1,000 gallons – or almost four times the rate that an average residential customer would pay for the same amount of water.

“They do pay for the water, and they actually pay more than somebody at their house pays,” Andrus said Feb. 4. “We try to compensate the system for that water.”

The city has been “very diligent” when it comes to protecting Moab’s water resources, Andrus said. Still, she agreed that the city should explore the possibility of implementing additional measures, including potential impact fees and user agreements.

“It’s time to take a look at that and make sure that the policies and procedures are in place to protect the resource,” she said.

Andrus said the city is not in any danger of running short on water, as some conservationists have alleged.

“We haven’t had any problems meeting demand,” Andrus said. “The current system is capable of handling everything we have right now.”

In fact, the city typically has a huge surplus of culinary water during the winter months, she said.

“[It’s] a lot more water than anybody could possibly use in several years,” she said. “We’re trying to figure out how we can get that into our water system.”

That’s not to say that the city or the community should feel blasé about the issue of water conservation, though.

“We can’t have the thought that we have unlimited amounts of water,” Andrus said. “We need to plan as if it’s a very limited resource and take care of it in that way.”

Grand Water and Sewer Service Agency (GWSSA) General Manager Mark Sovine said his board of directors also plans to take a closer look at the issue.

“Oil and gas exploration appears to be increasing in southeastern Utah,” Sovine said Feb. 3. “The need for water is going to increase along with that, and we’re all going to have to evaluate that, along with the best use for our water.”

The fact that water is a limited resource in the desert leads local resident Bill Love to question whether any of the city’s supplies should be used for oil, gas or potash exploration and development.

Love is concerned that increasing culinary water usage at various energy projects in the surrounding area will irrevocably damage the underlying Glen Canyon Aquifer.

“I’m just stressing over and over again that this is the tip of the iceberg for using water [at] oil, gas and potash projects,” he said.

Rasmussen, however, disputed the idea that Grand County is on the verge of an oil and gas renaissance.

Fidelity is very pleased with the success of its projects in the area to date, but the company is currently the only oil and gas operator in the entire county, he said.

“I wouldn’t call it a boom,” he said.

Clinton Dworshak, the Utah Division of Oil, Gas and Mining’s compliance and public outreach manager, agreed that energy development in Grand and northern San Juan counties has been very modest to date.

“It’s really just a small number of wells in Grand County,” Dworshak said.

Utah’s oil and gas development has been steady in recent years, but nearly all of the activity has been – and continues to be – centered in Uintah and Duchesne counties, he said.

In 2013, for instance, drillers spudded seven wells in Grand County, compared to 439 in Duchesne County and 517 in Uintah County.

“In Grand County, you’ve got a little bit of activity, but not too much,” Dworshak said.

As for Fidelity’s future plans, Rasmussen said the company expects to drill 12 to 14 wells in Grand County this year.

“We are going to increase our production out there, so our water volumes will increase,” he said.

However, the company will not be using hydraulic fracturing, or fracking techniques, so its water usage will continue to be minimal, he said.

While Fidelity does depend solely on city water supplies to meet its needs, Rasmussen said its royalty payments to the county help support that system.

“We are a consumer, but we provide revenue as well,” he said.

ByBy Rudy Herndon

Staff Writer