The civil penalty is part of a settlement Union Pacific reached with the EPA for allegedly violating the Clean Water Act and the Oil Pollution Act. In 2003 and 2004, the EPA claims the company spilled oil and coal along railroad lines in all three states and committed other violations at 20 of its rail yards.

“Today we have secured a settlement that will help prevent spills, protect water quality, and improve the safety of Union Pacific’s operations in 20 communities across Colorado, Utah, and Wyoming,” said Jim Martin, EPA regional administrator. “Union Pacific has already begun putting necessary measures in place and we will ensure they continue to do so.”

A Union Pacific Railroad locomotive.

Union Pacific will deposit $1.4 million into the Oil Spill Liability Trust Fund, which is used by federal agencies to respond to oil spills. The remaining $100,000 will be paid to the U.S. Treasury for the coal spills and stormwater violations.

The settlement also requires Union Pacific to develop a management and reporting system to ensure compliance with the EPA’s Spill Prevention, Control, and Countermeasure rules, Facility Response Plan regulations, and storm water requirements in all three states.

“Union Pacific must take further actions to control stormwater runoff at the Burnham Rail Yard in Denver, which are anticipated to prevent the discharge of approximately 2,500 pounds of chemical oxygen demand, 50 pounds of nitrate, 11,000 pounds of total suspended solids, and 30 pounds of zinc annually to waters in the Denver area,” an EPA press release said. “This settlement will benefit many communities in Colorado, Utah, and Wyoming, many of which are disadvantaged, by requiring Union Pacific to install secondary containment to safely store oil and prevent oil spills from leaving its properties.”

Union Pacific will also be required to designate an environmental vice president responsible for complying with oil spill prevention and stormwater control requirements at its 20 rail yards.

The Colorado rail yards in question are located at Burnham, 36th Street in Denver, Denver North, East Portal Moffatt Tunnel, Grand Junction, Kremmling, Pueblo and Rifle.

“Union Pacific is working to ensure our response plans are up-to-date across our entire network and that our derailment response is as swift as possible while at the same time conforming to all applicable environmental laws,” Union Pacific spokesman Mark Davis said. “We are committed to protecting the environment now and for future generations. Our employees, customers, shareholders and the communities we serve can expect our full compliance with all laws and regulations.”

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Extracting fuel from oil shale can require anywhere between three and five barrels of water for every barrel of oil — one of the many reasons why it is more costly than producing conventional crude oil. Experts say commercial oil shale production is potentially a decade away, if it ever happens at all. Yet H.R. 3408, the “Pioneers Act,” would revive a 2008 plan by the Bureau of Land Management to open about 2 million acres of public lands in Utah, Wyoming and western Colorado to oil shale drilling.

“We already face a water shortage in the West that threatens farmers and ranchers,” said Bill Midcap of the Rocky Mountain Farmers Union. “We simply cannot gamble away our water on oil shale speculation at the risk of losing our farming and ranching economy that we depend upon for our food and fiber. A farm economy that is crucial for our State and that is helping our State out of the recession. We should use existing research and development projects to determine how much water will be needed before we consider commercial leasing of oil shale.”

Conservation groups challenged the plan on grounds that the analysis of impacts and the process were flawed and a new proposal re-evaluating the plan is due out soon. Lamborn’s bill (pdf) would mandate commercial leasing on 125,000 acres of public lands by 2016 even though the technology isn’t in place.

“Lamborn’s approach to oil shale is ‘Ready or not here it comes,’ and we are not ready,’’ the National Wildlife Federation’s Kate Zimmerman said. “There are still very important questions to be answered about the impacts of extracting oil shale on Colorado communities, on water quantity and quality and on fish and wildlife. Let’s wait for the results of the existing research into oil shale technology that is already taking place on public lands in Colorado and Utah before we give away more public resources.”

Oil shale was behind the huge western Colorado bust of the 1980s, when Exxon shut down a massive project that threw communities and families into economic and social turmoil. Nonetheless House Speaker John Boehner recently pointed to new oil shale legislation as a way to pay for transportation projects in the next five years — a check that may be hard to cash.

“Republicans on the House Natural Resources Committee botched Rep. Lamborn’s oil shale legislation hearing, which showed just how ridiculous the bill is,” said Matt Garrington, co-director of the Checks and Balances Project. “In two hours, the committee majority voted down guaranteeing oil shale technology to be American-made, ensuring that oil shale extraction won’t harm water supplies for municipalities and agriculture, and requiring commercial oil shale to be a proven revenue generator before handing over 2 million acres of public land for speculation. House Republicans did manage to preserve taxpayer handouts for oil companies by giving away oil shale at bargain-basement rates, undermining Speaker Boehner’s goal of raising transportation funds.”

The Lamborn bill would set royalty rates for oil shale starting at 5 percent for five years – compared to about 12.5 percent for extracted offshore oil and gas – and gradually raise the rate over several years. If they were ever paid, Garrington added, the lower royalties would mean less revenue for local governments, which would then shoulder the burden of costs associated with energy development such as new schools, hospitals, emergency services, roads, and other utilities.

The Pioneers Act is one of three bills concerning domestic energy that the committee approved. The GOP also voted to jump start offshore oil production and open up the Arctic National Wildlife Refuge to drilling. Republicans plan to attach the bills to a $260 billion transportation package.

“Instead of legislating seriously,” said David Goldston, director of government affairs for the Natural Resources Defense Council, what the Republicans have done is put out “an inventory of all the worst ideas they’ve had for the last two decades.”

Lamborn’s bill still must pass the House and if it does, like the other measures the House Committee on Natural Resources passed Wednesday, it will face opposition in the Democrat-controlled Senate.

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Colorado oil and gas regulators say holding ponds like this one in Pennsylvania cause much more groundwater contamination than hydraulic fracturing (www.industrialscars.com photo).

WRA now wants the Colorado Oil and Gas Conservation Commission (COGCC) to implement recommendations (pdf) made in October by a group called the State Review of Oil & Natural Gas Environmental Regulations (STRONGER) suggesting minimum surface casing depths for oil and gas wells that are fracked.

It’s been suggested that the failure to properly case and cement natural gas wells to depths below the groundwater aquifer may have been to blame in Pavillion, Wyo., where a report last week by the U.S. Environmental Protection Agency (EPA) linked fracking chemicals to well-water contamination.

“[STRONGER] recommends that the COGCC work with stakeholders to review how available information is used to determine minimum surface casing depths and how those depths assure that casing and cementing procedures are adequate to protect fresh groundwater,” the October STRONGER report reads.

COGCC director David Neslin said on Tuesday that fracking chemical “disclosure is not our first line of environmental defense. It’s important for transparency, it’s important to build public confidence, but our first line of environmental defense is the integrity of the wellbore. It’s the work that our engineers and environmental staff do in reviewing the permit applications.”

Neslin has long said that disclosure won’t stop spills caused by bad cement jobs of wellbores, pipeline problems or leaks from holding ponds that store fracking and other fluids. On Tuesday he said another line of environmental defense is “groundwater sampling, baseline sampling that we require our operators to do, and the prompt response that our field inspectors make when complaints or allegations of impact arise.”

WRA, however, would like to see another rulemaking on both the STRONGER recommendations and “a mandatory program for baseline testing, monitoring and tracers to protect our water quality.”

“Baseline testing can help eliminate the he said, she said arguments over contamination so that we can focus on keeping people safe,” WRA’s Chiropolos said. “One sick person is one too many. The [COGCC] should continue to be proactive in 2012 in order to protect Colorado families and our water.”

There are approximately 45,000 active oil and gas wells in Colorado, which is in the top five nationally for natural gas production and top 10 for oil. Huge reserves in the Niobrara Shale formation on the state’s populous Front Range have sparked a wave of drilling speculation and local fears about the impacts of fracking.

“Colorado citizens are justifiably worried about the practice of fracking and deserve full confidence that the state is protecting the quality of their air, water and soil,” said Josh Joswick, energy issues organizer of the San Juan Citizens Alliance. Joswick was a La Plata County commissioner when local drilling rules were implemented in that gas-rich area of the state.

Increased drilling activity on the Front Range from Colorado Springs all the way north of Denver to the Wyoming state line will occur where far more Coloradans live than on the sparsely populated Western Slope.

“This [disclosure] compromise means there is no free pass for drilling firms,” state Rep. Deb Gardner, D-Longmont, said in a release. “There is now a greater degree of checks and balances.”

Calls for more COGCC rulemaking on issues ranging from surface casing depth to increased baseline water-quality testing to greater setbacks for oil and gas rigs from homes and public buildings will likely increase along with the drilling.

The WRA Tuesday also called for “increased residential setbacks from the current minimum levels — 150 feet for rural areas; 350 feet for urban areas.” That’s an issue that some observers say was never properly resolved during the last significant revision of the state’s oil and gas drilling regulations.

Those revisions in 2007 and 2008 were so sweeping – including some of the first rules in the nation dealing with fracking – that they required the approval of the State Legislature after months of sometimes bitter debate.

Colorado’s senior member of Congress, Democrat Diana DeGette of Denver, has been trying for years to compel the public disclosure of fracking chemicals at the national level. Her Fracturing Responsibility and Chemical Awareness (FRAC) Act would remove a Safe Drinking Water Act exemption for the fracking process that was granted during the Bush administration in 2005.

She praised the new Colorado rule Tuesday, but also pointed to the Pavillion case.

“The fact that we have a proven case of a connection between hydraulic fracturing and the contamination of an aquifer underscores just how important it is that we take cautionary steps to protect our communities’ water supply,” DeGette said. “That is why I continue to encourage members of Congress to pass my FRAC Act, so communities across the country will have transparency in the drilling process as well.”

EnCana, the Canadian company drilling in the Pavillion area, has disputed the EPA’s findings, and Republican lawmakers and industry trade groups have questioned the agency’s methods and motivations.

Colorado oil and gas regulators say holding ponds like this one in Pennsylvania cause much more groundwater contamination than hydraulic fracturing (www.industrialscars.com photo).

Getting it right also means pre-disclosure of chemicals before fracking (which is required in Wyoming and Montana), full disclosure of any toxic chemicals (no trade secret exemptions) and full public access (requiring immediate website access so the public can sort by type of chemical, date and location of a frack job). In its draft rule, the Colorado Oil and Gas Conservation Commission (COGCC) may not require full sorting on www.fracfocus.org until 2013.

Most of all, says former oil and gas commissioner Trési Houpt, the COGCC should not adopt an inadequate rule on Tuesday in hopes that it can later revisit and correct deficiencies.

“Once a rulemaking has come to a conclusion, it will be years before they look at it again,” Houpt said Thursday. “So what I would encourage for the oil and gas commission, if they can’t find the right solutions on Monday, would be for them to continue the hearing but not come to a conclusion on this particular rule until they’re completely comfortable with it.”

Houpt was both a Garfield County commissioner (one of the most drilled counties in the state) and an oil and gas commissioner during the lengthy revision of the state’s drilling regulations in 2007 and 2008. Several critical issues were left unresolved then and have never been revisited since, said Houpt, whose Glenwood Springs-based Sustainable Solutions is a paid consultant on this issue for the Western Colorado Congress environmental group.

“It absolutely does not work to postpone putting together a rule that addresses all of the needs,” Houpt said. “We found that when the staff asked us to postpone the rulemaking on setbacks from homes, reclamation and riparian areas, with the notion that they would be addressed in three to four months, they never were addressed. It’s been years and those issues have never been addressed by the oil and gas commission.”

As for the Pavillion case, it falls just short of definitively concluding fracking contaminated groundwater. But the EPA’s ongoing investigation seems headed toward that finding, which will undermine a longstanding industry argument that the process occurs so far below the surface that it does not communicate with groundwater and drinking water supplies. EnCana, the Canadian company drilling in the Pavillion area, as well as numerous locations in Colorado, once again denied any responsibility.

Trési Houpt

The timing of the latest EPA report, which came out Thursday after Republicans had already started attacking the agency’s long-running probe of the Pavillion situation, makes it a hot topic ahead of Monday’s COGCC decision.

“Industry likes to say contamination from fracking is inconceivable,” Colorado Environmental Coalition energy organizer Charlie Montgomery said. “The EPA’s finding tells a different story, that contamination is a very real possibility and that communities today might be dealing with the fallout right now.

“While the announcement isn’t full confirmation of a missing link, the announcement suggests this is the time for maximum care and caution in how Colorado regulates fracking in our state.”

However, the Petroleum Association of Wyoming issued a statement blasting the EPA (pdf):

“The draft report coming out of the EPA [Thursday] is reckless,” said Bruce Hinchey, president of the Petroleum Association of Wyoming. “Let me be clear, the EPA’s findings indicate that there is no connection between oil and natural gas operations and impacts to domestic water wells.

“Unsubstantiated statements coming from the EPA [Thursday] stretch the data and cause unwarranted alarm and concern about a proven technology that allows our industry to safely extract oil and natural gas. The EPA’s announcement is irresponsible and leads us to call into question its motives.”

The EPA pointed out that the geology in the Pavillion area is unique and findings there might not be valid in other parts of the country where fracking is a concern. The agency published its preliminary report to garner public comment and seek independent scientific review.

Pavillion operator EnCana has been fined by the COGCC for past spills in Colorado, including in the West Divide Creek area of Garfield County, but state regulators said fracking was not to blame in that notorious case.

The COGCC on Monday listened to 11 hours of testimony on its draft fracking chemical disclosure rule. The commission convenes again on the issue at 8 a.m., Tuesday, at the Chancery Building (Suite 801), 1120 Lincoln Street, in Denver. There will be no additional public comment or evidence introduced.

Editor’s note: This post has been revised to reflect a Friday afternoon decision to switch the meeting from 8 a.m., Monday, to 8 a.m. Tuesday, in the COGCC hearing room in the Chancery Building. The parties needed more time to “attempt to resolve the remaining rulemaking issues.”

Louis Meeks’ well water near Pavillion, Wyo., contains methane gas, hydrocarbons, lead and copper (Abrahm Lustgarten/ProPublica).

“EPA’s highest priority remains ensuring that Pavillion residents have access to safe drinking water,” Jim Martin, EPA’s regional administrator in Denver said in a press release. Martin is the former head of the Colorado Department of Natural Resources. “We will continue to work cooperatively with the State, Tribes, Encana and the community to secure long-term drinking water solutions.

“We look forward to having these findings in the draft report informed by a transparent and public review process. In consultation with the Tribes, EPA will also work with the State on additional investigation of the Pavillion field.”

Pavillion is within the Wind River Indian Reservation. Residents there have been warned not to drink the local well water, and the Canadian oil and gas company EnCana has been supplying clean drinking water. However, the company disputes that fracking has led to well water contamination.

At the request of area residents, the EPA has been testing two deep water monitoring wells.

“EPA’s analysis of samples taken from the agency’s deep monitoring wells in the aquifer indicates detection of synthetic chemicals, like glycols and alcohols consistent with gas production and hydraulic fracturing fluids, benzene concentrations well above Safe Drinking Water Act standards and high methane levels,” the report states.

“Given the area’s complex geology and the proximity of drinking water wells to ground water contamination, EPA is concerned about the movement of contaminants within the aquifer and the safety of drinking water wells over time.”

The EPA also conducted new sampling of drinking water wells in the area.

“Chemicals detected in the most recent samples are consistent with those identified in earlier EPA samples and include methane, other petroleum hydrocarbons and other chemical compounds,” the EPA reports. “The presence of these compounds is consistent with migration from areas of gas production. Detections in drinking water wells are generally below established health and safety standards.”

Republican politicians have already started attacking the EPA’s ongoing investigation in Pavillion, but the agency is taking great pains to point out that geological conditions are different all around the country and that what’s true in the Pavillion case may not apply to other areas where fracking is suspected of tainting groundwater.

“The draft findings announced today are specific to Pavillion, where the fracturing is taking place in and below the drinking water aquifer and in close proximity to drinking water wells – production conditions different from those in many other areas of the country,” EPA officials said in a release.

Anti-drilling activists in Colorado have also pointed to a 1984 EPA report on fracking in West Virginia as evidence that the process can contaminate drinking water supplies with carcinogenic chemicals. But the Pavillion case represents the most clear-cut contemporary example.

Colorado Gov. John Hickenlooper this summer said with certainty that fracking fluids don’t communicate with groundwater, but he still ordered a new chemical disclosure rule to be drafted. That rulemaking process is still under way.

Sen. James Inhofe, R-Okila.

“This statement appears to contradict statements by you and other members of the federal government about hydraulic fracturing and drinking water contamination,” Inhofe, the ranking Republican on the Senate Environment and Public Works Committee, wrote to Jackson.

In fact, the EPA recently released a report finding a solvent called 2-Butoxyethanol (2-BE) in domestic well water in the Pavillion area, and 2-BE is a common constituent of fracking mixtures. The EPA did not conclude definitively that the 2-BE in local well water came from EnCana fracking operations, but is expected to release a more conclusive report soon.

“Because of these contradictory statements, I am concerned that EPA has pre-determined that hydraulic fracturing is the cause of contamination in their Pavillion investigation and the agency is trying to make the data conform to that conclusion, instead of engaging in an open scientific inquiry,” Inhofe wrote.

The EPA has been investigating the Pavillion case since 2008 and has been engaged in extensive well water sampling in the area since 2009. Area residents have been instructed not to drink their well water because of elevated levels of benzene, and EnCana’s deal to sell its drilling operations in the Pavillion area recently fell through, in part because of the EPA findings.

Colorado citizen activists have pointed to the Pavillion case and EnCana’s well blowout in the West Divide Creek area of western Colorado as compelling evidence in favor of full public disclosure of fracking chemicals during an ongoing Colorado rulemaking on the topic.

Jackson, speaking at a recent event in Denver, stopped short of saying hydraulic fracturing – which involves the high-pressure injection of water, sand and chemicals into wells to free up more oil and gas – can lead to direct groundwater contamination. But she did echo widespread citizen concern.

“Natural gas is key to moving to a ‘Clean Air, Clean Jobs’ agenda, but we want it to be extracted in an environmentally sound way,” Jackson said in Denver, referring to landmark legislation switching coal-fired power plants over to cleaner burning gas. “With fracking, it’s a water issue, too. How we store the water that comes up carrying heavy metals, how the [fracking solutions] shot into the ground may be affecting groundwater.”

An Inhofe spokesman told the AP that the senator “is the leading advocate for hydraulic fracturing in the United States Senate and has had concerns about the Obama administration’s war on natural gas. And so he therefore takes his oversight responsibility seriously, and that’s why he’s been looking closely at the actions of the EPA in Wyoming.”

Besides its Pavillion probe, the EPA is also conducting a more comprehensive study of the impacts of fracking on drinking water, including a retrospective examination of fracking in southern Colorado.

An older EPA study of fracking has been sharply criticized for failing to comprehensively examine all of the potential impacts of the process before it was granted an exemption from the Safe Drinking Water Act in the 2005 Energy Policy Act that was passed during the Bush administration. Colorado Reps. Diana DeGette and Jared Polis have been working to reverse that exemption, dubbed the “Halliburton Loophole” by its many critics.

Inhofe has drawn criticism in recent years for deeming widely accepted climate change science a hoax. During the 2010 U.S. Senate race in Colorado, Republican Ken Buck stirred heated public debate by embracing Inhofe’s beliefs.

A coal mine venting methane gas along the North Fork of the Gunnison (WildEarth Guardians photo).

That ruling overturned the Wyoming judge’s decision and reinstated the 2001 Roadless Rule as the law of the land. It also cast serious doubt on the controversial Colorado Roadless Rule, which was drafted after the Bush administration set aside the Clinton rule and allowed states to petition for their own rules governing the management of designated roadless and undeveloped federal lands.

Monday’s move was not popular with environmental attorneys who argued for the 2001 national rule.

“The [2001] Roadless Rule is a landmark conservation measure that protects clean water, wildlife and the public lands where Americans have enjoyed hiking, horseback riding, hunting and fishing for generations,” said Earthjustice attorney Tim Preso.

“Monday’s rehearing petition … asks for an extraordinary court procedure that is rarely granted. Nothing in the 10th Circuit’s careful and methodical decision upholding the [2001] Roadless Rule justifies the use of that extraordinary procedure in this case.”

In Colorado, there are more than 4.2 million acres of inventoried roadless federal lands, where state officials had hoped to instate a more tailored approach that would allow more road-building exemptions for industries such as coal mining, timber removal, oil and gas drilling and ski-area expansion.

Colorado officials in October said they didn’t view the 10th Circuit Court of Appeals decision as definitive and that they would proceed with seeking federal approval of the Colorado Roadless Rule. Earthjustice attorneys at the time saw that as an unnecessary and misguided approach.

In filing its petition on Monday, the Colorado Mining Association (CMA) was sharply critical of the Clinton rule:

“Roadless lands are the key to establishing and maintaining wilderness,” CMA and Wyoming lawyers wrote in the petition conclusion. “The Roadless Rule was the product of a sham process calculated to create wilderness without Congress. The Panel decision allows the Forest Service to unlawfully circumvent Congress and thwart many of the laws designed to ensure the proper management and conservation of the National Forests. The full Court should correct this result.”

The court must still accept the “en banc” petition and agree to reopen the matter.

“The 10th Circuit’s decision represented a sweeping victory for protection of our roadless national forest lands,” Earthjustice attorney Preso said. “Americans from coast to coast favor protecting our national heritage of pristine public forests. In the extraordinary event this case is reopened, Earthjustice will be there to defend these special lands.”

The CMA clearly signaled (pdf) its displeasure with the ruling in October:

“CMA is disappointed that the decision does not reflect a practical understanding of the impact that the Rule will have upon mining jobs or access to needed minerals here in Colorado and the U. S. It is important to develop high quality coal and other mineral reserves impacted by this regulation here in the United States and in Colorado, both to ensure our nation’s energy security and reduce our dependence on minerals produced in other countries.”

National environmental groups have been pushing the Obama administration to reject the Colorado Roadless Rule and implement the Clinton rule, which they view as far more protective. Colorado conservation groups recently accused the Forest Service of violating the spirit of the Clinton rule by giving a procedural nod to a coal mine expansion on the North Fork of the Gunnison area.

Bracken points out a number of parallels between the contamination of groundwater on and near her property on West Divide Creek in Garfield County, Colo, and the ongoing investigation by the EPA in Wyoming. She plans to either testify in person or provide written comments when the Colorado Oil and Gas Conservation Commission (COGCC) weighs new fracking rules Dec. 5.

The ongoing EPA Pavillion probe recently revealed cancer-causing constituents and a common hydraulic fracturing fluid chemical in an underground aquifer near natural gas wells operated by Calagary-based EnCana.

Igniting methane near West Divide Creek (Lisa Bracken photo).

Bracken says the contamination has continued on her property but that the EPA has deferred to state investigators who concluded the latest seepage on her property is biogenic and naturally occurring – issuing a new round of drilling permits to EnCana in the area.

“This is groundwater impact, this is surface water impact, and we’re drinking from this source — not to mention what’s going on upstream still [with more drilling] — and where’s the EPA?” Bracken told the Colorado Independent this week. “All they said is we’re talking with the state and we’re working with them on their investigation.”

The COGCC, which is the lead oil and gas regulatory agency in the state, ultimately concluded this year that “no oil or gas impact has occurred” after another round of testing in the Divide Creek area beginning in 2008.

The COGCC also rebutted (pdf) Bracken’s appearance in the Oscar-nominated documentary “Gasland,” claiming the film confuses too separate cases of methane contamination:

“One of the seeps occurs in a wetland on property owned by Lisa Bracken, who appears in the film; it contains biogenic methane. The other seep, which the COGCC terms the West Divide Creek gas seep, is about 1,500 feet to the south on property owned by a neighbor; it contains thermogenic methane caused by EnCana’s failure to properly cement a natural gas well.”

But Bracken contends the state and the EPA have done a poor job of getting to the bottom of what’s really going on in the Divide Creek area, citing a lack of pre-drilling baseline water samples and a lack of public disclosure of the chemicals used in the hydraulic fracturing process.

“We’re drawing water out of that same formation,” Bracken said. “We’re drinking it and there’s no disclosure about fracking chemicals from 2004 all the way forward. I’ve asked [EnCana and the state] at least a dozen times; they will not disclose them and we’re forced to drink it not knowing because we don’t have any other option. We just can’t afford another option. And the state won’t make Encana haul [water].”

In Pavillion, residents have been warned not to drink the water, and EnCana, which recently sold its holdings in the area, has been trucking in drinking water. As they have in the Garfield County case, EnCana contends the groundwater contamination is naturally occurring.

Frank Smith, director of organizing for the environmental group Western Colorado Congress, said both Divide Creek and Pavillion provide plenty of lessons for regulators going forward.

“These [EPA] findings could and should be applied to Colorado’s ongoing rulemaking for fracking,” Smith said.

Judy Jordan, former oil and gas liaison for Garfield County, said there’s evidence drilling activities can and do cause elevated levels of methane in groundwater. She cites three phases of study of the hydrogeologic conditions in the Mamm Creek Field Area [including Divide Creek] showing higher levels of methane after the most recent gas boom in Garfield County.

“My best guess … is that the methane that we see in domestic wells [in the Mamm Creek area] probably arrives because at least some of it travels up the wells themselves through the annular space that is not sealed, which should be sealed under regulation,” Jordan said. “But, unfortunately, Colorado’s regulations don’t require that the operators cement that whole length of casing, that annular space.”

A pair of environmental monitoring wells drilled deep into an aquifer in Pavillion, Wyo., contain high levels of cancer-causing compounds and at least one chemical commonly used in hydraulic fracturing, according to new water test results released yesterday by the Environmental Protection Agency.

The findings are consistent with water samples the EPA has collected from at least 42 homes in the area since 2008, when ProPublica began reporting on foul water and health concerns in Pavillion and the agency started investigating reports of contamination there.

Last year – after warning residents not to drink or cook with the water and to ventilate their homes when they showered — the EPA drilled the monitoring wells to get a more precise picture of the extent of the contamination.

The Pavillion area has been drilled extensively for natural gas over the last two decades and is home to hundreds of gas wells. Residents have alleged for nearly a decade that the drilling — and hydraulic fracturing in particular — has caused their water to turn black and smell like gasoline. Some residents say they suffer neurological impairment, loss of smell, and nerve pain they associate with exposure to pollutants.

While the EPA has not claimed certainty that the contamination came from fracking at this point, the presence of 2-Butoxyethanol (2-BE), a chemical used in fracking, and the lack of contamination with nitrates and fertilizers that would indicate an agricultural source, suggest a link.

According to the Casper Star Tribune, Black Hills is making the $237 million move in anticipation of U.S. Environmental Protection Agency (EPA) rules regulating mercury and carbon dioxide (CO2) emissions from coal-fired power plants. About 90 percent of the electricity generated in Wyoming comes from coal, which is abundant and cheap in the Powder River Basin.

But an official for Cheyenne Light, Fuel & Power, which is partnering with Black Hills on the new gas plant, expressed concern about getting federal permits for a new coal-fired power plant. Natural gas burns about 50 percent cleaner than coal, according to the EPA, and CO2 is the main component of greenhouse gases widely believed by most scientists to be causing global warming.

Black Hills Power Vice President for Operations Chuck Loomis told the Star Tribune that, if approved by state regulators, the company will begin construction on the new 132-megawatt gas-powered plant in 2012 and hopefully have it up and running in 2014.

“It was our determination that joining with Cheyenne Light, Fuel, and Power for constructing a combined cycle unit in Cheyenne was our best option,” Loomis told the paper.

Black Hills Energy supplies electricity to about 94,000 customers in southeastern Colorado. It’s the only other publicly traded utility in the state besides the dominant Minnesota-based Xcel Energy, which is shutting down numerous coal-fired power plants along the Front Range and converting some to natural gas and renewable sources.

But with the shift away from coal mandated by Colorado’s Clean Air, Clean Jobs Act, environmental groups are increasingly concerned about the impacts to air and water quality from a surging natural gas industry in the state.

Many citizens’ groups and conservation advocates in Colorado are looking to Gov. John Hickenlooper to strengthen oil and gas drilling regulations in the state.