Proposed Colo. project could help power new wells with cleaner electricity, says BLM

The Bureau of Land Management is studying a proposal by Xcel Energy Inc. to build an 18-mile high-tower transmission line to handle the anticipated drilling of tens of thousands of new natural gas wells over the next two decades in northwest Colorado's Piceance Basin.

BLM has estimated that as many as 21,000 new natural gas rigs could be drilled over the next 20 years in Rio Blanco County and parts of Moffat and Garfield counties. "We anticipate steady development in this area over the next several decades," said David Boyd, a BLM spokesman in Silt, Colo.

To handle that anticipated demand and to ensure a steady supply of power for residents and businesses nearby, Xcel Energy wants to build the new line from an existing substation in Rifle, Colo., about 18 miles southwest to a substation in Parachute, Colo. About 6 miles of route is expected to cross BLM property, and 150-foot-wide right-of-way easements will need to be purchased from private landowners.

BLM plans to conduct an environmental assessment (EA) and is accepting public scoping comments outlining possible problems and concerns through Nov. 30. A draft EA should be released by next spring, Boyd said.

The company anticipates that the $27 million, 230-kilovolt power line project will be completed and in operation by 2016, according to Xcel Energy's preliminary plan of development released this month. Xcel Energy anticipates that by that time, electricity demand will have increased in the area by as much as 50 megawatts, or the equivalent of the electricity needed to power about 17,000 homes.

"The transmission system, as it exists today, does not have the capability to accommodate the additional oil and gas production/exploration anticipated for the future," according to Xcel Energy's preliminary plan. "Additional transmission facilities are required to deliver the electricity to the load centers where energy needs are the greatest."

But another reason for the line, according to Xcel Energy's plan, is to give energy developers the option to run compressors, pumps and other equipment at the drill sites on electricity, instead of natural gas and diesel that increase emissions of air pollutants.

In describing the need for the power line in the preliminary plan of development, Xcel Energy states that "Strict environmental regulations and competitive pricing of electricity" make the power line a good alternative for the oil and gas industry. In addition, using electricity to run compressors "lowers emissions," which in turn results in "decreased environmental impact."

The northern Piceance Basin has been targeted for development thanks to advances in directional drilling and other techniques that will allow developers to access natural gas reserves trapped in the tight sand formations in the basin. BLM estimates that over the next 20 years, oil and gas activities in this area of the Piceance Basin could produce 878 billion cubic feet of natural gas annually and create as many as 8,000 new jobs in northwestern Colorado alone (EnergyWire, Aug. 23).

The power line project -- which will be owned and operated by Xcel Energy subsidiary Public Service Company of Colorado -- is part of a growing effort by BLM to improve access for oil and natural gas drillers to electricity to power compressors, pumps and other equipment at tens of thousands of well sites across the West.

Example: BLM in September approved a plan that could ultimately allow Rocky Mountain Power to string nearly 30 miles of new electricity transmission lines along the spine of the remote Pinedale Anticline oil field. The line would be used to run thousands of oil and natural gas compressors in an effort that regulators and industry leaders say could significantly reduce air pollution across southwest Wyoming (EnergyWire, Sept. 6).

"It could be a win-win for everybody," said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association in Grand Junction, Colo.

Indeed, Ludlam called the proposed Xcel Energy power line "a critical project for the industry," as it develops natural gas trapped 9,000 feet below the surface in tight-sand formations.

But Ludlam also cautioned that while electrification of oil and gas drilling operations is a laudable goal, many of the oil and gas resources are located in rural areas far away from power lines.

"The members of our organization have been consistent that there is a time and place for electrification, and we're supportive of this project," he said. "The cautionary tale we also want to make sure to communicate is that when they have used electricity for compression, people tend to jump to the conclusion that it can be done everywhere. We want to be careful and caution that electrification is not always possible. It depends on where you are."