1. By correspondence dated May 15, 1998, GRI requested authorization from the Alaska Oil and Gas Conservation Commission to pump formation waters produced from the dewatering of coal seams into a deeper sandstone interval with higher salinity formation water without first producing the water to the surface. The production perforations and underlying receiving zone perforations are within the same well.
2. GRI filed the application on an area basis for the Houston Gas Field; however, information supplied within the application is specific only to the Houston No. 3 well.
3. The Commission requested additional information June 11, 1998. GRI provided the requested information on June 12 and 19, 1998.
4. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on May 27, 1998 and in the Frontiersman on May 27, 1998.
5. The Commission did not receive any protest or request for a public hearing.

1. GRI is the operator of the Houston Gas Field. There are no other operators within a one-quarter mile radius of the Houston No. 3 well.
2. Surface owners within a one-quarter mile radius of Houston No. 3 have been duly notified of the proposed operation.
3. The Rosetta No. 3 well is within one-quarter mile of Houston No. 3. Rosetta No. 3 has been plugged and abandoned in accordance with 20 AAC 25.105.
4. Logs from Houston No. 3 may be used to define the disposal and confining zones proposed for subsurface disposal of fluids in the Houston Gas Field.
5. The proposed disposal zone is an unnamed sand in the basal portion of the Tyonek Fm. between the measured depths of 1886 feet and 2030 feet in the Houston No. 3. The lithology consists of fine- to coarse-grained arkosic sandstone grading toward the base to lithic quartz-pebble conglomerate.
6. The production interval is between the measured depths of 1338 feet and 1856 feet in the Houston No. 3.
7. The proposed confining zone consists of Tyonek Fm. claystones between the measured depths of 1856 feet and 1867 feet in Houston No. 3.
8. Industry standard interpretation of cement bond logs obtained by GRI indicates Houston No. 3 is adequately cemented to provide isolation between the intended disposal zone and the base of freshwater aquifers in the area.
9. Houston No. 3 surface casing consists of 505 feet of 7 inch, 23 lb. per foot casing cemented in place. The production casing consists of 2030 feet of 4.5 inch, 10.75 lb. per foot casing cemented to surface. The well is not equipped with tubing.
10. GRI collected water samples during the drilling of the Houston 1, 2 and 3 wells. These water samples and samples taken from adjacent oil and gas wells and coal exploration holes indicate the base of freshwater with salinity greater than 10,000 parts per million is about 800 feet below ground level in this vicinity.
11. The formation water salinity gradient in the Houston Gas Field increases with depth.
12. Water derived from coalbed methane gas production will be gravity separated in the well and the water will be pumped into the basal receiving zone using a subsurface pump.
13. The subsurface pump will be positioned in a packer that will confine injection pressure to the proposed receiving interval.
14. Total water volume to be pumped is estimated at 200,000 barrels. The rate of water production from the coal seams is expected to decline with time.
15. The average rate of the subsurface pump will be about 1130 barrels of water per day and maximum anticipated is 1400 barrels per day. Average bottom hole pressure is expected to be 1250 psi; maximum pump pressure will be 1550 psi.
16. Accepted fracture theory for sandstone buried at shallow depth, similar depth to the interval for disposal operations in Houston No. 3, require pump rates significantly higher than those anticipated with the intended pumping equipment to propagate fractures in the receiving zone. Shallow depth fracture orientation is normally horizontal.
17. Integrity of the system will be monitored based on production rates of gas and water, wellhead pressure and pump operation parameters. Operating wellhead pressure is not expected to exceed 100 psi and shut-in pressure due to a gas column may be as high as 800 psi.

1. There are freshwater aquifers to a depth of 800 feet underlying the Houston Gas Field.
2. Fluids authorized for disposal under this order in the Houston Gas Field will consist of coal seam formation waters generated from coalbed methane production operations.
3. Permeable strata that reasonably can be expected to contain the total volume of disposal fluids anticipated for this project are present in a basal sandstone of the Tyonek Formation in the Houston Gas Field.
4. Disposal pressure and fluids will be isolated within the wellbore to the interval below the pump packer.
5. Confining lithology, cement isolation of the wellbore and operating conditions, will confine movement of disposal fluids within appropriate receiving intervals.
6. Pumping operations are not expected to induce fractures in the receiving formation at the low rate and rated pump pressure.
7. Mechanical system integrity and surveillance data will be monitored continually using gas rate performance, indications of water production at surface with the gas, wellhead pressure and pump performance.
8. Disposal operations will not inject fluids into, through or above a freshwater source.
9. The underground disposal of produced water, without first producing the water to the surface, is an environmentally preferred alternative that reduces the risk of movement of fluids into sources of freshwater.
10. Waiver of the tubing and pressure test requirements of 20 AAC 25.412 will not result in an increased risk of movement of fluids into a freshwater source.
11. The proposed operation conforms to all other regulatory requirements for subsurface disposal of produced formation waters.
12. The proposed disposal injection operations in the Houston Gas Field will not cause waste, jeopardize correlative rights, impair ultimate recovery, or affect overlying freshwater aquifers.

Rule 1 Authorized Injection Strata for Disposal.

Waters derived as a by product of coalbed methane production in the Houston No. 3 well may be injected without first being brought to the surface, in conformance with this order, into a basal Tyonek Formation sandstone unit which occurs between the measured depths of 1886 and 2030 feet in Houston No. 3. This project may be further conditioned by administrative action after review of injection performance.

Rule 2 Demonstration of System Integrity

System integrity will be demonstrated by continual monitoring of gas rate and water rate at surface, wellhead pressure and pump performance characteristics.

Rule 3 Well Integrity Failure

Whenever water rates produced at surface, operating pressure observations or pump operations indicate pressure communication or leakage of any casing or packer, the operator must immediately cease injection and notify the Commission no later than the first working day following the observation, obtain Commission approval of a plan for corrective action and obtain Commission approval to continue disposal.

Rule 4 Surveillance

Surveillance will consist of gas rate observations, water rate or volume produced at surface, wellhead pressure observation and pump performance characteristics.

Rule 5 Administrative Action

Upon request, the Commission may administratively revise and reissue this order upon proper showing that any changes are based on sound engineering practices and will not allow waste fluids to escape from the disposal zone.

DONE at Anchorage, Alaska and dated June 30, 1998
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David W. Johnston, Chairman
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Robert N. Christenson, P.E. Commissioner
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Camillé Oechsli, Commissioner