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GILLETTE — The Powder River Basin would be producing 20 percent more gas if some 3,000 coal-bed methane wells were pumping instead of awaiting approval to discharge groundwater, according to the Wyoming Oil and Gas Conservation Commission.

"This development of coal-bed methane gas is very tightly regulated," commission supervisor Don Likwartz told the Coal-Bed Natural Gas Water Use Task Force on Thursday. "It's an important revenue source to the state, but it's got to be done right."

Coal-bed methane wells pump groundwater to the surface along with methane. What to do with the water has been a complex environmental and regulatory issue.

The fact that many wells are awaiting discharge approval isn't new to state officials. The William D. Ruckelshaus Institute at the University of Wyoming spent a year looking at the issue and told the governor's office in December that the state's lack of a regulatory framework for coal-bed methane development threatened the industry's future growth.

The industry is meanwhile under increasing pressure from Montana, which is expected to impose stringent water quality standards that would prevent Wyoming coal-bed methane producers from discharging the byproduct water into Montana-bound streams.

Likwartz said that could reduce gas production until the industry and the state come up with a strategy to manage increased volumes of produced water.

"There are 80 different coal-bed methane gas operators in the Powder River Basin," Likwartz said. "Trying to get all the operators to work together often is difficult."

Tom Doll, an operations manager for Williams Production RMT, said his company has wells that are drilled but are still awaiting production. Getting approval for a water management plan takes time, he said, because companies must balance their options with their checkbooks. "You've got to make some capital decisions on how you're going to manage the water," he said.

The Legislature this year formed the Coal-Bed Natural Gas Water Use Task Force to comb through water management recommendations from the Ruckelshaus study and dozens of others.

Currently the industry has many options for managing the water, including using it for irrigation and stock watering. However, the volume of coal-bed methane water being produced in the basin far exceeds those practical uses.

Industry and state officials are considering proposals for water not put to specific uses, such as piping it to the North Platte River or to Campbell County coal mines for dust suppression. Another option is to pump the water back underground.

"People need to understand that this task force wants to hear from the public," said Rep. Pat Childers, R-Cody. "We want to get some ideas on how to improve the situation."

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