Kinder Morgan, the energy giant that supplies about 40 percent of Montezuma County's tax revenue, is moving ahead with plans to expand its compressor plant west of Lewis.
Without the expansion, the company says, carbon dioxide production in the McElmo Dome field will continue declining at 6 percent per year.
From the field's establishment in the early 1980s until about three years ago, Kinder Morgan simply drilled more wells - and horizontal laterals into existing vertical well bores - to offset lower production. Currently, Kinder Morgan has about 85 well bores in the McElmo Dome, with 13 new wells planned for 2013. By 2010, however, these tried-and-true methods were no longer enough. Decreased differential pressure inside well bores meant CO2 wasn't flowing to the surface as easily, according to field supervisor Bob Clayton. Subsequent Kinder Morgan analysis showed the only practical way to stop, and perhaps reverse, the decline was to expand compression facilities at the Yellow Jacket plant. The expansion should lower "abandonment pressure" and boost well draws.
At a county Planning and Zoning Commission meeting last month, Clayton said the Yellow Jacket facility is only processing at 60 percent of capacity. It can handle 486 million cf/s of CO2 each day, but right now is only processing 300 million. Clayton, who sits on the commission board, abstains from votes related to Kinder Morgan.
Planning Director Susan Carver said no citizens objected at a public hearing held April 22, and the Board of County Commissioners unanimously approved the rezoning and high-impact permit needed to move forward. Anticipating the expansion, Kinder Morgan had already bought a vacant 39-acre parcel, from David and Linda Frederick, next to its existing Yellow Jacket plant. The parcel sits near the intersection of County Roads U and 14. The BLM-administered Canyons of the Ancients National Monument lies nearby to the west. Kinder Morgan would eventually like to combine the two plots into one.
The plant expansion itself is small, only about a half acre in size. Kinder Morgan will break ground in June, and the project should take about 18 months from start to finish - six months for excavation and construction, and another 12 to install equipment and connect pipelines. Kinder Morgan hopes the expanded plant will be operational by late 2014 or early 2015. During construction, roads leading to the site will see a heavier daily traffic load of about 25 vehicles.
Environmental studies showed no adverse effects to the area. Ecosphere Environmental Services performed a storm water management plan and fire mitigation plan. Fire danger is low because of gravel around the plant's base and because CO2 is not flammable. Terracon Consultants carried out a geologic reconnaissance test.
Water contaminated during extraction, or "produced water," is collected in storage tanks, sent to Kinder Morgan's Class I disposal wells, and injected underground below aquifers. The expanded plant is not expected to generate any additional waste water.
Kinder Morgan estimates 20 more years worth of production in the McElmo Dome. When it exhausts the field, the company will decommission all wells and equipment and return the land to agriculture or residential uses.
The plant expansion is likely the first in a series of similar moves throughout McElmo Dome over the next decade. Clayton said Kinder Morgan plans to spend $775 million on the upgrades.
The company started with Yellow Jacket because other compressor stations will require heavier-duty construction.
lukeg@cortezjournal.com
Facts and Figures
Kinder Morgan is the third largest energy company in North America, worth some $100 billion. It operates more than 75,000 miles of pipeline and 180 terminals.
In Colorado, Kinder Morgan employed 728 workers and paid $24.4 million in property taxes in 2012. It owns assets in 34 counties.
Headquarters are in Houston.
Acquired El Paso Energy in 2012, for $38 billion.
Kinder Morgan does not own the products it transports. It makes money by charging fees to extract, store and transport those products, like carbon dioxide and natural gas.
Kinder Morgan's wells in Southwest Colorado drill 8,000 feet below the surface. Bottom-hole pressure has dropped from 2,250 pounds in the 1980s to 1,700 today.
Extracted carbon dioxide is sent 500 miles to Texas inside the 30-inch Cortez Pipeline. Once there, it is blasted at high pressure to release hard-to-access natural gas deposits.
The McElmo Dome field, with its 76 wells, has been in operation since the 1980s. In 2008, Kinder Morgan brought the Doe Canyon Field into production as well, 13 miles northeast. It has 10 wells.
