SPOTTED HORSE - Montana regulators are setting water quality degradation limits that may seriously stunt the lucrative yet largely untapped coal-bed methane gas resource in northeast Wyoming.

Gov. Dave Freudenthal said recently the two states are at loggerheads about how far Wyoming can degrade water quality in the Tongue, Powder and other rivers that flow from Wyoming's coal-bed methane gas fields into southeast Montana.

Wyoming regulators believe they can meet Montana's "numeric standards" at the border, but Montana officials say that would leave no wriggle room for coal-bed methane water discharges on their side of the border.

"There are differences in how fast the development is occurring in Wyoming verses how fast coal-bed methane development is occurring in Montana. So we're talking about things like, does it make sense for Wyoming to use most of the assimilative capacity now and then back off on that when coal-bed methane development starts to take off in Montana," said John Wagner, administrator of the Wyoming Department of Environmental Quality's Water Quality Division.

Montana proposes a 50/50 split of the capacity for additional electrical conductivity and sodium adsorption ratio. Wyoming regulators believe they should be allowed to go beyond 50 percent at least until Montana begins developing its own coal-bed methane gas resources in earnest.

At stake may be the size and scope of coal-bed methane gas development in Wyoming and Montana. With more than 22,000 wells so far in northeast Wyoming, the industry has tapped less than 5 percent of the coal-bed methane gas resource here. And still, the industry has inflated the wallets and assessed valuations of the three counties, making mill levies stretch tax dollars further than ever.

Campbell County's assessed valuation, for example, is nearly $4 billion. That means cities, counties and the state are unlikely to raise taxes anytime soon.

However, several irrigation and conservation groups say the newfound wealth shouldn't come at the expense of those dry-land ranchers on either side of the border who rely on a delicate system of irrigation. By contrast, coal-bed methane gas is barely a blip on the radar screen in Montana, due in part to a series of legal challenges to protect irrigation.

Montana DEQ officials say the numeric standards for electrical conductivity and sodium adsorption ratio are reasonable.

"We're required to maintain and protect the quality of water for beneficial uses, and that includes irrigation for agricultural use," said Bob Bukantis, program manager for water quality standards at Montana DEQ.

Wyoming and Montana officials have been discussing the issue for about five years. So far, there's no concrete agreement between the two states. However, the governors' staffs continue to meet.

Last month, Wyoming Gov. Dave Freudenthal warned that if the two states can't resolve the issue, the Environmental Protection Agency might be tempted to weigh in. Freudenthal said that's an undesirable prospect.

Back on the ranch

For the first time in five years, Bill West is seeing a good crop of grasses greening up the flat lands of his ranch in the Spotted Horse Creek valley.

Traditionally, West uses spreader dykes to irrigate during the only five or so spring flood days that Spotted Horse Creek actually flows, and his dry-land farming operation stems off that brief gush of water. This year was different. West didn't irrigate at all. An unusually amount of rainfall is responsible for this year's lush crop.

In the past five years, Spotted Horse Creek has been altered from an ephemeral stream to one that runs almost year-round. The change came from the onset of coal-bed methane gas development, which pumps water from coal aquifers and discharges it into holding ponds and natural drainages.

It's hard to believe ranchers in the arid Powder River Basin could have too much water. But dry-land ranching is a delicate operation that stems from the narrow trickle of water comes from the sky, not water that comes from the ground.

Adding a big flow of coal-bed methane water to the soils here is like adding salt to your bacon. For instance, West believes a sodium adsorption ratio (SAR) of six or less is safe for irrigation. He measured an SAR of 13 in February, and even the heavy snowfall in April couldn't dilute the SAR back down to six.

"I've tried irrigating with (coal-bed methane water) and it was a disaster," West said. "This year we didn't irrigate with the flood water at all."

Not every rancher has the same experience with coal-bed methane water, however. A wide variety of soils and water quality provide for very mixed results in the Powder River Basin.

Industry consultant Gene George said Wyoming water quality regulators are very careful to set standards to protect downstream uses such as irrigation. He said a general lack of understanding among the public seems to stack the cards against the industry.

"I am pleased the governor is talking to (Montana regulators) because they're imposing a severe limit on the amount of water we can put into the Powder River," George said. "That potentially limits the activity in Wyoming, and that could be detrimental to Wyoming."

News Tracker

LAST WE KNEW: Montana water quality regulators set numeric standards that limit coal-bed methane water discharges in Wyoming. The idea is to maintain water quality in Montana-bound rivers to a degree that allows Montana to add its own coal-bed methane water and still protect Montana irrigators.

THE LATEST: Wyoming officials want to negotiate something beyond Montana's proposed 50/50 split of capacity for water quality degradation.

WHAT'S NEXT: Wyoming and Montana officials plan to continue discussions.

Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dzeffer@trib.com.