GILLETTE - Coal-bed methane producers may no longer construct "in-channel" water reservoirs under a U.S. Army Corps of Engineers general permit.

U.S. District Judge William Downes signed a decision Friday overturning the general permit, which has allowed producers to proceed with some methane projects without seeking individual permits. The industry constructs hundreds of in-channel reservoirs in northeast Wyoming to control water that is pumped from coal seams in the production of coal-bed methane. And many of those reservoirs come under the authority of the corps.

"Ranching is our lifestyle. And it (in-channel dam construction) was compromising our lifestyle completely. We have personally experienced the impacts," said Campbell County rancher Bernadette Barlow, who had testified in the case.

The Wyoming Outdoor Council brought suit against the corps, arguing there was too little oversight of the construction and that it led to year-round flows on ranches accustomed to dry-creek operations. In some cases, reservoirs flooded and caused chain-reaction problems far downstream from where the actual coal-bed methane production took place.

"By giving this general permit, the Corps of Engineers wasn't considering those in-channel reservoirs that do cause problems," Barlow said.

In his written decision, Downes noted the economic importance of the coal-bed methane industry in Wyoming, but said the industry's use of the general permit runs against federal requirements to protect other land uses.

"This Court will not rubber-stamp an agency determination that fails to consider cumulative impacts, fails to realistically assess impacts to ranchlands, and relies on unsupported, unmonitored mitigation measures," Downes wrote.

Without the general permit, coal-bed methane companies may still construct in-channel reservoirs in waters under the Corps of Engineers' authority, but under a site-by-site permitting basis. The Casper Star-Tribune called the Corps of Engineers' Cheyenne office for comment Friday evening, but the office had closed.

Officials within the oil and gas industry were still weighing the exact implications of the decision.

"Obviously, we're disappointed with the ruling," said John Robitaille of the Petroleum Association of Wyoming. "We felt very strongly that the Corps had done their job and done it properly. And we're disappointed to have a tool removed from our water management toolbox."

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