MATTHEW BROWN - Associated Press Writer - 04/20/07

BILLINGS -- Federal regulators have warned the Schweitzer administration of possible Clean Water Act violations in a legislative measure to allow the storage of coal-bed methane water in hundreds of small reservoirs used by livestock and wildlife.

The bill would give companies a way to dispose of some of the billions of gallons of poor-quality water produced during coal-bed methane production. Southeast Montana ranchers desperate for water after years of drought would be able to use the reservoirs to water their cattle or to benefit wildlife.

But that water -- pumped from underground aquifers by companies trying to access the methane, or natural gas, found in coal seams -- contains high amounts of sodium and other salts that can kill crops and damage soil if it is used to irrigate land. The water is considered generally acceptable for animals, which have a higher salt tolerance.

Current Montana law restricts the pumping of coal-bed methane water into streams, rivers and the channels that drain into them. Senate Bill 407, sponsored by Keith Bales, R-Otter, would strip some of those restrictions from farm and ranch "impoundments" -- small reservoirs often used as stock ponds.

Because water from impoundments can seep into other water bodies or overflow after heavy rain or snow, officials from the Environmental Protection Agency say the measure could lead to violations of the federal Clean Water Act. The EPA can override Bales' proposal if it does not meet provisions of the act.

"EPA is very reluctant to become involved with the actions of a state's legislature," Kerrigan Clough, the agency's deputy administrator for the Rocky Mountain region, wrote in a recent letter to Gov. Brian Schweitzer. "However, this pending legislation potentially raises concerns about whether important parts of the state's environmental programs would meet federal requirements if the proposed legislation were to become law."

Bales' bill was approved by the Senate in February on a 30-20 vote and was endorsed in the House 59-41 on Thursday. It faces a final vote in the House.

Coal-bed methane development in Montana has been sharply limited in recent years due to court challenges from a conservation group, the Northern Plains Resource Council. That is expected to change once the federal Bureau of Land Management completes a study that recommends allowing more than 18,000 coal-bed methane wells in southeast Montana over the next 20 years.

A single well can produce more than 23,000 gallons of water a day, according to one Montana Department of Environmental Quality study.

Bales said that for some ranchers, such a bountiful water source could alleviate years of drought. That includes Connie Wilson, whose family runs a cattle ranch near Broadus. As water wells on the family's land went dry during the last year, Wilson said she looked to future coal-bed methane drilling as a solution.

"We are out of water and if we did have some of this methane water we could use it," said Wilson, a founding member of the pro-industry group Citizens for Resource Development. Bales pointed out that a similar program has been used for years in neighboring Wyoming.

"This is not about the coal-bed methane companies, this is about ranchers trying to water their cows," Rep. Llew Jones, R-Conrad, said before the House vote Thursday.

But Mark Fix, chairman of the NPRC and a farmer along the Tongue River, downstream from the coal-bed methane industry's initial drilling in Montana, said the risk outweighed any benefits. He said stock ponds easily can overflow or seep into streambeds farmers rely on for irrigation.

"These ponds are going to overflow someday and it's going to get down into the river and harm our irrigated ground. It's just a matter of time," he said.

There are about 4,600 small reservoirs in southeast Montana, according to the DEQ. Up to 10 percent annually would meet the criteria outlined in Bales' bill.

Judy Wong, EPA's regional director for water quality, said her staff is in discussions with the state and has not decided if it would block the program proposed in Bales' bill.

Schweitzer spokeswoman Sarah Elliot said the governor's office is awaiting final action by the Legislature before deciding on a possible veto. But DEQ Director Richard Opper said if the EPA's concerns are not satisfied, "he may be forced to veto it."

Opper said his agency had stayed out of the legislature's deliberations on the bill out of sympathy for ranchers hard hit by years of below-average rainfall.

Associated Press Writer Matt Gouras in Helena contributed to this story.