Proposed Colorado drilling regulation could double water-well drilling costs

Colorado landowners who need a water well dug may be paying up to double what it costs now to add one additional inch in the diameter of the hole drilled for the well if a technical regulation under consideration by state water well regulators is passed.

According to Don Pearson, of Pearson Drilling in Pueblo, the proposed change would require drillers to increase the diameter of the holes they drill by one inch — from two to three inches — which he said would substantially increase the cost of the well to the client.

Drilling companies would also have to buy new equipment capable of doing the job. Pearson said that his company would have to spend about $100,000 to buy new drill bits and other equipment to meet the new requirements — a cost that would be passed on to clients.

Moreover, the proposed rule change is unnecessary and state regulators have not shown any need to change it, Pearson said. Regulators want to harmonize Colorado’s regulations with those of other states.

“It's been our approach to increase the annular space to bring it more in compliance with other guidelines that we see nationally,” said Chris Jones, chief of well inspections for the Division of Water Resources. “The increase that we're asking for, staff has approached it based on other guidelines, other standards, other states.”

The distance between the outer circumference of the casing and the ground the hole was drilled through is called the “annular space.” This space must be filled with a cement-like grout to seal the gap and prevent water mixing between different aquifers and to prevent contamination.

The Board of Examiners of the Colorado Division of Water Resources and the State Engineer’s Office held a stakeholders meeting last week to discuss possible changes to water well construction regulations with hole diameter being one of a number of proposed changes.

The meeting is part of a regular five-year regulatory review requirement imposed by a Gov. Jared Polis executive order issued in 2021.

“There's an executive order where we need to, as an administrative agency, review our rules and regulations for their effectiveness, see if there's anything that can be improved with more or less regulation, anything that can be simplified,” Kevin Donegan, chief of the hydrogeology section at the Division of Water Resources, told The Denver Gazette.

At the meeting, other drillers echoed Pearson’s concerns, with one contractor saying that buying a brand-new drilling rig with the necessary equipment can cost as much as $1.75 million. He said that to make back that money drilling 100 wells per year, buying a new rig would increase the cost of a well by $2,000.

The purpose of requiring a larger hole to be drilled, said Donegan, is to increase the distance between the outside of the well casing and the side of the hole — the “annular space” to make it easier to place the grout.

The casing is a pipe made of steel or plastic placed in the hole to keep the sides from collapsing.

Grouting is the process of pouring cement-like grout around the outside of a well casing. The grout seals aquifer layers off from other layers to prevent leakage, contamination or water mixing between two or more underground aquifers.

Grouting is critical to maintaining the purity of underground water.

Current state regulations require a minimum of two inches of annular space around the casing. The proposed draft would increase that to three inches, which Pearson said doubles the amount of grout required. The proposed regulation changes would also increase the distance down the well that grouting is required, which Pearson said could double grouting costs again.

“We acknowledge that when you're changing the annular space, it's going to likely increase the cost for subcontractors,” said Jones. “It may require additional equipment to be purchased. It may require additional time to construct these wells. These are things that we recognize are a result of making a larger enter space.”

Pearson said that the new grouting requirements would prevent him from using PVC plastic pipe, which does not rust and could last a century, as a well casing in some deep wells. The additional weight of the extra grout, along with heat created by the chemical reaction as the grout cures, could collapse a PVC casing. This, he said, means only steel pipe can be used — which costs five times what PVC costs. Steel pipe also has a much shorter lifespan because it rusts, limiting its life to perhaps 30 to 40 years, according to Pearson.

“The concept (is) that this larger annulus is going to help contractors in tricky situations — is going to increase the potential, the chance — that a well can be properly constructed so that you have sufficient annulus to achieve all the things that we really want to do with the grout,” said Jones. “So, what we're attempting to do, or I think we're attempting to do, is raise the standard to where our level of success for the individuals who haven't quite figured out how to do it well or right are more successful in their own capacity.”

Experienced drillers said the cost of this minor change is excessive and unnecessary and that they know how to do their jobs.

The next meeting of the Division of Natural Resources Board of Examiners will be held from 10:00 a.m. to 5:00 p.m. October 1, where the Board will consider a redraft of the regulation addressing the comments from the stakeholder meeting.

If the Board accepts the new draft, a formal rulemaking process will begin with additional hearings before the new rules become effective.

Interested persons can attend the Oct. 1 meeting at 1313 Sherman St., Room 318, in Denver or attend virtually by Google Meet.

More information may be found at the DNR website.