BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
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IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY SUNDANCE ENERGY INC., WELD COUNTY, COLORADO |
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CAUSE NO. 1V
ORDER NO. 1V-477 DOCKET NO. 1407-OV-52 |
ADMINISTRATIVE ORDER BY CONSENT
(Pursuant to Rule 522.b.(3) of the Rules and Regulations of the
Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)
FINDINGS
1. Sundance Energy Inc. (“Sundance”) (Operator No. 10340) operates the Grant Brothers 23-2-Ae Well (API No. 05-123-37752) (“Well”) located in Weld County.
2. On April 16, 2014 Sundance reported a fire to the Colorado Oil and Gas Conservation Commission (“COGCC” or “Staff”) (Incident Report #673800742).
3. On May 9, 2014 Staff inspected the site (Document #673800742) in response to the fire at the Well (Location ID No. 433692).
4. Staff observed that, (1) flammable liquids were allowed to accumulate in an open top flat work tank; (2) combustible gas monitoring did not occur; (3) the open flat work tank was not grounded; (4) ignition source reported to be static electricity; (5) limited firefighting equipment was available.
5. On May 9, 2014, staff issued a Notice of Alleged Violation (No. 200404234) (“NOAV”) to Sundance. The NOAV cited violations related to the aforementioned fire. The NOAV cited violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 324A.a. (Pollution - General);
b. Rule 606A.h. (Fire Prevention and Protection – Sources of Ignition);
c. Rule 606A.m. (Fire Prevention and Protection –Available Equipment); and
d. Rule 606A.q. (Fire Prevention and Protection-Procedural Familiarity).
6. Following a factual investigation and legal review of the violations alleged in the NOAV, the Staff now asserts Sundance has committed the following violations:
a. A one-day violation of Rule 324 A.a. by failing to take precautions to protect public health, safety, and welfare by allowing flammable liquids to accumulate in an open top flat work tank, and failing to monitor combustible gas;
b. A one-day violation of Rule 606A.h., because Sundance failed to maintain sources of ignition at a safe distance from a flammable storage area.
c. A one-day violation of Rule 606A.m., because Sundance failed to maintain an adequate amount of fire extinguishers and other firefighting equipment located so as to be readily accessible, and plainly labeled as to its type and method of operation.
d. A one-day violation of Rule 606A.q. because Sundance failed to familiarize it’s personnel with the location of fire control equipment and train it’s personnel in the use of such equipment.
7. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Staff calculated a penalty of $4,000 for these violations. Staff does not recommend adjustments based on aggravating or mitigating factors.
AGREEMENT
NOW, THEREFORE, based on the Findings and pursuant to Rule 522.b.(3) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Sundance agrees to settle the NOAV on the following terms and conditions:
1. Sundance will be assessed a penalty of $4,000.
II. Sundance will pay $4,000, within 35 days after this AOC is mailed by the Commission.
III. Payment of the penalty pursuant to this AOC does not relieve the operator from its obligations to complete corrective actions set forth in the NOAVs, as may be amended or modified by COGCC Staff.
IV. Sundance agrees to the findings of this AOC only for the purpose of expeditiously resolving the matter without a contested hearing.
RECOMMENDED this 15th day of July, 2014.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Peter Gowen, Enforcement Officer
AGREED TO AND ACCEPTED this ______day of July, 2014.
SUNDANCE ENERGY INC.
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Sundance Energy Inc. to resolve the NOAV, the COMMISSION ORDERS:
1. Sundance is found in violation of Rule 342.A.a; Rule 606A.h., Rule 602A.m., and 602 A.q. as described above.
2. Sundance will be assessed $4,000 for the Rule violations described above.
3. Sundance will pay the penalties within 35 days after this AOC is approved by the Commission.
4. This AOC does not relieve Sundance from undertaking and completing abatement or corrective actions that may be required by the NOAV described in Finding No. 5, above, or any amendments or modifications thereto specified by the Staff.
5. Entry of this Order constitutes final agency action for purposes of judicial
review as of the date this order is mailed by the Commission. For all other purposes, this Order is effective as of the date of approval by the Commission.
7. The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
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OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Robert J. Frick, Secretary