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 BAYSWATER EXPLORATION & PRODUCTION, LLC, ADAMS COUNTY, COLORADO |
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CAUSE NO. 1V
DOCKET NO. 150700256
TYPE: ENFORCEMENT
ORDER NO. 1V-511
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ADMINISTRATIVE ORDER BY CONSENT
(Pursuant to Rule 522.e.(1) of the Rules and Regulations of the
Colorado Oil and Gas Conservation Commission, 2 CCR 404-1)
I. FINDINGS
1. Bayswater Exploration & Production, LLC (“Bayswater”) (Operator No. 10261) is the operator of the Clifford Causey No. 10 Well (API No. 05-001-05242) (the “Well”) in Adams County.
2. The Causey 10, 17, 20 north Produced Water Pit (Facility No. 113872) (the “Pit”) is located on the same facility as the Well and also operated by Bayswater. Water produced from the Well was stored in the Pit.
3. On May 9, 2013, a spill of 15-40 barrels of produced water occurred at the Pit (Spill Tracking No. 2232945) (“Spill #1). Spill #1 did not result in an enforcement action. Spill #1 was closed on July 9, 2013, with approval of Remediation Project No. 7875.
4. Following Spill #1, Bayswater failed to install water level gauging or monitoring equipment in order to monitor freeboard in the Pit.
5. On February 5, 2015, produced water overflowed the Pit causing erosion in the containment berm and resulting in an uncontrolled release of approximately 15,000 barrels of produced water (the “Spill #2”). The spilled produced water reached a dry drainage below the Pit that feeds into an intermittent stream known as Badger Creek.
6. Spill #2 was discovered by Bayswater on February 5, 2015.
7. On February 6, 2015, Bayswater reported Spill #2 to the Colorado Oil and Gas Conservation Commission (“Commission”) through the submission of a Form 19 (Spill Tracking No. 400787235).
8. Also on February 6, 2015, Bayswater removed water from the drainage to Badger Creek and repaired the breach in the Pit berm.
9. On February 9, 2015, Commission Staff inspected the Pit and Spill #2 (Field Inspection No. 667500320). Commission Staff observed that the produced water flowed into the dry drainage below the Pit and into Badger Creek, which was also reportedly dry at the time of the release. Staff did not observe any produced water remaining in Badger Creek at the time of the inspection. Staff did not observe any oil in the drainage or in Badger Creek.
10. On February 11, 2015, Commission Staff issued Notice of Alleged Violation No. 200423832 (the “NOAV”) to Bayswater for violations at the Pit of the following Rules and Regulations of the Colorado Oil and Gas Conservation Commission, 2 CCR 404-1:
a. Rule 902.a. (Pits – General and Special Rules) for the failure to operate the Pit to protect public health, safety, and welfare and the environment from significant adverse environmental, public health, or welfare impacts from E&P waste.
b. Rule 902.b. (Pits – General and Special Rules) for the failure to provide for a minimum of two (2) feet of freeboard at all times between the top of the pit wall at its point of lowest elevation and the fluid level of the Pit and for a failure to have a method of monitoring and maintaining proper freeboard at the Pit.
11. On February 13, 2015, Bayswater submitted a Form 27 (Document No. 2313959) which detailed a remediation plan that complied with the abatement and corrective action required by the NOAV. Since submitting the Form 27, Bayswater has discontinued use of the Pit, sampled soil, surface water, and ground water pursuant to Commission Staff requirements, and contacted engineers to determine how the Pit may be best rebuilt.
12. Following a factual investigation and legal review of the violations alleged in the NOAVs referenced above, COGCC Staff now asserts Bayswater has committed the following violations:
|
Rule Violation |
Penalty Act and Class/Impact |
Base Penalty |
Start Date |
End Date |
Days of Violation |
Penalty per Violation |
|
902.a. |
New Class 2/Moderate |
$5,000 |
2/5/2015 |
2/6/2015 |
1 |
$5,000 |
|
902.b. |
New Class 2/Moderate |
$5,000 |
2/5/2015 |
2/6/2015 |
1 |
$5,000 |
|
TOTAL PENALTY |
$10,000 |
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13. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $10,000 for this violation. Hearings Staff did not believe that an adjustment to this amount was merited because while mitigating factors exist, there was a moderate adverse impact and a similar spill occurred at this site before (though Hearing Staff did not believe this amounted to a pattern of violation). The penalty calculation is based on the following:
a. The Rule violations occurred after the effective date of HB 14-1356 but prior to the effective date of the recently revised Rules 522 and 523 (March 2, 2015). Therefore, the penalty for these violations have been calculated pursuant to § 34-60-121, C.R.S., with reference to the revised Rules 522 and 523 for guidance.;
b. The violation began on February 5, 2015, the date the spill occurred. The violation ended on February 6, 2015, the date Bayswater commenced appropriate corrective actions;
c. No aggravating factors apply;
d. The following mitigating factors apply:
ii. Operator self-reported the spill;
iii. Operator cooperating with the Commission;
iv. Operator demonstrated prompt, effective and prudent response to the violations;
v. The Operator made a good faith effort to comply with applicable requirements prior to the Commission learning of the spill;
e. No pattern of violation; and
f. No gross negligence or knowing and willful misconduct.
II. AGREEMENT
NOW, THEREFORE, based on the Findings and pursuant to Rule 522.e.(1)A. and the Commission’s Enforcement and Penalty Policy, the Director proposes and Bayswater agrees to settle the NOAV on the following terms and conditions:
III. Bayswater will pay the $10,000 penalty within 30 days after the approved AOC is mailed by the Commission.
IV. Bayswater will comply with the requirements of conditionally approved Doc. No. 2313959/Remediation Project 8916 to:
a. Clean-up and reclaim the Spill;
b. Properly engineer and rebuild the northeast corner of the Pit to prevent any future release and install water level gauging or monitoring at the Pit; and
c. Submit reports detailing the engineering activities, rebuilding activities and installation of water level gauging or monitoring activities at the Pit for approval by the Commission Staff by June 15, 2015. Commission approval is required prior to resuming use of the Pit.
d. These corrective actions must otherwise comply with Commission Rules.
V. Payment of the penalty pursuant to this AOC does not relieve the operator from its obligations to complete corrective actions set forth in the NOAV, as may be amended or modified by Commission Staff.
RECOMMENDED this 20 day of May, 2015.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Kyle W. Davenport, Assistant Attorney General
AGREED TO AND ACCEPTED this ______day of _________, 2015.
BAYSWATER EXPLORATION & PRODUCTION, LLC
By
Signature of Authorized Company Representative
Print Signatory Name
Title
III. ORDER
HAVING CONSIDERED the Agreement between the Director and Bayswater to resolve the NOAV, the COMMISSION ORDERS:
1. Bayswater is found in violation of Rules 902.a. and 902.b., as described above.
2. Bayswater will be assessed a penalty of $10,000 for the violations described above.
3. Bayswater will pay the $10,000 penalty within 30 days after the approved AOC is mailed by the Commission. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.
4. Bayswater will comply with the requirements of conditionally approved Doc. No. 2313959/Remediation Project 8916 to:
a. Clean-up and reclaim the Spill;
b. Properly engineer and rebuild the northeast corner of the Pit to prevent any future release and install water level gauging or monitoring at the Pit;
c. Submit reports detailing the engineering activities, rebuilding activities and installation of water level gauging or monitoring activities at the Pit for approval by the Commission Staff by June 15, 2015. Commission approval is required prior to resuming use of the Pit.
d. These corrective actions must otherwise comply with Commission Rules.
5. Payment of the penalty pursuant to this AOC does not relieve the operator from its obligations to complete corrective actions set forth in the NOAV, as may be amended or modified by Commission Staff.
6. Compliance dates specified in this Order may be extended only for good cause, as determined at the Director’s sole discretion. A request for extension must be made, in writing, at least 30 days prior to the pertinent compliance deadline or as soon as possible if 30 days prior notice is not feasible. Failure to receive an extension prior to the compliance deadline or the failure to meet a compliance deadline may constitute a new violation subject to additional penalties.
7. Entry of this Order constitutes final agency action for purposes of judicial review 30 days after the date this order is mailed by the Commission.
8. The provisions contained in the above Order are effective on the date this matter is heard and approved by the Commission.
9. 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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ENTERED this _____ day of __________, 2015 as of the 20th day of July, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary