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 STELBAR CORPORATION INC, WASHINGTON COUNTY, COLORADO |
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CAUSE NO. 1V DOCKET NO. 150700334
TYPE: ENFORCEMENT
ORDER NO. 1V-516
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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)
FINDINGS
1. Stelbar Corporation, Inc. (“Stelbar”) (Operator No. 82470) is the operator of the Maggard 1-11 Well (API No. 05-121-09518) (“Well”) in Washington County.
2. During a February 6, 2015 inspection, COGCC Staff discovered that an unlined produced water pit had recently been constructed to the southwest of the Well (Doc. No. 678200103). This pit was constructed without prior approval of a Form 2A, Oil and Gas Location Assessment, as required by Rule 303.b.(1)C of the Rules and Regulations of the Colorado Oil and Gas Conservation Commission, 2 CCR 404-1 (“Rule” or “Rules”), or prior approval of a Form 15, Earthen Pit Report/Permit, as required by Rule 903.a.(1).
3. At the inspection, COGCC Staff also discovered that two historic produced water pits (Facility ID Nos. 104543 and 268283) had been backfilled to surface grade and showed evidence of recent earthwork. COGCC did not receive a Form 27, Site Investigation and Remediation Workplan, prior to the closure of the pits as required by Rule 905.b. Aerial photographs confirmed that the old pits were closed and the new pit was constructed in 2013.
4. In addition, there was a bare area downgradient from the former produced water pits and skim tanks that was consistent with an historic produced water release. This area of stressed vegetation and bare ground was visible on a 2013 COGIS Aerial photograph.
5. On March 13, 2015, COGCC Staff issued Notice of Alleged Violation (“NOAV”) No. 200426372 to Stelbar for violations at the Well of the following Rules:
a. Rule 303.b.(1)C (Oil and Gas Location Assessment) for the failure to file and obtain prior approval of a Form 2A before constructing the new pit;
b. Rule 903.a.(1) (Pit Permitting/Reporting Requirements) for the failure to file and obtain prior approval of a Form 15 before constructing the new pit;
c. Rule 905.b. (Closure of pits, and buried or partially buried produced water vessels) for the failure to file and obtain prior approval of a Form 27 before closing the old pits; and
d. Rule 906.b. (Reporting spills or releases of E&P Waste or produced fluids) for the failure to report a spill/release of produced fluids.
6. On February 13, 2015, Stelbar submitted a Form 27, Site Investigation and Remediation Workplan, for the closure of the old pits. On April 9, 2015, this Form 27 was conditionally approved and Remediation Project #8973 was assigned to the site.
7. On May 15, 2015, Stelbar submitted two Form 15s, Earthen Pit Report/Permits (Doc. Nos. 400838218 & 400839034) and two Form 2As, Oil and Gas Location Assessments (Doc Nos. 400838309 & 400840096) for the pit facilities.
8. Following a factual investigation and legal review of the violations alleged in the NOAVs referenced above, COGCC Staff now asserts Stelbar has committed the following violations:
|
Rule |
Rule Title |
Penalty Statute |
Base Penalty |
Start Date |
End Date |
Days |
Total Penalty |
|
303.b.(1)C |
Oil and Gas Location Assessment |
Old |
$1,000 |
2013 |
ONGOING |
10 |
$10,000 |
|
903.a.(1) |
Pit Permitting/ Reporting Requirements |
Old |
$1,000 |
2013 |
ONGOING |
10 |
$10,000 |
|
905.b. |
Closure of pits, and buried or partially buried produced water vessels |
Old |
$1,000 |
2013 |
2/13/2015 |
10 |
$10,000 |
|
905.b. |
Closure of pits, and buried or partially buried produced water vessels |
Old |
$1,000 |
2013 |
2/13/2015 |
10 |
$10,000 |
|
906.b. |
Reporting spills or releases of E&P Waste or produced fluids |
Old |
$1,000 |
2013 |
ONGOING |
10 |
$10,000 |
|
TOTAL PENALTY |
$50,000 |
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9. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $45,000 for these violations. The penalty calculation is based on the following:
a. Because the Rule violations began prior to the effective date of HB 14-1356 (June 6, 2014), staff calculated daily penalty of $1,000 per day under the old penalty structure;
b. Statutory limit of ten days of violation;
c. Staff is willing to accept a 10% discount to the calculated total penalty as settlement inducement;
d. No aggravating or mitigating factors;
e. No pattern of violations or gross negligence/willful misconduct.
AGREEMENT
NOW, THEREFORE, based on the Findings and pursuant to Rule 522.e.(1) and the Commission’s Enforcement and Penalty Policy, the Director proposes and Stelbar agrees to settle the NOAV on the following terms and conditions:
III. Stelbar will pay the $45,000 penalty within 30 days after the approved AOC is mailed by the Commission.
IV. Stelbar will perform the following corrective actions:
a. Submit a Form 19, Spill/Release Report, for the historic release by June 30, 2015.
b. Implement and fulfill the requirements of the conditionally approved Form 27 and Remediation Project #8973 for the closure of the old pits and remediation of the historic release by July 31, 2015.
c. 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 NOAVs, as may be amended or modified by COGCC Staff.
RECOMMENDED this ____ day of June, 2015.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Britta Beckstead, Assistant Attorney General
AGREED TO AND ACCEPTED this ______day of June, 2015.
STELBAR CORPORATION INC
By
Signature of Authorized Company Representative
Print Signatory Name and Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Stelbar to resolve the NOAV, the COMMISSION ORDERS:
4. Stelbar will perform the following corrective actions:
a. Submit a Form 19, Spill/Release Report, for the historic release by June 30, 2015.
b. Implement and fulfill the requirements of the conditionally approved Form 27 and Remediation Project #8973 for the closure of the old pits and remediation of the historic release by July 31, 2015.
c. These corrective actions must otherwise comply with Commission Rules
5. 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.
6. 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. For all other purposes, this Order is effective as of the date this matter is heard and approved 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.
ENTERED this _____ day of July, 2015 as of the 20th day of July, 2015.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary