BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
|
IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES AND REGULATIONS OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION BY WELLSTAR CORPORATION, JACKSON COUNTY, COLORADO |
) ) ) ) ) ) ) |
CAUSE NO. 1V
DOCKET NO. 160600141
TYPE: ENFORCEMENT
ORDER NO. 1V-583 |
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. Wellstar Corporation (“Wellstar”) (Operator No. 95245) is the operator of record of the Three Rivers Unit 10-2H well (API No. 05-057-06476) (the “Well”) and the Bush Draw Federal 10-2 location (Location ID 324761) (the “Location”) located in Jackson County, Colorado.
2. On April 28, 2014, the Commission entered Administrative Order by Consent 1V-460 in which Staff and Wellstar agreed to resolve an enforcement action resulting from violations of Rules 905.a. and 1003 at the Well. At Page 2, Paragraph IV, Wellstar agreed to “perform other interim reclamation as required by Rule 1003” at the Well. This obligation was included as part of Order 1V-460.
3. Between May 19, 2014 and October 13, 2015, COGCC Staff conducted five inspections of the Well and Location and cited repeated and ongoing violations of COGCC Rules.
|
COGCC Inspections of the Three Rivers Unit 10-2H |
||
|
Inspection # |
Inspection Date |
Document No. |
|
1 |
May 19, 2014 |
673400565 |
|
2 |
July 22, 2014 |
673400869 |
|
3 |
September 9, 2015 |
673402436 |
|
4 |
September 9, 2015 |
680100134 |
|
5 |
October 13, 2015 |
673402544 |
4. Staff observed inadequate signs and markers at the Location, including the wellhead sign, tank labels, and tank battery sign, in violation of Rule 210 during Inspection Nos. 1, 2, 3, and 5.
5. Staff observed inadequate secondary containment berms around the tank battery on the Location in violation of Rule 605.a.(4) during Inspection Nos. 3 and 5.
6. Staff observed spills/releases of hydrocarbons around the wellhead that were not properly controlled or contained in violation of Rule 906 during Inspection Nos. 1, 2, 3, and 5.
7. Staff observed inadequate stormwater best management practices (“BMP”) on the Location in violation of Rule 1002 during Inspection Nos. 1, 2, 3, 4, and 5.
8. Staff observed that Wellstar failed to conduct the requisite interim reclamation of the Location in violation of Rule 1003 and Order 1V-460 during Inspection Nos. 1, 2, 3, 4, and 5.
9. On December 31, 2015, Commission Staff issued Notices of Alleged Violation (“NOAV”) (Nos. 400957128 and 400956756) to Wellstar citing violations of § 34-60-121(1), C.R.S. for violating Commission Order 1V-460 and the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 210 (Signs and Markers) for failure to maintain proper signage at the wellhead, tank, or battery;
b. Rule 605.a.(4) (Oil and Gas Facilities – Berms and Other Secondary Containment) for failure to maintain adequate secondary containment for the tank battery;
c. Rule 906 (Spills and Releases) for failure to properly control, contain, and document spills/releases from the wellhead; and failure to implement measures necessary to prevent recurring spills/releases; and
d. Rule 1002.f. (Site Preparation and Stabilization - Stormwater Management) for failure to install and maintain appropriate stormwater BMPs at the Well.
10. On February 4, 2016, Wellstar entered into discussions with Staff regarding the Well and Location and commenced corrective actions to rectify the above violations. Wellstar now intends to plug and abandon the Well and perform final reclamation on the Location.
11. Following factual investigation and legal review of the violations alleged in the NOAVs, Hearing Staff now asserts Wellstar violated § 34-60-121(1), C.R.S., and Rules 210, 605.a.(4), 906, and 1002.f. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $210,820 for these violations. The penalty calculation is based on the following:
|
NOAV No. |
Rule |
Days |
Start Date |
End Date |
Daily Base Penalty |
Total Penalty |
|
|
400957128 |
§34-60-121(1) |
395 |
1/5/2015 |
2/4/2016 |
$3,000 |
$117,240 |
|
|
400957128 |
210 |
395 |
1/5/2015 |
2/4/2016 |
$1,000 |
$24,540 |
|
|
400956756 |
605.a.(4) |
148 |
9/9/2015 |
2/4/2016 |
$1,000 |
$19,960 |
|
|
400957128 |
906 |
395 |
1/5/2015 |
2/4/2016 |
$1,000 |
$24,540 |
|
|
400956756 |
1002.f. |
395 |
1/5/2015 |
2/4/2016 |
$1,000 |
$24,540 |
|
|
TOTAL PENALTY |
$210,820 |
||||||
a. Current versions of § 34-60-121 C.R.S. and Rule 523;
b. Application of the Duration Matrix from the COGCC Enforcement Guidance and Penalty Policy January 2015 (corrected 4/8/2015);
c. § 34-60-121(1) C.R.S.;
i. Commencement date of violation limited by one-year statute of limitations (§ 34-60-115, C.R.S.) and continued through February 4, 2016 (the day Wellstar commenced corrective actions);
ii. Class 3;
iii. Minor impact;
iv. Daily base penalty of $3,000;
d. Rules 210, 906, and 1002.f.;
i. Commencement date of violation limited by one-year statute of limitations (§ 34-60-115, C.R.S.) and continued through February 4, 2016 (the day Wellstar commenced corrective actions);
ii. Class 2;
iii. Minor impact;
iv. Daily base penalty of $1,000;
e. Rule 605.a.(4);
i. Violation commenced on September 9, 2015 (date of first inspection in which ongoing violation was observed by Staff) and continued through February 4, 2016 (the day Wellstar commenced corrective actions);
ii. Class 2;
iii. Minor impact;
iv. Daily base penalty of $1,000;
f. All violations
i. Daily base penalty adjusted to ensure that the penalty is appropriate to the nature of the violation;
ii. No aggravating factors;
iii. No mitigating factors;
iv. No pattern of violation; and
v. No gross negligence or knowing and willful misconduct.
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 Wellstar Corporation agrees to settle the NOAV on the following terms and conditions:
I. Wellstar violated § 34-60-121(1), C.R.S., and Rules 210, 605.a.(4), 906, and 1002.f., as described above.
II. Penalty:
a. Wellstar will be assessed a total penalty of $210,820.
b. Wellstar will pay $30,000 within 30 days after this AOC is mailed by the Commission;
c. The remaining $180,820 will be suspended pending Wellstar’s timely completion of the Corrective Actions set forth below.
i. Should Wellstar timely complete the Corrective Actions set forth in Paragraph III, the portion of the suspended penalty corresponding to that Corrective Action will be vacated.
ii. Should Wellstar fail to timely complete a Corrective Action set forth in Paragraph III, the corresponding portion of the suspended penalty will be due, and received by the Commission, no later than 30 calendar days after a written demand for payment by the Director, which will be served pursuant to Rule 521 at Wellstar’s address of record, on file with the COGCC pursuant to Rule 302, and without further action by the Commission.
III. Corrective Actions and Corresponding Penalties:
a. Wellstar will plug and abandon the Well in accordance with Rule 319 and submit the requisite Form 6 (Well Abandonment Report, Subsequent) no later than August 31, 2016.
Corresponding Penalty: $45,205
b. Wellstar will complete all reclamation, site stabilization, and reseeding requirements set forth in Rule 1004.a. at the Location and submit a Form 42 (Field Operations Notice) informing Staff of the completed work by September 30, 2016.
Corresponding Penalty: $54,246
c. No later than June 15, 2017, Wellstar will either 1) accomplish a vegetative cover of four perennial seedlings per square foot of the entire location and submit a Form 42 (Field Operations Notice) informing Staff of such, or 2) should such vegetative cover not be present, submit to COGCC Staff a Final Reclamation Plan detailing those actions it will take to achieve successful reclamation of the location, beginning with a reseeding of the Location to be completed no later than July 7, 2017.
Corresponding Penalty: $27,123
d. Wellstar will maintain ongoing weed control at the Location in accordance with Rule 1004 until the Location passes a Final Reclamation Inspection.
Corresponding Penalty: $18,082
e. No later than June 6, 2021, Wellstar will complete final reclamation in accordance with Rule 1004 and pass a Final Reclamation Inspection in accordance with Rule 1004.c.
Corresponding Penalty: $36,164
IV. Consequences of Default:
Should Wellstar fail to timely perform two or more of the above-described Corrective Actions, or should Wellstar fail to timely pay any portion of the penalty assessed under this agreement, the total penalty remaining, including any remaining suspended portion (less any payments already made), will be due, and received by the Commission, no later than 30 calendar days after a written demand for payment by the Director, which will be served pursuant to Rule 521 at Wellstar’s address of record, on file with the COGCC pursuant to Rule 302, and without further action by the Commission.
RECOMMENDED this 25th day of May, 2016.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
David A. Beckstrom, Enforcement Officer
AGREED TO AND ACCEPTED this day of , 2016.
WELLSTAR CORPORATION
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Wellstar Corporation to resolve the NOAV, the COMMISSION ORDERS:
1. Wellstar is found in violation of § 34-60-121(1), C.R.S., and Rules 210, 605.a.(4), 906, and 1002.f., as described above.
2. Penalty:
a. Wellstar will be assessed a total penalty of $210,820.
b. Wellstar will pay $30,000 within 30 days after this AOC is mailed by the Commission;
c. The remaining $180,820 will be suspended pending Wellstar’s timely completion of the Corrective Actions set forth below.
i. Should Wellstar timely complete the Corrective Actions set forth in Paragraph 3, the portion of the suspended penalty corresponding to that Corrective Action will be vacated.
ii. Should Wellstar fail to timely complete a Corrective Action set forth in Paragraph 3, the corresponding portion of the suspended penalty will be due, and received by the Commission, no later than 30 calendar days after a written demand for payment by the Director, which will be served pursuant to Rule 521 at Wellstar’s address of record, on file with the COGCC pursuant to Rule 302, and without further action by the Commission.
3. Corrective Actions and Corresponding Penalties:
a. Wellstar will plug and abandon the Well in accordance with Rule 319 and submit the requisite Form 6 (Well Abandonment Report, Subsequent) no later than August 31, 2016.
Corresponding Penalty: $45,205
b. Wellstar will complete all reclamation, site stabilization, and reseeding requirements set forth in Rule 1004.a. at the Location and submit a Form 42 (Field Operations Notice) informing Staff of the completed work by September 30, 2016.
Corresponding Penalty: $54,246
c. No later than June 15, 2017, Wellstar will either 1) accomplish a vegetative cover of four perennial seedlings per square foot of the entire location and submit a Form 42 (Field Operations Notice) informing Staff of such, or 2) should such vegetative cover not be present, submit to COGCC Staff a Final Reclamation Plan detailing those actions it will take to achieve successful reclamation of the location, beginning with a reseeding of the Location to be completed no later than July 7, 2017.
Corresponding Penalty: $27,123
d. Wellstar will maintain ongoing weed control at the Location in accordance with Rule 1004 until the Location passes a Final Reclamation Inspection.
Corresponding Penalty: $18,082
e. No later than June 6, 2021, Wellstar will complete final reclamation in accordance with Rule 1004 and pass a Final Reclamation Inspection in accordance with Rule 1004.c.
Corresponding Penalty: $36,164
4. Consequences of Default: Should Wellstar fail to timely perform two or more of the Corrective Actions described in Paragraph III of the Agreement section of this AOC, or should Wellstar fail to timely pay any portion of the penalty assessed under this AOC, the total penalty remaining, including any remaining suspended portion (less any payments already made), will be due, and received by the Commission, no later than 30 business days after a written demand for payment by the Director, which will be served pursuant to Rule 521 at Wellstar’s address of record, on file with the COGCC pursuant to Rule 302, and without further action by the Commission.
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 35 calendar days prior to the pertinent compliance deadline or as soon as possible if 35 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. Failure to timely pay any penalty under this Order is an independent violation that may be subject to additional penalties.
7. This Order is effective as of the date it is mailed by the Commission. It constitutes final agency action for purposes of judicial review.
8. 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 June, 2016 as of the day of June, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary
CERTIFICATE OF MAILING
On June ____, 2016, a true and accurate copy of Commission Order 1V- 583 was mailed by first-class mail return receipt requested to the following:
Wellstar Corporation
Attn: Paul Noble and Tim Collins
11990 Grant Street, Ste. 550
Northglenn, CO 80233
Signature