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 CARRIZO NIOBRARA, LLC, WELD COUNTY, COLORADO |
) ) ) ) )
|
CAUSE NO. 1V DOCKET NO. 160100076 ORDER NO. 1V-589 TYPE: ENFORCEMENT |
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. Carrizo Niobrara LLC (“Carrizo”) (Operator No. 10439) is the operator of record of the O’Hare #2-29-11-57 well (“Well”) (API No. 05-123-40082) located in Weld County, Colorado.
2. On December 10, 2014, Carrizo completed the Well and on December 26, 2014, Carrizo performed production testing on the Well.
3. Starting February 17, 2015, Carrizo began the unauthorized flaring of the Well without notice to the Commission and without Director approval.
4. Carrizo undertook this flaring of natural gas without notifying local emergency dispatch or the local government designee.
5. On October 9, 2015, Commission Staff issued a Notice of Alleged Violation (“NOAV”) (No. 1898000) to Carrizo citing a violation of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 912 (Venting or Flaring Natural Gas)
6. On September 28, 2015, Carrizo submitted a Form 4 (Sundry – Notice of Intent and Request to Vent or Flare) listing January 17, 2015 as the approximate start date of the requested flaring; Engineering Staff approved this Sundry on September 29, 2015. The submittal of this Form 4 satisfied the corrective action requirements of NOAV No. 1898000.
7. On September 15, 2015, Carrizo disclosed to COGCC staff a list of additional wells at which Carrizo had also flared without notice to the Commission and without Director approval. Staff did not issue NOAVs for these wells, as Carrizo submitted appropriate Form 4s shortly after the disclosure.
8. Following factual investigation and legal review of the violations alleged in the NOAV, Hearing Staff now asserts Carrizo has committed a 223-day violation of Rule 912 at the O’Hare #2-29-11-57 Well.
9. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $40,000 for this violation. The penalty calculation is based on the following:
|
Rule No. |
Days of Violation |
Start Date |
End Date |
Class |
Impact |
Daily Base Penalty |
Total Penalty |
|
912 |
223 |
2/17/2015 |
9/28/2015 |
2 |
Minor |
$2,500 |
$53,450 |
|
|
Settlement Discount |
$13,450 |
|||||
|
Final Penalty |
$40,000 |
||||||
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. Violation start date of February 17, 2015 and end date of September 24, 2015;
d. Class 2;
i. Reclassification of Rule 912 reduced from Class 3 to Class 2 because the flaring violation does not have environmental consequence of venting, which is the basis for the Rule 912 classification;
e. Minor impact;
f. Daily base penalty of $2,500;
g. No aggravating factors;
h. No mitigating factors;
i. Settlement Discount;
j. No pattern of violation; and
k. 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 Carrizo Niobrara LLC agrees to settle the NOAV on the following terms and conditions:
I. Carrizo is found in violation of Rule 912 at the O’Hare #2-29-11-57 Well as described above.
II. Carrizo will be assessed a penalty of $40,000, which will be due within 30 days after the approved AOC is mailed by the Commission.
III. Commission staff agrees it will not pursue formal enforcement at the Wells mentioned in paragraph 7 above for the violations disclosed on September 15, 2015.
IV. Carrizo agrees to the findings of this AOC only for the purpose of expeditiously resolving this matter without a contested hearing. Carrizo reserves the right to contest these findings in any proceeding before any agency, court, or other tribunal, except for a proceeding to enforce the terms of this AOC. The findings and any action undertaken by Carrizo pursuant to this AOC shall not constitute evidence of fault or liability by Carrizo with respect to any third-party claim against Carrizo. This AOC does not constitute an admission by Carrizo of any alleged violation, factual allegation, or penalty determination or component.
RECOMMENDED this 24th day of June, 2016.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
Peter J. Gowen, Enforcement Supervisor
AGREED TO AND ACCEPTED this day of , 2016.
CARRIZO NIOBRARA LLC
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Carrizo Niobrara LLC to resolve the NOAV, the COMMISSION ORDERS:
1. Carrizo is found in violation of Rule 912 at the O’Hare #2-29-11-57 Well as described above.
2. Carrizo is assessed a penalty of $40,000, which will be due within 30 days after the approved AOC is mailed by the Commission.
3. This Order is effective as of the date it is mailed by the Commission. It constitutes final agency action for purposes of judicial review.
4. 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 , 2016 as of the day of July, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary
CERTIFICATE OF MAILING
On July , 2016 a true and accurate copy of Commission Order 1V-589 was mailed by first-class mail return receipt requested to the following:
Carrizo Niobrara LLC
ATTN: Scott Hudson
500 Dallas Street
Suite 2300
Houston, TX 77002
____________________________________