BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF ALLEGED VIOLATIONS OF THE ) CAUSE NO. 1V
RULES AND REGULATIONS OF THE COLORADO OIL )
AND GAS CONSERVATION COMMISSION BY ) ORDER NO. 1V-341
PRESCO, INC., GARFIELD COUNTY, COLORADO )
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. On May 2, 2007, the staff (“Staff”) of the Colorado Oil and Gas Conservation Commission (“COGCC” or “Commission”) inspected oil and gas operations of Presco, Inc. (“Presco”) at the Battlement Mesa #36-13 well site (API #05-045-10840-00) located in the NW¼ NE¼ of Section 36, Township 7 South, Range 95 West, 6th P.M. See, Inspection Report #200109947.
2. The inspection was in response to a complaint alleging that a produced water pit had overflowed and flooded the location, and then fluids flowed off the location. The well site failed the inspection because stormwater best management practices (“BMPs”) failed to divert melting snow from running onto the location. Staff observed that lack of BMPs allowed melt-water to fill two pits which subsequently overflowed and flooded the pad. The secondary containment berm failed, resulting in water flowing off the pad. This was at least the second release from this location. There was less than two feet of freeboard in the pits. See, Complaint #1260668, Inspection Report #200109947; Notice of Alleged Violation (“NOAV”) #200112550; NOAV #200089773 (2006 release).
3. On May 8, 2007, Staff returned to the Battlement Mesa #36-13 well site and conducted a follow-up inspection. The site again failed the inspection because the situation at the site had not changed. Due to springtime snow-melt and run-off and the lack of adequate BMPs, run-on filled the pits, the pits overflowed onto the location, and fluids spilled off the location. See, Inspection Report #200110627.
4. On June 20, 2007, Staff issued NOAV #200112550. Among the violations alleged in the NOAV were breaches of the following Rules:
a. Rule 324A.a., which requires the operator to take precautions to prevent the unauthorized discharge or disposal of exploration and production waste (“E&P waste”), chemical substances, trash, discarded equipment or other oil field waste;
b. Rule 902.c., which requires pits to be constructed and operated to provide for a minimum of two feet of freeboard between the top of the pit wall and the fluid level of the pit;
c. Rule 906.a., which requires spills/releases of E&P waste to be controlled and contained immediately upon discovery and impacts resulting from spills/releases to be investigated and cleaned up as soon as practicable;
d. Rule 907.a.(1), which requires operators to ensure that E&P waste is properly stored, handled or disposed of to prevent threatened or actual significant adverse environmental impacts to air, water, soil or biological resources;
e. Rule 907.a.(2), which requires operators to conduct E&P waste management activities to construct and operate E&P waste management facilities to protect the waters of the state from significant adverse impacts from E&P waste; and
f. Rule 1002.e., which requires operators to implement BMPs to minimize erosion and offsite sedimentation by controlling stormwater run-off.
5. Relevant to the alleged violations cited above, the NOAV required Presco to perform the following abatement or corrective actions by July 20, 2007 (unless otherwise noted):
a. Immediately remove sufficient fluid to create two feet of freeboard between the top of the pit wall and the fluid level in the pits and subsequently maintain a minimum of two feet of freeboard;
b. Within 10 days, submit a Spill/Release Report, Form 19 for the incident;
c. Provide Staff with a full explanation of why a Spill/Release Report, Form 19 was not submitted in a timely manner;
d. Install stormwater BMPs to divert run-on around the pad;
e. Repair secondary containment berms;
f. Install stormwater BMPs to mitigate run-off from the pad; and
g. Close and reclaim the reserve pit by October 1, 2007, unless drilling operations have resumed.
6. On July 10, 2007, Presco responded to the NOAV by submitting the required Spill/Release Report, Form 19.
7. On July 23, 2007, Presco further responded to the NOAVs by providing a written explanation of why the Spill/Release Report, Form 19 had not been submitted in a timely manner. In that letter, Presco elaborated on prior verbal communication with the Staff regarding the sale of the subject property to Noble Energy, Inc. in approximately May 2007. Noble Energy, Inc. had previously contacted the Staff to explain that as the current owner, it would initiate (with the exception of submitting the Spill/Release Report, Form 19) the abatement and corrective actions required by the NOAV.
8. The Staff, after reviewing all of the information regarding discoveries made during the May 2, 2007 field inspection and the subsequent May 8, 2007 field inspection, have concluded that at the Battlement Mesa #36-13 well site, stormwater BMPs either were missing or, if present, were ineffective in diverting run-on from melting snow. As a result, two pits on the pad had overflowed and flooded the pad. Secondary containment berms failed resulting in water (both produced water and snow melt) flowing from the location into a tributary of Battlement Creek.
9. Presco should be found in violation of the following Rules at the Battlement Mesa #36-13 well site:
a. Rule 324A.a., for failure to take precautions to protect environmental quality and to prevent the unauthorized discharge of E&P waste;
b. Rule 324A.b., for failure to conduct oil and gas operations that meet the water quality standards or classifications established by the Water Quality Control Commission (“WQCC”) for waters of the state;
c. Rule 902.a., for failure to construct and operate exploration and production pits to protect waters of the state from significant adverse environmental impacts from E&P waste;
d. Rule 902.c., for failure to provide for a minimum of two feet of freeboard between the top of the pit walls and the fluid level of the pits;
e. Rule 906.a., for failure to control and contain spills/releases of E&P waste immediately upon discovery;
f. Rule 907.a.(1), for failure to ensure E&P waste is properly stored or handled to prevent threatened significant adverse environmental impacts to air, water, soil or biological resources;
g. Rule 907.a.(2), for failure to conduct E&P waste management activities and failure to construct and operate E&P waste management facilities to protect the waters of the state from significant adverse impacts from E&P waste; and
h. Rule 1002.e., for failure to implement BMPs to minimize erosion and offsite sedimentation by controlling stormwater run-off.
10. Rule 523.c. provides for the assessment of a $1,000 base fine for violation of each of the Rules described above.
11. Rule 523.a. provides for the Commission, in its discretion, to find that each day a violation exists constitutes a separate violation (limited to $1,000 per day for any single violation). Staff believe that the violations of the above Rules at the Battlement Mesa #36-13 well site existed for at least six days
12. Presco should be assessed a total fine of $48,000 for the Rule violations described above at the Battlement Mesa #36-13 well site.
13. Presco does not admit to the alleged violations but agrees to pay the total fine described above to resolve this matter without the necessity of an extended, contested hearing before the Commission.
14. Pursuant to Article VI, Section 6.02 of the “Memorandum of Agreement” between the Water Quality Control Division (“WQCD”) and the Commission, adopted August 16, 2007, Staff conferred with WQCD enforcement staff in determining the monetary penalty against Presco for violations of WQCC standards for surface waters. WQCD indicated it agrees with the fine and the terms of this Administrative Order by Consent and will not pursue any additional penalty.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Presco, Inc. shall be found in violation of the following Rules at the Battlement Mesa #36-13 well site (API #05-045-10840-00) located in the NW¼ NE¼ of Section 36, Township 7 South, Range 95 West, 6th P.M.:
a. Rule 324A.a., for failure to take precautions to protect environmental quality and to prevent the unauthorized discharge of E&P waste;
b. Rule 324A.b., for failure to conduct oil and gas operations that meet the water quality standards or classifications established by the Water Quality Control Commission for waters of the state;
c. Rule 902.a., for failure to construct and operate exploration and production pits to protect waters of the state from significant adverse environmental impacts from E&P waste;
d. Rule 902.c., for failure to provide for a minimum of two feet of freeboard between the top of the pit walls and the fluid level of the pits;
e. Rule 906.a., for failure to control and contain spills/releases of E&P waste immediately upon discovery;
f. Rule 907.a.(1), for failure to ensure E&P waste is properly stored or handled to prevent threatened significant adverse environmental impacts to air, water, soil or biological resources;
g. Rule 907.a.(2), for failure to conduct E&P waste management activities and failure to construct and operate E&P waste management facilities to protect the waters of the state from significant adverse impacts from E&P waste; and
h. Rule 1002.e., for failure to implement BMPs to minimize erosion and offsite sedimentation by controlling storm-water run-off.
IT IS FURTHER ORDERED, that Presco, Inc. shall be assessed a total fine of Forty-eight Thousand dollars ($48,000) for the Rule violations set forth above, which shall be payable within thirty (30) days of the date this order is approved by the Commission.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
RECOMMENDED this day of December, 2008.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Carol Harmon, Enforcement Officer
Dated at Suite 801
1120 Lincoln St.
Denver, Colorado 80203
December 12, 2008
AGREED TO AND ACCEPTED this _________day of_______________, 2008.
PRESCO, INC.
By __________________________________________
Signature of Authorized Company Representative
____________________________________________
Print Signatory Name
____________________________________________
Title
============================================================================
This cause came on for hearing before the Commission at 9:00 a.m. on January 13, 2009, in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, for the approval of this Administrative Order by Consent.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By____________________________________
Robert A. Willis, Acting Secretary
Dated at Suite 801
1120 Lincoln Street
Denver, Colorado 80203