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 MONUMENT GLOBAL RESOURCES INC, MONTEZUMA COUNTY, COLORADO |
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CAUSE NO. 1V
DOCKET NO. 150900160
TYPE: ENFORCEMENT
ORDER NO. 1V-541
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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. Monument Global Resources, Inc. (“Monument”) (Operator No. 10430) is the operator of record of the Cache Unit 1 Well (API No. 05-083-05153), Cache Unit 6 Well (API No. 05-083-05152), and Cache Unit 9 Well (API No. 05-083-05148) in Montezuma County.
A. Spill #1, Remediation Project #7786
1. Spill #1 occurred along a flowline near the Cache Unit 9 Well on September 7, 2012. The spill impacted the East Fork of McElmo Creek. Monument did not verbally report the spill, which impacted waters of the state, to the Director within 24-hours of discovery.
2. Monument submitted a Form 19 on December 11, 2012 (Doc. No. 200372184). This Form 19 indicated that 5 barrels of oil and 1 barrel of water had spilled on September 7, 2012, but did not describe any impacts to surface water.
3. On April 19, 2013, Staff received a complaint from the surface owner of the lands where the Cache Unit 9 and 6 Wells are located, regarding oil spills that had not been cleaned up on his property (Doc. No. 200379016). Staff inspected the site on April 26, 2013 (Doc. No. 200372184, “Field Visit/Follow Up”). Staff observed that the spill had reached the East Fork of McElmo Creek, a water of the state, and that the spill was still present in the creek bottom – as far as 600 feet downstream. Complete spill remediation had also not occurred by that time. In addition, the damaged flowline had been replaced, but the joints on the old line showed evidence of oil leakage and were in poor condition.
4. On May 1, 2013, COGCC Staff issued Notice of Alleged Violation (“NOAV”) No. 200379257 for violations of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 906.a. (Spills/Releases, General) for the failure to investigate and clean up Spill #1 as soon as practicable;
b. Rule 906.b. (Reportable spills and reporting requirements for spills/releases) for the failure to report Spill #1; and
c. Rule 1102.a.(1) (Maintenance) for the failure to take reasonable precautions to prevent failures, leakage, corrosion of pipelines, and therefore, additional releases.
5. A Form 27 was submitted by Monument on May 16, 2013 (Doc. No. 200380206). Due to surface access issues, Monument could not begin clean-up immediately. A section of the flowline was replaced with new pipe and rerouted on risers to keep the pipeline out of the streambed.
6. On March 18, 2015, Staff performed a follow-up inspection and did not observe evidence of any remaining impacts (Doc. No. 2533890). The approved Form 27 Remediation Work Plan required Monument to document the actions taken and submit that documentation to COGCC.
7. On May 7, 2015, Staff sent Monument a Warning Letter (Doc. No. 2533889) (“May 7, 2015 Warning Letter”) requiring Monument to submit a supplemental report on Remediation Project #7786 by June 8, 2015. This documentation was not received by the deadline.
8. On June 23, 2015, Staff issued NOAV No. 200434664 to Monument for a violation of Rule 906.c.(1) (Spills/Releases, Remediation)/Rule 909.e.(2)B (Notification of compliance with an approved workplan) for the failure to submit the supplemental report required by the Director regarding Spill #1.
9. On August 5, 2015, Monument submitted a Form 27, which provided future deadlines for work to be performed but did not provide a sufficiently detailed explanation of past actions taken (Doc. No. 2495346).
10. On September 18, 2015, Monument submitted a Supplemental Form 27 describing analytical results and outlining why no further action is required at the site (Doc. No. 2315522). On September 21, 2015, Staff closed Remediation Project 7786 because it required no further action.
B. Spill #2, Remediation Project #7787
11. Spill #2 occurred along a flowline near the Cache Unit 6 Well in April of 2012. The spill impacted a tributary of the East Fork of McElmo Creek.
12. On December 12, 2012, Monument submitted a Form 19, Spill/Release Report, which stated that there was an historical oil spill of an unknown volume and extent. No impacts to surface water were noted in the report (Doc. No. 200372183).
13. After receiving the complaint described above on April 19, 2013, Staff inspected the site on April 26, 2013 (Doc. No. 200372183, “Field Visit/Follow Up”). Staff observed that the spill had reached a tributary of the East Fork of McElmo Creek, a water of the state, and that the spill was still present in the tributary and had traveled approximately a quarter mile downstream. Complete spill remediation had also not occurred by that time. In addition, the damaged flowline had been replaced, but the joints on the old line showed evidence of oil leakage.
14. On May 1, 2013, COGCC Staff issued NOAV No. 200379270 for violations of the following Rules:
a. Rule 906.a. (Spills/Releases, General) for the failure to investigate and clean up Spill #2 as soon as practicable; and
b. Rule 1102.a.(1) (Maintenance) for the failure to take reasonable precautions to prevent failures, leakage, corrosion of pipelines, and therefore, additional releases at the site of Spill #2.
16. On March 18, 2015, Staff performed a follow-up inspection and observed signs of surface disturbance and oil-staining beneath overturned rocks (Doc. No. 2533890). Soil samples taken on March 25, 2014 by Monument’s consultant exceeded Table 910-1 standards for total petroleum hydrocarbons (TPH) concentration levels and pH. Staff concluded that further remediation was necessary to bring the site into compliance.
17. The May 7, 2015 Warning Letter required Monument to perform further remediation and submit a supplemental report on Remediation Project #7787 by June 8, 2015. This documentation was not received by the deadline.
18. On June 23, 2015, Staff issued NOAV No. 200434664 to Monument for violations of Rule 906.c.(1) (Spills/Releases, Remediation)/Rule 909.e.(2)B (Notification of compliance with an approved workplan) for the failure to submit the supplemental report required by the Director regarding Spill #2.
19. On July 16, 2015, Staff inspected the site of Spill #2 and observed that none of the corrective actions required by the Warning Letter had been completed (Doc. No. 674900692).
20. On August 5, 2015, Monument submitted a Form 27, which provided future deadlines for work to be performed but did not provide a sufficiently detailed explanation of past actions taken (Doc. No. 2495358).
21. On September 18, 2015, Monument submitted a Supplemental Form 27 describing analytical results and outlining future actions (Doc. No. 2315519). On September 21, 2015, Staff approved the Form 27 with conditions of approval.
22. On October 5, 2015, Monument treated and tilled the area of Spill #2. On December 15, 2015, Monument submitted confirmation sampling for Spill #2, which showed that additional treatment and sampling was required.
C. Spill #3, Remediation Project #7906
23. On June 10, 2013, an underground flowline leak was discovered in the East McElmo Creek valley and associated with the Cache Unit 9 Well (Remediation Project No. 7906, Spill/Release Report No. 200381625).
24. On June 13, 2013, soil samples were collected that showed the spill/release site had levels of TPH, benzene, toluene, xylene (BTEX), and inorganics (EC, SAR, and pH) above Table 910-1 standards.
25. On June 25, 2013, Monument submitted a Form 27, Site Investigation and Remediation Workplan (Doc. No. 200383689). The Form 27 stated that Monument’s consultant would collect soil samples, analyze the samples for Table 910-1 contaminants, and treat the soil as necessary.
26. On March 18, 2015, Staff inspected the site and observed that Monument had replaced the flowline and had begun excavating the impacted material (Doc. No. 2533890). Staff concluded that further remediation was necessary to bring the site in compliance with Commission rules.
27. The May 7, 2015 Warning Letter required Monument to complete the following corrective actions by June 8, 2015: (1) collect confirmation samples and provide analytical results to COGCC, perform further remediation, backfill the excavation with clean fill dirt, and document how the soil stock pile was treated, where it was stored and disposed; (2) submit a supplemental report on Remediation Project #7906; and (3) remove the decommissioned flow line to prevent future impacts. These corrective actions were not performed by the Warning Letter’s deadline.
28. On June 23, 2015, Staff issued NOAV No. 200434664 to Monument for violations of the following Rules:
a. Rule 906.a. (Spills/Releases, General) for the failure to investigate and clean-up the impacts of Spill #3 as soon as practicable; and
b. Rule 906.c.(1) (Spills/Releases, Remediation)/Rule 909.e.(2)B (Notification of compliance with an approved workplan) for the failure to submit the supplemental report required by the Director regarding Spill #3; and
c. Rule 906.d. (Spills/Releases, Prevention) for the failure to remove the decommissioned flowline that caused Spill #3.
29. On July 16, 2015, Staff inspected the site of Spill #3 and observed that none of the corrective actions required by the Warning Letter had been completed (Doc. No. 674900686).
30. On August 5, 2015, Monument submitted a Form 27, which provided future deadlines for work to be performed but did not provide a sufficiently detailed explanation of past actions taken (Doc. No. 2495361).
31. On September 18, 2015, Monument submitted a Supplemental Form 27 describing analytical results and outlining future actions (Doc. No. 2315516). On September 21, 2015, Staff approved the Form 27 with conditions of approval.
32. On October 5, 2015, Monument excavated and treated the soils impacted by Spill #3. On December 15, 2015, Monument submitted confirmation sampling for Spill #3, which showed that additional treatment and sampling was required.
D. Spill #4, Remediation Project #9213
33. On March 18, 2015, Staff observed staining on the ground in the area of a former aboveground storage tank at the Cache Unit 9 Well Location. Monument did not report or remediate this spill/release (Doc. No. 2533890).
34. The May 7, 2015 Warning Letter required Monument to submit a Form 19, Spill/Release Report, by May 22, 2015, and a Form 27, Site Investigation and Remediation Work Plan, to address the extent of the impact and remediation plans by June 12, 2015. These corrective actions were not performed by the Warning Letter’s deadline.
35. On June 23, 2015, Staff issued NOAV No. 200434664 to Monument for violations of the following Rules:
a. Rule 906.a. (Spills/Releases, General) for the failure to investigate and clean up Spill #4 as soon as practicable;
b. Rule 906.b. (Spills/Releases, Reporting) for the failure to submit a Form 19 and report Spill #4 to COGCC, the surface owner, or local government within the time required; and
c. Rule 906.c. (Spills/Releases, Remediation) for the failure to file a Form 27, Site Investigation and Remediation Workplan, to ensure compliance with the standards in Table 910-1.
36. On June 29, 2015, Staff inspected the site of Spill #4 and observed that the historic spill was still not cleaned up (Doc. No. 674900656).
37. On July 31, 2015, Monument submitted a Form 19, Spill/Release Report, to COGCC for Spill #4 (Doc. No. 400877771).
38. On August 5, 2015, Monument submitted a Form 27, which provided future deadlines for work to be performed but did not provide an explanation of past actions taken (Doc. No. 2495342).
39. On September 18, 2015, Monument submitted a Supplemental Form 27 describing analytical results and outlining future actions (Doc. No. 2315512). On September 21, 2015, Staff approved the Form 27 with conditions of approval.
40. On October 1, 2015, Monument excavated the soils impacted by Spill #4. On December 15, 2015, Monument submitted confirmation sampling for this Spill showing compliance with Table 910-1 and Staff closed Remediation Project 9213 because it required no further action.
TOTAL VIOLATIONS AND PENALTY AMOUNT
41. Following a factual investigation and legal review of the violations alleged in the NOAVs referenced above, Staff now asserts Monument has committed the following violations:
|
Spill No. |
NOAV No. |
Rule |
Act |
Class, Impact |
Base Penalty |
Start Date |
End Date |
Days |
Total Penalty |
|
Spill #1 |
200379257 |
906.a. |
Old |
NA |
$1,000 |
2012 |
2015 |
10 |
$10,000 |
|
Spill #1 |
200434664 |
906.c.(1)/ 909.e.(2)B |
New |
Class 1, Minor |
$200 |
6/8/2015 |
8/5/2015 |
58 |
$11,600 |
|
Spill #1 |
200379257 |
906.b. |
Old |
NA |
$1,000 |
2012 |
2012 |
10 |
$10,000 |
|
Spill #1 |
200379257 |
1102.a.(1) |
Old |
NA |
$1,000 |
2012 |
2013 |
10 |
$10,000 |
|
Spill #2 |
200379270 |
906.a. |
Old |
NA |
$1,000 |
2012 |
2015 |
10 |
$10,000 |
|
Spill #2 |
200434664 |
906.c.(1)/ 909.e.(2)B |
New |
Class 1, Minor |
$200 |
6/8/2015 |
8/5/2015 |
58 |
$11,600 |
|
Spill #2 |
200379270 |
1102.a.(1) |
Old |
NA |
$1,000 |
2012 |
2013 |
10 |
$10,000 |
|
Spill #3 |
200434664 |
906.a. |
Old |
NA |
$1,000 |
2013 |
2015 |
10 |
$10,000 |
|
Spill #3 |
200434664 |
906.c.(1)/ 909.e.(2)B |
New |
Class 1, Minor |
$200 |
6/8/2015 |
8/5/2015 |
58 |
$11,600 |
|
Spill #3 |
200434664 |
906.d. |
Old |
NA |
$1,000 |
2013 |
2015 |
10 |
$10,000 |
|
Spill #4 |
200434664 |
906.a. |
Old |
NA |
$1,000 |
2013 |
2015 |
10 |
$10,000 |
|
Spill #4 |
200434664 |
906.b. |
Old |
NA |
$1,000 |
2013 |
2015 |
10 |
$10,000 |
|
Spill #4 |
200434664 |
906.c. |
New |
Class 1, Minor |
$200 |
6/12/2015 |
7/31/2015 |
49 |
$9,800 |
|
TOTAL PENALTY |
$134,600 |
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Settlement Inducement |
-25% |
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FINAL PENALTY |
$100,950 |
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42. Pursuant to Rule 523, Hearings Staff calculated a penalty of $146,025 for these violations. The penalty calculation is based on the following:
a. Violations of Rules 906.c.(1)/909.e.(2)B and 906.c. began after the effective date of HB 14-1356 (June 6, 2014);
b. Violations of Rules 906.c.(1)/909.e.(2)B and 906.c. were reclassified as Class 1, Minor, and the Enforcement Guidance and Penalty Policy Duration Matrix was not applied to those violations;
c. All remaining violations began before the effective date of HB 14-1356;
d. Settlement inducement;
e. Inability to pay;
f. No aggravating or mitigating factors; and
g. No pattern of violations or gross negligence/knowing and 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 Monument agrees to settle the NOAVs on the following terms and conditions:
a. $17,260 is due 30 days after this AOC is mailed by the Commission;
b. $5,753 is due before June 30, 2016;
c. $5,753 is due before September 30, 2016;
d. $5,753 is due before December 31, 2016;
e. $5,753 is due before March 31, 2017; and
f. $5,753 is due before June 30, 2017.
g. If Monument regains production of a Well or otherwise obtains capital, Monument will pay this penalty as soon as possible.
III. The remaining $54,925 of the penalty will be suspended pending Monument’s timely compliance with the above penalty payment schedule and all of the corrective action requirements in Paragraph V.
IV. If Monument fails to make a payment or perform a corrective action by the deadlines in this AOC, the total penalty remaining, including any suspended portion ($100,950 less any payments already made) will be due within 10 business days of notification from the Director, without any further action from the Commission or opportunity to cure. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.
VI. Payment of the penalty pursuant to this AOC does not relieve the operator from its obligations to complete corrective actions set forth in the Warning Letters, NOAVs, any applicable Remediation Projects, or as summarized in this AOC, which may be amended or modified by COGCC Staff.
RECOMMENDED this 16th day of February, 2016.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By____________________________________
Britta Beckstead, Asst. Attorney General
AGREED TO AND ACCEPTED this ______day of February, 2016.
MONUMENT GLOBAL RESOURCES INC.
By
Signature of Authorized Company Representative
Print Signatory Name and Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Monument to resolve the NOAV, the COMMISSION ORDERS:
1. Monument is found in violation of Rules 906.a., 906.b., 906.c., 906.c.(1)/909.e.(2)B, 906.d., and 1102.a.(1), as described above.
2. Monument will be assessed a penalty of $100,950. Monument will pay $46,025 of the penalty according to the following payment schedule:
a. $17,260 is due 30 days after this AOC is mailed by the Commission;
b. $5,753 is due before June 30, 2016;
c. $5,753 is due before September 30, 2016;
d. $5,753 is due before December 31, 2016;
e. $5,753 is due before March 31, 2017; and
f. $5,753 is due before June 30, 2017.
g. If Monument regains production of a Well or otherwise obtains capital, Monument will pay this penalty as soon as possible.
3. The remaining $54,925 of the penalty will be suspended pending Monument’s timely compliance with the above penalty payment schedule and all of the corrective action requirements in Paragraph 5.
4. If Monument fails to make a payment or perform a corrective action by the deadlines in this AOC, the total penalty remaining, including any suspended portion ($100,950 less any payments already made) will be due within 10 business days of notification from the Director, without any further action from the Commission or opportunity to cure. Failure to pay the penalty by the deadline is an independent violation that may be subject to additional penalties.
6. Payment of the penalty pursuant to this Order does not relieve the operator from its obligations to complete corrective actions set forth in the Warning Letters, NOAVs, any applicable Remediation Projects, or as summarized in this Order, which may be amended or modified by COGCC Staff.
7. 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 14 days prior to the pertinent compliance deadline or as soon as possible if 14 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.
8. 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 it is 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 Order.
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ENTERED this _____ day of March, 2016 as of the ___ day of March, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary