BEFORE THE OIL AND GAS CONSERVATION COMMISSION
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 NOBLE ENERGY PRODUCTION, INC., WELD
COUNTY, COLORADO |
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CAUSE NO. 1V
ORDER NO.
1V-355
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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
January 22, 2007, the Colorado Oil and Gas Conservation Commission (“COGCC” or
“Commission”) approved an Application for Permit-to-Drill (“APD”) submitted by
Noble Energy Production, Inc. (“Noble”) for the Buxman I #26-6 Well (API No.
05-123-23401) (the “Well”), located in the SE¼ NW¼ of Section 26, Township 6
North, Range 66 West, 6th P.M.
2. On April
11, 2007, Weld County Environmental Health Services received a complaint
regarding trucks dumping drilling wastes at a location in the SW¼ NE¼ of Section
33, Township 6 North, Range 66 West, 6th P.M., which at the time was
owned by Mr. Buxman. The location is adjacent to the Cache la Poudre River.
3. On April
12, 2007, Weld County Staff conducted a site inspection and observed an area of
approximately 300,000 ft2 adjacent to the river where water-based
bentonitic drilling mud had been disposed. Weld County Staff referred the
matter to COGCC Staff (the “Staff”) for investigation (COGCC Complaint No.
1175595).
4. On April
13, 2007, Staff inspected the mud disposal site. Staff identified Noble as one
of two parties responsible for the drilling mud disposal. Staff directed Noble
and Petro-Canada Resources (USA) Inc. (“Petro-Canada”), the other responsible
operator, to cease drilling mud disposal at the site and take immediate steps to
prevent drilling mud from migrating into the Cache la Poudre River. At Staff’s
direction, Noble and the other responsible operator constructed earthen berms
along portions of the river to prevent additional drilling mud from entering the
river.
5. During the
April 13, 2007 inspection, Staff collected a representative sample of the
drilling mud for organic analysis. The sample had a total petroleum hydrocarbon
(“TPH”) concentration of 115 mg/kg, which is below the concentration level found
in Table 910-1 in effect at the time of 1,000 mg/kg for soil in sensitive areas,
and a benzene concentration of 88 µg/kg, which is below the benzene
concentration level of 0.17 mg/kg2 found in Table 910-1.
6. The
landowners at the disposal site told Staff they had agreed to the disposal but
did not have a written disposal agreement with any party. The landowners also
told the Staff they did not intend to till the mud into their land, in that
trees and brush piles made much of the disposal area unsuitable for tilling.
7. On April
20, 2007, Staff conducted a second site inspection. During this inspection, the
Staff observed an area where it appeared that drilling mud may have previously
entered the river. Staff estimated that less than five gallons of waste mud had
migrated to the river. Corrective actions taken by Noble and Petro-Canada
prevented more mud from reaching the river. A surface water sample taken at the
point where the mud entered the river contained concentrations of benzene,
toluene, ethylbenzene, and xylenes (“BTEX”) below the laboratory detection
limit. Concentrations of BTEX compounds were trace or non-detect in a drilling
fluid sample taken near the point of entry had trace amounts. Acting upon the
assessment that site remediation had not yet begun, Staff instructed Noble and
Petro-Canada to immediately remove all free liquids from the disposal site for
off-site disposal.
8. On April 23,
2007, Noble notified the National Response Center of a release of drilling
fluids.
9. On April 26,
2007, Staff issued a Notice of Alleged Violation (“NOAV”) #1175598 to Noble,
which included alleged violations of the following COGCC rules:
a. Rule 324A.a.,
which requires operators to take precautions to prevent significant adverse
environmental impacts to air, water, soil, or biological resources to the extent
necessary to protect public health, safety and welfare;
b. Rule
907.a.(1), which provided at the time of the discharge that operators ensure
that exploration and production (“E&P”) waste is properly stored, handled,
transported, treated, recycled, or disposed to prevent threatened or actual
significant adverse environmental impacts to air, water, soil or biological
resources or to the extent necessary to ensure compliance with allowable
concentration levels in Table 910-1, with consideration to WQCC ground water
standards and classifications;
c. Rule
907.d.(3).B., which requires operators to dispose of water-based bentonitic
drilling fluids by acceptable methods of land application, such as production
facility construction and maintenance and lease road maintenance. Additionally,
operators are required to obtain written authorization from the surface owner
prior to land application of water-based bentonitic drilling fluids and to
retain records about the disposal.
The NOAV required
certain abatement or corrective actions to be taken by the operator by May 10,
2007. The actions required Noble to submit a Spill/Release Report Form 19 and a
Site Investigation and Remediation Workplan, Form 27 to: describe the corrective
actions previously taken by Petro-Canada, the other responsible operator; remove
the remaining drilling mud; determine the approximate thickness of the mud;
determine if shallow ground water at the disposal site was impacted; and provide
COGCC copies of the written landowner disposal authorizations.
10. On April 30,
2007, Noble submitted a Form 19 (COGCC Document No. 2057592) to the COGCC.
Noble determined that approximately 4,900 barrels of waste mud from the Well
were disposed of by third-party contractors at the site. The disposed mud
covered an area approximately 300,000 ft2 in a layer 3-to-5 inches
deep. Noble and the other responsible operator removed approximately 1,540
barrels of free liquid from the disposal area after April 20, 2007 and before
April 27, 2007.
11. On April 30,
3007, Noble submitted a Form 27 to the COGCC. Staff approved the Form 27 (COGCC
Document No. 2057593) work plan with additional conditions on May 17, 2007.
Pursuant to the approved Form 27 work plan, Noble and Petro-Canada removed the
remaining drilling mud for disposal at their respective land farms. Noble also
sampled soil and groundwater in the disposal area. Concentrations of BTEX,
total volatile hydrocarbons including gasoline range organics, total extractable
hydrocarbons and diesel range organics were all below regulatory standards in
the soil. BTEX compounds were not detected in the sampled groundwater.
12. On May 8,
2007, Noble provided Staff with copies of Authorization Forms for Land Treatment
of Water Based Betonitic Drilling Fluids between Rocky Mountain Energy Solutions
and the landowners dated April 9, 2007.
13. Rule 523.
specifies a base fine of One Thousand dollars ($1,000) for each day of violation
of Rules 324A.a., 907.a.(1), and 907.d.(3)B. Rule 523.a.(3) specifies that “the
maximum penalty for any single violation shall not exceed Ten Thousand dollars
($10,000) regardless of the number of days of such violation,” unless the
violation results in significant waste of oil and gas resources, damage to
correlative rights, or a significant adverse impact on public health, safety or
welfare or the environment.
14. For
purposes of this Administrative Order by Consent (“AOC”) only, Staff considers
each violation to have occurred for a minimum of ten days, April 11, 2007
through April 20, 2007, inclusive. Further, Staff reserves the right to present
evidence that any and all violations resulted in significant waste of oil and
gas resources, damage to correlative rights, or a significant adverse impact on
public health, safety or welfare or the environment, and, that as result of that
impact, the maximum penalty of Ten Thousand dollars ($10,000), under Rule
523.a.(3), should not apply.
15. Noble
violated Rule 324A.a. because it failed to take precautions to prevent
significant adverse environmental impacts to air, water, soil, or biological
resources to the extent necessary to protect public health, safety and welfare
by allowing water based bentonitic drilling mud to be improperly disposed of. A
base fine of Ten Thousand dollars ($10,000) has been calculated for the
violation of Rule 324A.a.
16. Noble
violated Rule 907.a.(1) because it failed to ensure that E&P waste,
including water based bentonitic drilling mud, was properly stored, handled,
transported, treated, recycled, or disposed to prevent threatened or actual
significant adverse environmental impacts to air, water, soil or biological
resources or to the extent necessary to ensure compliance with allowable
concentration levels in Table 910-1, with consideration to WQCC ground water
standards and classifications. A base fine of Ten Thousand dollars ($10,000)
has been calculated for the violation of Rule 907.a.(1).
17. Noble
violated Rule 907.d.(3)B. because it failed to dispose of water-based
bentonitic drilling fluids by acceptable methods of land application, such as
production facility construction and maintenance or lease road maintenance.
Additionally, it failed to obtain written authorization from the surface owner
prior to land application of water-based bentonitic drilling fluids and failed
to retain records about the disposal. A base fine of Ten Thousand dollars
($10,000) has been calculated for the violation of Rule 907.d.(3)B.
18. Staff have
calculated a base fine of Thirty Thousand ($30,000) dollars for those violations
brought under this AOC.
19. Staff may
reduce the fine amount if it finds mitigating circumstances as is provided for
by Rule 523.d. Based on Noble’s cooperation with COGCC, its prompt response and
thorough remediation efforts, evidence that the landowners had consented to the
disposal operation, and Noble’s post-NOAV compliance history regarding waste
drilling mud handling and disposal practices, Staff have reduced the fine amount
from Fifty Thousand ($30,000) dollars to an adjusted fine of Twenty
Thousand dollars ($20,000) for purposes of this AOC only. If the
NOAV is not resolved by consent, Staff reserve the right seek the full amount of
the base fine for each day for each violation without reduction for the factors
described above or any other facts or circumstances.
20.
Payment of the fine pursuant to this AOC does not
relieve Noble from its obligations to complete
abatement or corrective actions set forth in the NOAV, as may be amended or
modified by Staff, or the approved Form 27.
21. Noble
should execute this AOC no later than fourteen (14)
days after the date it is executed by Staff for recommendation to the Commission
for expedited approval. Fines may increase if this matter is not recommended
for expedited approval.
22.
Noble, or its successors or assigns, should be required to remain responsible
for complying with this AOC, in the event of any subsequent sale of property.
23.
Pursuant to Article IX, of the “Memorandum
of Agreement” between the Water Quality Control Division (“WQCD”) and the COGCC,
adopted February 15, 2000, Staff has conferred with WQCD enforcement staff in
determining the monetary penalty against Noble for violations of WQCC standards
for surface waters.
24. Noble agrees to the findings of this AOC only for the purpose of
expeditiously resolving the matter without a contested hearing. Notwithstanding
the above, Noble does not admit to any of the factual or legal determinations
made by the Commission herein, and fully reserves its right to contest same in
any future action or proceeding other than a proceeding to enforce this AOC.
ORDER
NOW, THEREFORE, IT IS ORDERED, that Noble Energy
Production, Inc. violated Rules 324A.a., 907.a.(1), and 907.d.(3)B., resulting
from its oil and gas operations at the Buxman I #26-6 Well, located in the SE¼
NW¼ of Section 26, Township 6 North, Range 66 West, 6th P.M., for
those acts alleged in this AOC.
IT IS FURTHER ORDERED, that Noble Energy
Production, Inc. is hereby assessed an adjusted fine of Twenty Thousand dollars
($20,000) for the Rule violations set forth above.
IT IS FURTHER ORDERED, that this Administrative
Order by Consent does not relieve the operator from undertaking and completing
abatement or corrective actions that may be required by the Notice of Alleged
Violation described in Finding No. 9, above, or any amendments or modifications
thereto specified by the Staff, or the approved Form
27.
IT IS FURTHER ORDERED, that Noble Energy
Production, Inc. shall execute this Administrative Order by Consent no later
than fourteen (14) days after the date it is executed by the Staff for
recommendation of expedited approval 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____________, 2010.
OIL AND
GAS CONSERVATION COMMISSION
OF THE
STATE OF COLORADO
By ____
Rob Willis, Enforcement Officer
Dated at Suite 801
1120 Lincoln St.
Denver,
Colorado 80203
AGREED TO AND ACCEPTED this _________day
of_______________, 2010.
NOBLE ENERGY
PRODUCTION, INC.
By
__________________________________________
Signature of Authorized Company
Representative
Noble Energy, Inc. as successor
via merger of
Noble Energy Production, Inc.
____________________________________________
Print Signatory Name
____________________________________________
Title