BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF THE EXPENDITURES OF THE ) CAUSE NO. 1E
ENVIRONMENTAL RESPONSE FUND FOR THE )
COLORADO OIL AND GAS CONSERVATION COMMISSION ) ORDER NO. 1E-3
REPORT OF THE COMMISSION
This cause came on for an emergency hearing before the Commission at 1:30 p.m. on February 25, 2005, in Suite 801, 1120 Lincoln Street, Denver, Colorado for an order to allow the expenditure of additional funds from the Environmental Response Fund. The Commission held this emergency hearing pursuant to its authority under §34-60-108(3), C.R.S. (2004).
1. On February 12, 2005 an explosion occurred in a double-wide trailer located in the SW¼ SW¼ of Section 31, Township 33 North, Range 9 West, N.M.P.M. The resident of the trailer was transported to the burn unit of Mercy Medical Center in Denver, Colorado. La Plata County emergency response and Durango Fire & Rescue Authority began an investigation of the cause of the explosion.
2. On February 14, 2005 Mr. Butch Knowlton, La Plata County, contacted Mr. Mark Weems, Colorado Oil and Gas Conservation Commission (COGCC) Field Inspector, and on that day they and representatives of various gas well and pipeline operators met at the site of the explosion to continue the investigation of the cause. It was determined that the site of the explosion is located in an area known to have thermogenic methane gas in the shallow ground water, and is approximately 150 feet south-southeast of the location of the Nick Spatter-Bryce Farm #1 Well (API 05-067-05211) and approximately 150 feet west of a pipeline operated by Red Cedar Gathering Company (Red Cedar). The Nick Spatter-Bryce Farm #1 Well (API 05-067-05211) was drilled in the late 1930’s. This well was known to have leaked gas and a memo in the well file indicates that in 1966 the well was flaring through the well marker. This memo also notes that bubbling water was observed to the west of the flaring well. Although COGCC records indicate one well at this location, records obtained from the Southern Ute Indian Tribe on February 18, 2005 show that there may have been another well (Bryce Farm #1X) at this location also. During 1994 the COGCC, using Environmental Response Fund (ERF) money, plugged what was thought to be the Nick Spatter-Bryce Farm #1 Well.
3. On February 15, 2005 COGCC’s third party contractor was onsite and collected gas samples from a place under the trailer/explosion site where gas was venting from the ground and from the headspace of the associated water well. These samples were submitted to a laboratory for compositional analysis. COGCC’s third party contractor also used a gas meter to survey the area around the Nick Spatter-Bryce Farm #1 Well, the trailer/explosion site, and the associated water well. Elevated levels of flammable gas were detected in these areas. Red Cedar personnel pressure tested its pipeline, which is located east of the explosion site. The pipeline passed this test. In addition, Red Cedar personnel conducted a preliminary gas survey of the area around the Nick Spatter-Bryce Farm #1 Well, the trailer/explosion site, the pipeline right-of-way, and land to the west of the explosion site and found a number of areas of high flammable gas concentration.
4. On February 16 and 17, 2005 the analytical results from the gas samples were received and evaluated by COGCC staff. The gas from the vent in the soil under the trailer was approximately 92 percent methane, 6 percent carbon dioxide, with trace amounts of C2 through C6 compounds, which clearly showed the gas was not propane fuel, nor processed gas, but most likely gas from the Fruitland Formation. The sample from the headspace of the water well contained too much air to achieve reliable analytical results.
5. On February 21 through 23, 2005, COGCC’s third party contractor with support from La Plata County conducted a detailed soil gas survey of the impacted area, surveyed four nearby residents, and the nearby Animas Fire District station. The soil gas survey showed that every high concentration of flammable gas occur in the vicinity of the Nick Spatter-Bryce Farm #1 Well and in the vicinity of the site of the explosion. High concentrations of flammable gas were detected in the Animas Fire District station. Flammable gas was not detected in the four houses that were surveyed; however previous samples collected from the water wells associated with the four houses and the fire station all contained high concentrations of methane.
6. The results of the soil gas survey and the previous water quality sampling indicated that to ensure the safety of the occupants of the four houses and the fire station it was necessary to install monitors that would be capable of detecting flammable gas in the dwellings and in the crawl spaces or basements of these structures. COGCC’s third party contractor was tasked to identify, purchase, and install the most appropriate equipment. The soil gas survey and the installation of the flammable gas detectors are estimated to cost approximately Fifty Thousand Dollars ($50,000)
7. COGCC hired another third party contractor to collect water samples from the water wells associated with the nearby structures and any others identified as having potential for impact for analysis of methane, stable isotopes of methane and carbon dioxide, and inorganic constituents. Sample collection was initiated on February 28, 2005 and is estimated to cost approximately Twenty Thousand Dollars ($20,000).
8. In addition, it was determined that a complete investigation of the entire affected area was necessary to determine the cause of the methane seepage, to identify mitigation measures, and to develop a detailed mitigation plan. Estimated costs for this work includes Thirty Thousand Dollars ($30,000) for geophysical surveys necessary to attempt to identify the exact locations of the two known wellbores and any others, abandoned pipelines, utility corridors, or other conduits for gas and fluid migration; Ten Thousand Dollars ($10,000) for detailed geologic mapping of the approximately 160 acres surrounding and including the trailer/explosion site; and Ninety Thousand Dollars ($90,000) for excavation and reclamation activities that will require heavy equipment to remove the approximately ten feet of Quaternary gravel terrace deposits that cover the area, obscure the bedrock, and make identification of the exact locations of the existing wellbores impossible.
9. The facts set forth in the foregoing paragraphs No. 1 through No. 8 are the reasons that the Commission finds the immediate issuance of this emergency order is imperatively necessary for the preservation of public health and safety; observance of the requirements for notice and hearing pursuant to §§24-4-105 or 34-60-108(2), C.R.S. (2004) would be contrary to the public interest.
10. During the fiscal year, which is from July 1st through June 30th, COGCC staff spends One Hundred Eighty Thousand Dollars ($180,000) of the ERF to investigate, prevent, monitor, and/or mitigate conditions that threaten to cause, or actually cause a significant adverse impact on public health, safety, or welfare, or adverse environmental impact on any air, water, soil, or biological resource. The COGCC attempts to spend the ERF budget in a systematic, efficient manner on appropriate projects throughout the fiscal year. As a result, there are sufficient funds remaining to cover ongoing work to which COGCC staff and budget are already committed, but there are not sufficient funds to cover the expenses already incurred in responding to this emergency situation nor future anticipated activities.
11. In accordance with §34-60-124(7), C.R.S., the Commission should authorize the expenditure of an additional Two Hundred Thousand Dollars ($200,000) from the ERF balance for the investigation and mitigation of significant adverse impacts to public health, safety, and welfare, and to the environment as the result of the conduct of oil and gas operations.
12. Because the likely source of the flammable gas causing this emergency situation is an orphaned gas well(s) a responsible party may not be identified; therefore, the ERF expenditures will not be reimbursed to the COGCC.
NOW, THEREFORE IT IS ORDERED, that in accordance with §34-60-124(7), C.R.S., the Colorado Oil and Gas Conservation Commission shall authorize the expenditure of an additional Two Hundred Thousand Dollars ($200,000) from the Environmental Response Fund balance for the investigation and mitigation of significant adverse impacts to public health, safety, and welfare, and to the environment as the result of the conduct of oil and gas operations.
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.
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.
ENTERED this day of March, 2005, as of February 25, 2005.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
Patricia C. Beaver, Secretary
Dated at Suite 801
1120 Lincoln St.
Denver, Colorado 80203
March 1, 2005