BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                                OF THE STATE OF COLORADO

 

IN THE MATTER OF ALLEGED VIOLATIONS OF THE RULES              )                    CAUSE NO. 1V

AND REGULATIONS OF THE COLORADO OIL AND GAS                    )

CONSERVATION COMMISSION BY PEASE OIL & GAS COMPANY     )                    DOCKET NO. 0401-OV-04

(a.k.a. REPUBLIC RESOURCES INC.), LOGAN COUNTY,                     )

COLORADO                                                                                          )                   

                                                                                                                                                           

                                                NOTICE OF ADMINISTRATIVE ORDER BY CONSENT

 

TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

 

            On March 22, 1974, Colorado Oil and Gas Conservation Commission (“COGCC”) staff approved the Application for Permit to Use Earthen Pit, Form 15 submitted by A.T. Skaer (“Skaer”) for the Whittier “A” lease located in the E½ NE¼ of Section 21, Township 9 North, Range 53 West, 6th P.M.  On August 13, 1975, the Colorado Department of Health (“DOH”) issued Permit #CO-0001929 for Authorization to Discharge under the National Pollutant Discharge Elimination System (“NPDES”) from the subject facility to an unnamed tributary to North Sterling Reservoir.  The permit and the authorization to discharge expired on June 30, 1978.  However, subsequent correspondence from Skaer indicated that the NPDES permit requirements were not fulfilled during 1976 and the permit was likely suspended prior to the expiration date.

 

            On May 8, 1989, COGCC staff conducted a field inspection of the facility and observed the discharge of produced water from the pits onto adjacent cropland and into a drainage that flows north to the North Sterling Reservoir. On May 9, 1989, COGCC staff sent a letter notifying Skaer to cease the discharge of produced water from the pits without appropriate authorization. On June 29, 1989, the COGCC received a complaint from Mr. Rick Snook with the Logan County Planning Department regarding the discharge of produced water from the pits.  The Colorado Division of Wildlife and the Colorado State Board of Land Commissioners were also notified. On June 30, 1989, COGCC staff sent a letter directing Skaer to shut down any production until such time as injection into a well or increased pit capacity has been approved.

 

            Effective March 1, 1994, Pease Oil & Gas Company (“Pease”) became the operator of the subject lease.  COGCC staff approved the Certification of Clearance and/or Change of Operator, Form 10 on October 18, 1994.  Historic aerial photographic coverage of the facility from June of 1994 shows that the pits were full and therefore being utilized by Pease for the storage and/or disposal of produced water.  Effective November 1, 1998, Coral Production Corporation (“Coral”) became the operator of the subject lease.  COGCC staff approved the Certification of Clearance and/or Change of Operator, Form 10 on January 11, 1999.

 

            On June 7, 1999, COGCC staff received a letter from Pease dated June 3, 1999 indicating that the pits at the Whittier “A” facility were closed and reclaimed prior to December 31, 1997.  Effective April 1, 2000, Timka Resources Ltd. (“Timka”) became the operator of the subject lease.  COGCC staff approved the Certification of Clearance and/or Change of Operator, Form 10 on January 29, 2001.  On July 16, 2001, COGCC staff received notification of a corporate name change from Pease Oil & Gas Company to Republic Resources Inc. (“Republic Resources”) effective July 11, 2001. 

 

            On September 20, 2002, COGCC environmental staff conducted a field inspection of the subject lease.  A large area of produced water impacted soils extended from the former pit location north to the county road.  A representative soil sample was collected and submitted for analyses.  Laboratory results indicated a Sodium Adsorption Ratio (SAR) at 250, Electrical Conductivity (EC) at 16.9 millihos per centimeter (mmhos/cm), and a pH at 9.48.  These soil conditions significantly exceed the COGCC Allowable Concentrations and Levels for Inorganics in Soils in Table 910-1 (SAR at 12, EC at 4 mmhos/cm, and pH at 7-9). 

 

            On February 18, 2003, a Notice of Alleged Violation (“NOAV”) was issued to Republic Resources for incomplete reclamation of the pit and produced water impacted soils.  The NOAV cited Rule 324A.a., for failure to prevent significant adverse environmental impacts to air, water, soil, or biological resources and to prevent the unauthorized discharge or disposal of E&P waste; Rule 907.a.(1), for failure to ensure that E&P waste is properly stored, handled, transported, treated, recycled or disposed to prevent threatened or actual significant adverse environmental impacts; Rule 910.a., for exceeding the allowable concentrations for soil in Table 910-1; and Rule 1004.b.,  for incomplete final reclamation of the production pits.  Corrective action included the requirement for Republic Resources to submit a Site Investigation and Remediation Workplan, Form 27, by March 31, 2003. 

 

            On March 21, 2003, COGCC staff received a written request from Republic Resources for an extension for the submittal of the Form 27 from March 31, 2003 to May 15, 2003.  The extension was granted by COGCC staff on March 24, 2003.  On May 8, 2003, the COGCC received a facsimile of correspondence from Republic Resources dated May 7, 2003. The letter stated that Republic Resources is out of funds and is unable to do any additional remediation and/or reclamation at this site.  The letter suggests that remedies be pursued that may be available under the bond for cleanup of the site.  Republic Resources did not submit the required Site Investigation and Remediation Workplan, Form 27, by the extended deadline of May 15, 2003.  COGCC staff has estimated the remediation and reclamation costs for this site at approximately Thirty Thousand dollars ($30,000).  Republic Resources has stated that it has no funds available for the remediation and reclamation of the site. Failure to perform the required remediation and reclamation of the site is a continuing violation of Rules 324A.a., 910.a., and 1004. by Republic Resources.  Republic Resources does not have the financial resources to complete the work required to bring the site into compliance.

 

            On October 3, 2003, COGCC staff issued an Administrative Order by Consent (“AOC”) to Pease Oil & Gas Company, for the violation of COGCC Rules 324A.a., 910.a., and 1004 for exceeding the COGCC Allowable Concentrations for Inorganics in Soil in Table 910-1 and for failure to complete the remediation and reclamation of produced water impacted soils at the Whittier “A” lease located in the E½ NE¼ of Section 21, Township 9 North, Range 53 West, 6th P.M.  On November 10, 2003, Pease Oil & Gas Company agreed to and accepted the AOC, including the fine of One Thousand Dollars ($1,000) and a claim on the Pease Oil & Gas Company’s blanket plugging bond to remediate the site to meet the COGCC Allowable Concentrations and Levels for Inorganics in Soil in Table 910-1 and to reclaim the site to cropland.

 

NOTICE IS HEREBY GIVEN, that the Oil and Gas Conservation Commission of the State of Colorado, pursuant to the above, has scheduled the above-entitled matter for hearing on:

                 

Date:                            Monday, January 5, 2004

                                   

Time:                           10:00 a.m.

 

Place:                          Suite 801, The Chancery Building

                                    1120 Lincoln Street

                                    Denver, CO 80203

                       

            In accordance with the Americans with Disabilities Act, if any party requires special accommodations for this hearing as a result of a disability, please contact Audra Serlet at (303) 894-2100, extension 114, prior to the hearing and arrangements will be made.

 

Pursuant to said hearing in the above-entitled matter at the time and place aforesaid, or at any adjourned meeting, the Commission will enter such orders as it deems appropriate and necessary to protect public health, safety and welfare and to prevent the waste of oil and gas, either or both, in the operations of said field, and carry out the purposes of the statute.

 

In accordance with Rule 509., any interested party desiring to protest or to intervene should file with the Commission a written protest or a notice to intervene no later than December 22, 2003 briefly stating the basis of the protest or intervention.  Such interested party shall, at the same time, serve a copy of the protest or notice to intervene to the person filing the application.  An original and nine (9) copies shall be filed with the Commission.

 

      IN THE NAME OF THE STATE OF COLORADO

 

                                                                  OIL AND GAS CONSERVATION COMMISSION

                               OF THE STATE OF COLORADO

 

 

 

                        By_________________________________

Dated at Suite 801                                                              Patricia C. Beaver, Secretary

1120 Lincoln Street

Denver, Colorado, 80203

December 5, 2003