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-287
DELTA PETROLEUM CORPORATION, )
WASHINGTON COUNTY, COLORADO )
1. In May of 1985, the Church #4 Well located in the NW¼ NE¼ of Section 25, Township 3 South, Range 51 West, 6th P.M. was drilled and completed by Central Operating, Inc.
2. On May 24, 1985, the Colorado Oil and Gas Conservation Commission (“COGCC”) approved the Application for Permit to Use Earthen Pit, Form 15 submitted by Central Operating, Inc.
3. On November 12, 2003, the COGCC approved the Certification of Clearance and/or Change of Operator, Form 10 from Central Operating, Inc. to Delta Petroleum Corporation (“Delta”) with an effective date of November 1, 2003.
4. On February 3, 2005, COGCC staff conducted a field inspection of the Church #4 Well and associated tank battery facility. Produced water was observed being transported from the Hickert lease via truck and unloaded into the Church #4 earthen pit. The Hickert #41C-18349 tank battery is located in the NE¼ NE¼ of Section 18, Township 3 South, Range 49 West, 6th P.M.
5. On February 4, 2005, COGCC environmental staff placed a telephone call and notified Delta to immediately cease the transfer of produced water from the Hickert lease to the Church #4 earthen pit.
6. On February 8, 2005, a Notice of Alleged Violation (“NOAV”) was issued to Delta. The NOAV cited violations of Rule 704., operating a centralized E&P waste management facility without the required financial assurance; Rule 907.a.(1), 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 907.b., off-site disposal of E&P waste at a facility not authorized by the COGCC; Rule 907.c., disposing of produced water in an unauthorized manner; and Rule 908., operating a centralized E&P waste management facility without COGCC approval. Corrective action included the submittal of all water hauling tickets from off-site sources of produced water. Corrective action also included the submittal of short term and long term disposal plans for produced water from the Hickert, Daisy, and Yakutat leases.
7. Per return receipt, the NOAV was accepted by Delta on February 14, 2005.
8. On February 28, 2005, the required submittals as set forth in the NOAV were received by the COGCC. According to information provided, between December 2, 2004 and February 4, 2005, over 17,000 barrels of produced water was transferred from various facilities on the Hickert lease to the Church #4 earthen pit. Additionally, approximately 180 barrels of gel water and 80 barrels of produced water were transferred from the Daisy lease to the Church #4 earthen pit. The Daisy lease facilities are located in Sections 29 and 30, Township 3 South, Range 49 West, 6th P.M. Also, 60 barrels of produced water and 60 barrels of oil and water were transferred from the Christianson tank battery to the Church #4 earthen pit. The Christianson tank battery is located in the NE¼ NW¼ of Section 12, Township 3 South, Range 50 West, 6th P.M.
9. Based on the above findings, COGCC staff recommends that Delta Petroleum Corporation should be found in violation of Rules 907.a.(1), 907.b., 907.c., and 908. 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; for off-site disposal of E&P waste at a facility not authorized by the COGSS; for disposing of produced water in an unauthorized manner; and for operating a centralized E&P waste management facility without COGCC approval.
10. Rule 523. specifies a base fine of One Thousand dollars ($1,000.00) per day for each violation of Rules 907.a.(1), 907.b., 907.c., and 908., and a base fine for violations of the Oil and Gas Conservation Act shall be determined by the Commission at its discretion.
11. A monetary penalty of Four Thousand dollars ($4,000.00) should be assessed against Delta Petroleum Corporation, in accordance with Rule 523.a., for violation of Rules 907.a.(1), 907.b., 907.c., and 908.
12. The following mitigating factors were considered in reducing the recommended fine amount by One Thousand dollars ($1,000.00) per mitigating factor, for a total of Two Thousand dollars ($2,000.00) fine reduction: Rules 523.d.(2), the violator demonstrated prompt, effective and prudent response to the violation, and Rule 523.d.(3), the violator cooperated with the Commission with respect to the violation.
NOW, THEREFORE IT IS ORDERED, that Delta Petroleum Corporation shall be found in violation of Rules 907.a.(1), 907.b., 907.c., and 908. for off-site disposal of E&P waste at a facility not authorized by the COGCC; for failure to ensure that E&P waste us properly stored, handled, transported, treated, recycled or disposed to prevent threatened or actual significant adverse environmental impacts; for disposing of produced water in an unauthorized manner; and for operating a centralized E&P waste management facility without COGCC approval at the Church #4 tank battery facility located in the NW¼ NE¼ of Section 25, Township 3 South, Range 51 West, 6th P.M.
IT IS FURTHER ORD=ERED, that Delta Petroleum Corporation shall be assessed a total fine of Two Thousand dollars ($2,000.00) for the violations, payable within thirty (30) days of the date the 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 be come 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 April, 2005.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By___________________________________
Morris Bell, Hearing Officer
Dated at Suite 801
1120 Lincoln St.
Denver, Colorado 80203
April 7, 2005
AGREED TO AND ACCEPTED this ______ day of April, 2005.
DELTA PETROLEUM CORPORATION
By__________________________________________
Title_________________________________________