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 DIVERSIFIED ENERGY, LLC, MOFFAT COUNTY, COLORADO |
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CAUSE NO. 1V DOCKET NO. 160100002
CORRECTED |
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. Diversified Energy, LLC (“Diversified”) (Operator No. 10428) is the operator of record of the A.P. Urie 1 well (API No. 05-081-05284) (“Well”) located in Moffat County, Colorado.
2. On July 20, 2015, Colorado Oil and Gas Conservation (“COGCC”) Staff received an anonymous complaint that an oil spill had occurred at the Well. (Doc. No. 200435942)
3. On July 20, 2015, Staff inspected the site and observed oil-stained soil and pooling outside secondary containment where the berm had been breached and that the spill had contacted a man made containment ditch. (Doc. No. 673402259)
4. On July 20, 2015, Staff contacted Diversified regarding this spill. (Doc. No 673402259)
5. On July 20, 2015, Diversified emailed a Form 19 (Initial Spill/Release Report) to Staff reporting that the spill had occurred on July 17, 2015. Diversified uploaded this instrument to e-forms on July 21, 2015. (Doc. No. 400871277) Diversified calculated that the amount of fluid that escaped secondary containment was approximately 0.9 barrels, and appeared to be oil. The area around the spill is best described as high plains prairie, and is not near any stream or river or any known source of groundwater, nor is it near any residence or other structure.
6. On July 21, 2015, Diversified repaired the secondary containment berm, removed hydrocarbon liquids from the surface, and scraped some of the contaminated soil from the spill path and placed it inside secondary containment.
7. On August 3, 2015, COGCC Staff received a Form 19 (Subsequent Spill/Release Report) from Diversified informing Staff that the above work had been completed. (Doc No. 40087504) According to Diversified, this instrument was submitted on July 31, 2015, but there were apparent technical issues with the submission and the Commission did not receive the Form 19 until August 3, 2015.
8. On September 1, 2015, in response to an inquiry from Staff, Diversified informed Staff by email that clean-up work had been completed at the Well and inquired if there was anything more that needed to be done. (Doc No. 2315354)
9. On September 2, 2015, Staff inspected the Well and took soil samples from the path of the spill. Analysis of these samples demonstrated total petroleum hydrocarbon concentration levels of 24,600 mg/kg, which is 49-times the Table 910-1 acceptable limit of 500 mg/kg. (Doc. No. 2315601)
10. On October 16, 2015, Commission Staff issued a Notice of Alleged Violation (“NOAV”) (No. 200437756) to Diversified citing a violation of the following COGCC Rules of Practice and Procedure, 2 CCR 404-1 (“Rule” or “Rules”):
a. Rule 605.a.(4) (Oil and Gas Facilities, Secondary Containment)
b. Rule 906 (Spills and Releases)
11. On October 22, 2015, Diversified submitted a Form 27 (Site Investigation and Remediation Workplan) setting forth plans to remove any remaining contaminated soil and remediate the site. This plan was approved by Staff with additional conditions of approval on November 3, 2015. (Doc. No. 2144623)
12. On October 22 and 23, 2015, Diversified, through its contractors, removed additional oily soils from the site and disposed of the waste at an approved disposal facility.
13. On December 19, 2015, Diversified took final soil samples at the site in accordance with Rule 910.b.(3) and had analysis conducted on these samples. The results of this analysis demonstrated that soils on site comply with Table 910-1 standards. (Doc. No. 400961065)
14. On January 15, 2016, Staff closed the Urie remediation project (REM No. 9332).
15. Following factual investigation and legal review of the violations alleged in the NOAV, Hearing Staff now asserts Diversified has committed the following violations:
a. One four-day violation of Rule 605.a.(4) (Oil and Gas Facilities, Secondary Containment) for failing to maintain an adequate berm around the tank battery; and
b. One 92-day violation of Rule 906 (Spills and Releases) for failing to timely remediate the site to COGCC Table 910-1 standards.
16. Pursuant to Rule 523 and the Commission’s Enforcement and Penalty Policy, Hearings Staff calculated a penalty of $65,700 for this violation. The penalty calculation is based on the following:
|
Rule No. |
Days of Violation |
Start Date |
End Date |
Class |
Impact |
Daily Base Penalty |
Total Penalty |
|
605.a.(4) |
4 |
7/17/2015 |
7/21/2015 |
2 |
Moderate |
$5,000 |
$20,000 |
|
906 |
92 |
7/22/2015 |
10/22/2015 |
2 |
Minor |
$2,500 |
$45,700 |
|
|
TOTAL: |
$65,700 |
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a. Current versions of § 34-60-121 C.R.S. and Rule 523;
b. Application of the Duration Matrix from the COGCC Enforcement Guidance and Penalty Policy January 2015 (corrected 4/8/2015);
c. Rule 605.a.(4);
i. Class 2;
ii. Moderate impact;
iii. Start date of violation is July 17, 2015, being the reported date of the spill;
iv. End date of violation is date secondary containment was brought into compliance with Rule 605.a.(4), being July 21, 2015;
v. Daily base penalty of $5,000;
d. Rule 906;
i. Class 2;
ii. Minor impact;
iii. Start date is day after initial spill remediation was completed, being July 22, 2015;
iv. End date of violation is day final remediation was started, being October 22, 2015;
v. Daily base penalty of $2,500;
e. No aggravating factors;
f. No mitigating factors;
g. No pattern of violation; and
h. No gross negligence or knowing and willful misconduct.
AGREEMENT
NOW, THEREFORE, based on the Findings and pursuant to Rule 522.e.(1).A. and the Commission’s Enforcement and Penalty Policy, the Director proposes and Diversified Energy, LLC agrees to settle the NOAV on the following terms and conditions:
I. Diversified is found in violation of Rules 605.a.(4) and 906.
II. Diversified will be assessed a total penalty of $65,700 of which $55,700 will be suspended pending Diversified’s completion of those requirements set forth in the Compliance Plan contained in Appendix A to this Order. Diversified will pay the remaining $10,000 in installments as follows:
a. Diversified will pay $2,000 within 30 days after this approved AOC is mailed by the Commission.
b. $2,000 due on July 15, 2016;
c. $2,000 due on October 15, 2016;
d. $2,000 due on January 15, 2017; and
e. $2,000 due on March 7, 2017.
III. In the event Diversified defaults under this agreement, the total penalty remaining, including any suspended portion ($65,700 less any payments already made), will be due, and received by the Commission, no later than 60 business days after a written demand for payment by the Director, which will be served pursuant to Rule 521 at Diversified’s address of record, on file with the COGCC pursuant to Rule 302.
RECOMMENDED this 18th day of February, 2016.
OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
By
David A. Beckstrom, Enforcement Officer
AGREED TO AND ACCEPTED this 18th day of February, 2016.
DIVERSIFIED ENERGY, LLC
By
Signature of Authorized Company Representative
Print Signatory Name
Title
ORDER
HAVING CONSIDERED the Agreement between the Director and Diversified Energy, LLC to resolve the NOAV, the COMMISSION ORDERS:
1. Diversified is found in violation of Rules 605.a.(4) and 906.
2. Diversified will be assessed a total penalty of $65,700 of which $55,700 will be suspended pending Diversified’s completion of those requirements set forth in the Compliance Plan contained in Appendix A to this Order. Diversified will pay the remaining $10,000 in installments as follows:
a. $2,000 due within 30 days after this approved AOC is mailed by the Commission.
b. $2,000 due on July 15, 2016;
c. $2,000 due on October 15, 2016;
d. $2,000 due on January 15, 2017; and
e. $2,000 due on March 7, 2017.
3. In the event Diversified defaults under this agreement, the total penalty remaining, including any suspended portion ($65,700 less any payments already made), will be due, and received by the Commission, no later than 60 business days after a written demand for payment by the Director, which will be served pursuant to Rule 521 at Diversified’s address of record, on file with the COGCC pursuant to Rule 302.
4. 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 35 days prior to the pertinent compliance deadline or as soon as possible if 35 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.
5. Entry of this Order constitutes final agency action for purposes of judicial review as of the date this order is mailed by the Commission. For all other purposes, this Order is effective as of the date of approval by the Commission.
6. The Commission expressly reserves its right after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
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ENTERED this 9th day of March, 2016 as of the 7th day of March, 2016.
CORRECTED this ____ day of April, 2016 as of the 7th day of March, 2016.
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
By
Julie Murphy, Secretary
Appendix A
Compliance Plan
|
Facility |
Subject |
Task |
Deadline |
|
A.P. Urie 1 API 05-081-05284 |
Pit Closure |
Diversified will prepare and submit a Form 27 (Site Investigation Workplan) setting forth a plan to conduct the necessary site investigation in order to properly close the pit at the Urie Location (Location No. 312771) as described in Inspection No. 00657317 (Facility No. 116613) (“Urie Pit”). |
3/30/2016 |
|
|
|
Diversified will complete the Site Investigation Workplan to include all sampling and analysis at the Urie Pit. |
5/15/2016 |
|
|
|
Upon completion of the Site Investigation Workplan, Diversified will confer with COGCC Staff no later than 6/15/2016 to determine whether the presumptive pit closure completion date of 9/30/2016 is reasonable in light of the results of the Site Investigation. |
6/15/2016 |
|
|
|
Based on the Site Investigation Workplan, Diversified shall prepare a Remediation Workplan and submit this in a Form 27 (Supplemental). |
7/15/2016 or sooner |
|
|
|
Diversified will complete the Remediation Workplan and complete required actions defined in the approved supplemental Form 27 in order to properly close the Urie Pit in accordance with the requirements of Rules 905, 909, and 1003.
Note: The presumptive completion date of 9/30/2016 can be modified by COGCC Staff upon review of the results of the Site Investigation, as set forth above. |
9/30/2016 (See Note) |
|
|
Weed Control |
Diversified will remove all weeds from the Urie Location and implement weed control measures to comply with Rules 603.f. and 1003. |
4/15/2016 |
|
|
|
Diversified will monitor and control all weeds from the Urie Location in order to comply with Rules 603.f. and 1003. |
8/31/2016 |
|
|
|
Diversified will maintain a continued weed control program at the Urie Location in accordance with Rules 603.f. and 1003.f. for a period of two years, if Diversified remains the operator of record of this Well. |
3/7/2018 |