Noble Energy & Petro-Canada Notice of Alleged Violation - Dumping Drilling Wastes Migrating into River

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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

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, 6^th 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, 6^th 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.

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NO INSPECTIONS FOUND ON COGCC'S WEBSITE PER THIS UNIQUE API AND NO RECORD OF AN NOAV FILED.

You requested :	Inspection Information
API Number:	05-123-23401

New Inspection Search Results - No Records Found
Inspection Date	Doc #	Location ID	Insp. API #	Insp. Status	Overall Inspection Status	Overall I.R. Pass/Fail	Overall F.R. Pass/Fail	Violation (Y/N)

Search Results - No Records Found
Inspection Date	Doc #	Insp. Type	Insp. Status	PA P/F/I	Pass/Fail P/F	Violation Y/N

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There are no supporting documents indicating any formal rule violations and or associated fines. Was the Poudre River contaminated? Was the soil and or water tested for BTEX? What about downstream recipients of the water? I request the COGCC to provide all data regarding this alleged violation.Contact the COGCC's acting Director, Tom Kerr and ask him to respond: EMAIL LINK


Data compiled by: Shane Davis 
Source: COGCC 



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