Harsh words, fine for EnCana
A state commission had harsh words for EnCana Oil & Gas Tuesday but declined to give it a harsher penalty than recommended for drilling errors that caused natural gas to surface south of Silt this spring. The Colorado Oil and Gas Conservation Commission, concluding a two-day hearing at the Ramada Inn in Glenwood Springs, went along with a recommendation from its staff that it approve a $371,200 fine against EnCana.The fine, while the most ever levied for a single incident of drilling violations, was less than Garfield County had requested. County Attorney Don DeFord had asked that the state slap a $464,000 fine on EnCana, the maximum allowable for the nine violations it committed in connection with the seep.COGCC board members joined DeFord and others in sharply criticizing EnCana’s actions that led to the seep.”In my opinion it was through sheer unadulterated incompetence that we are here today and over the last few days to address this problem,” COGCC commissioner John Ashby said, addressing EnCana representatives. “I’m very upset about that. I think it reflects poorly on the industry and on your company in particular.”Said fellow commissioner Tom Ann Casey, “It’s not a problem with the geology, it’s a problem of some people not following the rules.”The seep occurred when EnCana encountered difficulties sealing off around the Schwartz 2-15B well casing in the West Divide Creek area, allowing gas to escape through a geological fault and to surface in the creek. The seep caused the creek and groundwater to be contaminated with cancer-causing benzene.Under a pretrial agreement between EnCana and COGCC staff, but subject to the COGCC board’s review, the company admitted to nine violations arising from the incident and endorsed the recommended fine.DeFord argued that the violations were of an aggravated nature that warranted imposing the maximum fine on EnCana.He said it’s part of a pattern of continuing local violations by EnCana that can’t be justified simply by the amount of gas development it does in the area.
“Yes, they are an active developer in Garfield County, and yes, they are an active violator in Garfield County,” DeFord said.He said EnCana both knowingly and recklessly violated state rules. The county wanted the company to be sent a message that it will be held accountable, “and that the citizens of this county need to be protected.”Carolyn Lamb, an attorney with the Western Colorado Congress citizens group, shared DeFord’s views.”Without sending a strong message to EnCana we fear we will end up here again in short order,” she said.But Carol Harmon, an attorney representing COGCC’s staff, said the $371,200 fine already took into account aggravated circumstances resulting from EnCana’s actions.State law, while allowing fines of up to $1,000 per day per violation, normally caps the fine per violation at $10,000, which would have been $90,000 in EnCana’s case. That amount could be exceeded only when aggravating circumstances exist, she said.EnCana’s violations reflected aggravated circumstances, and were calculated based on violations that lasted from 36 to 55 days each.The state reduced EnCana’s fine from the maximum allowable under aggravated circumstances because of its prompt response to the seep once it was discovered, and continuing cooperation with the state in providing drinking water, monitoring groundwater and taking other remediation measures. The county also asked the state to order EnCana to pay for someone to work under the supervision of the COGCC as it continues its remediation efforts. The COGCC board did not specifically provide for that in its decision, though commissioners expressed interest in making sure adequate staffing exists to oversee remediation.The county and WCC also pressed for expanded testing in the area surrounding the seep. COGCC representatives said the agency will have latitude within the agreement reached with EnCana to request more groundwater monitoring and other remediation measures as required.Anthony Gorody, a consulting geologist for EnCana, agreed with the idea of expanding groundwater monitoring, suggesting it be increased to a nine-square-mile area. He also concurred with the general consensus that the extent of the seep hasn’t been fully determined. But he believes the affected area most likely will be limited to a narrow corridor between the Schwartz well and Divide Creek, and doesn’t think there’s any risk to residents outside a two-mile area, where commissioners have ordered a continuing moratorium on drilling until COGCC staff believes it is safe.
Gorody believes state estimates that the well released 115 million cubic feet of gas are overstated. Otherwise, he said, a lot more gas would have been escaping out of the seep on West Divide Creek each day.At the same time, the existence of that exit point for the gas reduces the likelihood of it seeking other paths of escape to the surface, he said. “Much of the danger associated with the seep may be past,” he said.He said no immediate threat to health and safety is posed in areas being directly monitored. The seep hasn’t impacted water well quality or soil gases at residences, he said.”Monitoring is being continued and people should feel safe that their air and water where they are living is not at risk,” he said.But several COGCC commissioners expressed concern over whether EnCana has learned the right lessons from the gas seep, which commissioner Ashby said resulted from “worse than an oversight.”They grilled an EnCana representative on the management practices that allowed the rules violations to occur, on whether adequate reviews of what went wrong have taken place within the company, and on whether EnCana’s reliance on contractor help might contribute to the chances of more such problems occurring.Commissioner J. Thomas Reagan said he was worried whether EnCana is paying full attention to rules, and warned that “the commission will be much less tolerant of future abuses.”At the same time, commissioners sought to assure residents who fear that the commission and the COGCC staff represent the interest of the industry and not the public at large.”I just challenge you to come to the hearings, talk to the commissioners … you will see that that’s not the case,” Casey said.Fellow commissioner Lynn Shook added that he thinks the EnCana case “very well demonstrates why this commission needs at least several members on it who have technical backgrounds.”
Critics have said the law needs to be changed to reduce industry-related representation on the board due to potential conflicts of interest. But Shook, who has no industry background, said technical insight is important to the board.Dick Morgan, a landowner near the gas seep, believes commissioners’ blanket approval of the agreement reached earlier with EnCana didn’t strengthen their argument that they are acting independently of industry interests.”They reinforced the fact that it was already decided before we spent two days listening to it,” he said.Garfield County commissioner Trési Houpt was disappointed the penalty wasn’t higher. But she is glad that the commission approved using the fine money for a local public project, possibly to address impacts from drilling, rather than having it go into general state coffers.EnCana is accepting suggestions for those projects by e-mail at email@example.com, or by fax at 720-956-3671.EnCana spokesman Walt Lowry said the company appreciates the involvement of everyone who participated in this week’s hearings and helped to get the facts out about the seep and identify solutions. He said EnCana will use the criticism voiced Tuesday in a constructive manner.”We appreciate their comments. We certainly take their comments to heart,” he said.EnCana estimates it already has spent $1 million in responding to the seep and will spend another $1 million in continuing remediation efforts.Contact Dennis Webb: 945-8515, ext. firstname.lastname@example.org
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