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New regulations on Colorado oilfield spills keep operators honest

While more attention has been paid to oil spills in Colorado in the past year, increased regulation and sensitivity has resulted in more incidents — but much less spillage.

While the number of spills hit a 16-year high in 2014, spills of oil last year were less in volume than they have been for more than a decade, and water spills fared similarly, according to Colorado Oil and Gas Conservation Commission records.

Last year, 2,431 barrels — 102,102 gallons — of oil had been spilled, a 38 percent decrease in volume from the previous year.

Spills of produced water — what is left over from the drilling process — hit more than half a million gallons, a three-year high, but less than half of the annual spillage from 2004-11.

Altogether, the state recorded 769 spills of water and oil, a 25 percent increase in the number of incidents from 2013 and almost triple what it was in 1999, the first year of analysis reporting.

“We had a big increase from 2013 to 2014,” said Dave Kulmann, deputy director of the Colorado Oil and Gas Conservation Commission. “Going from 617 to 769, that’s pretty significant.”

But it’s all relative — the percentage of oil or water spilled compared to what is produced are in the fractions, which are now among the lowest they’ve ever been. And that comes at a time when the number of wells being drilled has set records, and new, more stringent regulations force drillers to report many more spills than they have in the past.

MORE REGULATIONS

Many operators in the field have said the regulatory environment is so tight,they’d probably have to report a spill of a cup of coffee on a drilling site.

That, of course, would have to be pretty big cup of coffee, said Dave Kullmann, deputy director of the Colorado Oil and Gas Conservation Commission.

Today, any spill of water, oil, or flowback must be reported if it equates to 1 barrel, or 42 gallons, within 24 hours. Before 2014, operators were required to report spills of 5 barrels or more, but only had to do so within 10 days.

“We drastically reduced the threshold,” Kulmann said.

The changes came about with legislation in 2013 — House Bill 1278, the only oil and gas related bill to pass that year — and sets out the new reporting requirements. Gov. John Hickenlooper signed it in May 2013, and it became effective February 2014. Through May 2, 2015, the state recorded 161 spills. Through June 2, Weld County alone recorded 148 spills, according to COGCC records. In the most recent, on June 2 at a Whiting Petroleum site in northeast Weld, 235 gallons of oil spilled when a cow kicked a valve, leaving it partially open. The affected area was vacuumed and cleaned immediately upon discovery.

“This was probably the big intent, that once a spill happens, the appropriate attention is brought to that spill to get it resolved and addressed as soon as possible,” Kulmann said. “I think it’s out there in the public record and most companies will act a lot quicker to get it cleaned up than if they didn’t have to report it.

“It is having that impact,” he said.

As a result, there have been a lot more reported incidents, which tends to both help and hinder the impression of oil and gas. On one hand, more spills that otherwise wouldn’t be reported are now on the logbooks, but on the other hand, it creates the impression that oil wells are gushing all over God’s green earth.

Transparency, as it always does, forces more explanation to residents and groups who see only the number of spills growing yet know little of the changing regulations.

“We definitely have to explain it more now than did prior to having greater transparency,” Kulmann said. “That’s just part of the game, and it’s needed.

“Overall, the process has been helped by the new rules and reporting requirements. I think it’s a plus for sure. It does require more explaining, walking people off a ledge, that it’s not a gusher. Here’s what it really means. That’s part of our goal and we need to” communicate that.

Related: Colorado commits to transparency this month

ATTACKING THE SOURCE

Though the more attention-grabbing spills — such as the Windsor flowback spill in February 2013, when 84,000 gallons of fracking water spewed for 30 hours after equipment broke down on a workover rig in west Windsor — are clearly the ones we can see, most “spills” are not apparent to those of us on the outside.

The COGCC conducted an analysis of spills in 2013 dating back four to five years and found one common trend: aging and failing flow lines.

“The biggest spills were attributed to the production phase of operations, not drilling and completion, and a lot had to deal with older equipment, flow lines being the biggest problem,” Kulmann said.

The analysis showed that 47 percent of spills were related to flow lines. That is the pipeline that’s buried beneath the ground shipping liquids from the wells to separators to storage tanks.

With the Wattenberg Field being more than 40 years old, hundreds if not thousands of wells are a good 20 to 40 years old. Equipment is bound to age and fail.

That’s why the COGCC had an existing rule, 1101E, for operators to pressure-test flow lines annually and retain records for three years.

“We did a guidance document to clarify the rule and make sure operators understand that,” Kulmann said. “It seems clear when you read it, but there’s ambiguity in the rule, so we tried to clarify that, and what that means and what we as an agency expect.”

Kulmann said there is some leniency built into the rule. Pressure testing every flow line every year may not be best answer for some operators, he said, especially for new facilities with automation.

“Some operators installed (their equipment) with a continuous, real-time monitoring program. If there’s a drop in pressure, an alert gets sent out. If they have a system like that in place, adding a requirement that they pressure test every year, doesn’t seem like the best solution.”

The COGCC analysis, however, prompted the COGCC to hire a team of three to conduct audits of operators’ integrity testing in the field.

“We make sure operators are doing appropriate pressure testing that is required, and do checks ourselves to focus on flow lines and some of the equipment.”

The program is still being developed, Kulmann said, but its overall goal is to ensure such testing is done, and any issues be cleared up.

“We’re going to start with paper audits,” Kulmann said. “If you have flow lines, show us documentation that you preformed a technical pressure test. Once we have our team up and running — and that’s likely in 2016 — there will be times where we go on location with operators and be a part of the pressure test.”

The COGCC and the Department of Natural Resources have already dealt with emissions issues from oil storage tanks, with new requirements throughout the fields. In fact, the regulatory agencies created some of the strictest rules in the nation, requiring operators to capture up to 95 percent of emissions. Soon, the agencies will roll out a mobile emissions tester, one of many items approved by the legislature based on the Gov. John Hickenlooper’s oil and gas task force recommendations this past winter.

Now, the agency will focus on the inner workings of the field.

“Flow lines will be a big focus item of this agency going forward,” Kulmann said. “That will be the biggest thing operators need to be aware of — anything they can do to prevent spills.”

REMEDIATION

As spills occur, however, whatever can’t be recovered by a company, typically goes to the local landfills.

“There’s this misunderstanding out there that oil and gas companies have an exemption for waste, that they don’t have to follow any rules, but it’s all very regulated,” said John Axelson, east environmental supervisor with the Colorado Oil and Gas Conservation Commission.

Companies in violation can receive daily fines or lose their operation permits, according to the COGCC. The commission must provide a written notice called a Notice of Alleged Violation to alleged violators.

Through October 2014, fewer than 10 violations related to waste were issued in Weld County, according to the COGCC. The agency issued 120 NOAVs throughout Colorado through October, but that number includes all types of violations, not just those pertaining to waste. From those violations, $1.4 million was collected in fines and penalties. That money goes into the state of Colorado’s general budget, COGCC said.

Weld County leads Colorado in the number of active wells, with more than double that of the next largest producing county, Garfield. Consequently, it has the most spills.

The COGCC reports Weld County has 22,411 active wells, comprising almost half of all active wells in the state. Coming in second is Garfield County with 11,001 active wells.

“There’s this misunderstanding out there that oil and gas companies have an exemption for waste, that they don’t have to follow any rules, but it’s all very regulated.– john axelson, east environmental supervisor with the Colorado Oil and Gas Conservation Commission

This article was written by Sharon Dunn from Greeley Tribune, Colo. and was legally licensed through the NewsCred publisher network.

One comment

  1. Now only if we could keep the government honest.