Colorado regulators find leaking methane and VOC violations at 10 companies, Encana included

Colo. regulators find methane violations at 10 companies by Gayathri Vaidyanathan, June 22, 2016, E & E News

Colorado regulators have issued warnings to 10 energy companies that operate in the Denver-Julesburg Basin for emitting methane, a potent greenhouse gas, and volatile organic compounds (VOCs) that contribute to ground-level ozone or smog.

Methane and VOCs are stringently regulated in Colorado, which suffers from a chronic ozone problem. Smog can trigger asthma and respiratory problems in some people.

“That’s one reason why stringent oil and gas controls are so important in our ozone nonattainment area,” said William Allison, director of the Air Pollution Control Division at the Colorado Department of Public Health and Environment.

Inspectors recorded violations at 152 well pads between 2014 and 2015.

The officials did not need special equipment to make their cases; the leaks were so large that they could smell the gases and hear the hiss of escape, according to letters issued to the companies by the Air Pollution Control Division.

PDC Energy Inc., a Denver-based energy company, operated 43 percent of the offending well pads. The company did not respond to ClimateWire’s request for comment by deadline.

The repeat violations were recorded in a state that arguably has the nation’s toughest methane rules. Colorado has been regulating VOC emissions from the oil and gas industry since 2007 and methane since February 2014. The state served as a model for federal regulators when they issued a nationwide methane rule this year (ClimateWire, May 13).

The oil and gas industry has argued that federal regulations are unnecessary and that companies can police themselves. But the Colorado violations show the fault in this argument, said Seth Gladstone, deputy communications director at Food & Water Watch, an anti-fossil-fuel environmental group.

“We have seen evidence of this [leakage] not just in Colorado, but in Pennsylvania and Texas and anywhere where large-scale fracking for oil and gas is taking place around the country,” Gladstone said. “Despite what regulations may or may not be in place, in any particular state or locality, this is a process that is inherently polluting and cannot be regulated safely.”

Trade group says companies ‘getting up to speed’ on regs

The Environmental Defense Fund (EDF), an environmental group that supports the safe extraction of natural gas, said the violations show how important enforcement is.

“We need the backstop of regulatory enforcement to make sure all of the state’s oil and gas operators are inspecting their equipment regularly and fixing leaks when they find them,” said Dan Grossman, national director of state programs at EDF. “As we can see from these letters, voluntary programs by themselves are simply insufficient to address the pollution and climate problems caused by methane emissions from the oil and gas sector.”

Colorado’s air chief Allison said the state’s methane rules and enforcement have been “extremely effective and successful.”

Since the rules came on the books, the number of facilities with leaks on the Denver-Julesburg Basin has fallen by 75 percent, he said.

But Doug Flanders, director of policy and external affairs at the Colorado Oil & Gas Association, said the companies were taken aback by the letters and their tone because they had assumed a strong working relationship with the regulators.

“Even the bigger companies are getting up to speed on many of the new regulations as we are learning more about these,” he said. “When you are trying to implement a new rule that has never been done — this [rule] is the first of its kind, we are the only state that actually regulates methane — sometimes to be able to get to that spot where you need to be within those regulations, it just can take a while.” 

The companies that contributed the 152 alleged violations include: Encana Oil & Gas Inc.; Great Western Oil & Gas Co.; Bill Barrett Corp.; K.P. Kauffman Co. Inc.; Kerr-McGee Oil & Gas Onshore LP; Bonanza Creek Energy Operating Co. LLC; Extraction Oil & Gas LLC; Synergy Resources Corp.; PDC Energy Inc.; and Bayswater Exploration and Production LLC.

All the leaks were from storage tanks, where companies store condensates produced at the well pads.

Colorado’s regulators are investigating the violations. If found culpable, the companies could be fined $15,000 per day of violation or have their permits revoked. [Emphasis added]

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