Wyoming steps up enforcement on energy industries

 — April 12, 2013

After more than two years of second- and third- and fourth-chances, the Wyoming Oil and Gas Conservation Commission (OGCC) this week finally pulled a $154,000 bond posted by USA Exploration & Production for failing to test and/or plug more than 100 idle coal-bed methane gas wells in Campbell County.

The state will use that money, and it will have to dip into the state’s idle well account, to do the job for USA Exploration & Production — an estimated cost of $1.4 million.

In a separate action on Tuesday, the commission pulled a $75,000 bond from New Frontier Energy Inc. — enough to plug that company’s idle wells in Carbon County (a job estimated at $67,000).

In the case of California-based USA Exploration, owner John Castellucci got duped into picking up coal-bed methane properties on the bad advice that microbial stimulation would soon turn that industry back into commercial profitability. He made a bet in our capitalist free market, and lost. But it didn’t absolve him from living up to Wyoming’s rules and regulations to protect human health and the environment.

The commission, by delaying definitive action for two years, also risked human health and the environment in Wyoming. Violations of our environmental protections are serious, and they demand action. Oil and gas operations can even operate within regulatory boundaries and still create hazards.

Just this week, the Wyoming Department of Health said that elevated ozone levels have exacerbated health problems in Sublette County.

There are some 8,000 to 9,000 idle coal-bed methane gas wells idle in the Powder River Basin. Most are in the hands of companies that are capable of maintaining the facilities according to state and federal regulations. But many are in the hands of companies flirting with bankruptcy, raising the potential for land, water and air pollution. So this isn’t a matter of heavy-handed regulatory bureaucrats picking on small businesses. It’s a serious public health issue.

Wyoming is generous in extending leniency. An Associated Press story this week pointed out Chesapeake Energy didn’t receive any enforcement actions by the state as a result of a dangerous blowout that forced the evacuation of dozens of residents in Converse County last year. The article noted that Wyoming’s Oil and Gas Conservation Commission didn’t recognize any violations, and that the Wyoming Department of Environmental Quality (DEQ) lacked jurisdiction in the matter.

The commission’s actions this week were a continuation of what appears to be an effort by Wyoming regulators to step up enforcement on energy activities and facilities.

In March, the oil and gas commission imposed a $10,000 fine against seismic company GeoKinetics for its role in serious surface damage spanning 10 different properties in southeast Wyoming last spring.

That news followed enforcement actions by Wyoming DEQ against four oil and gas companies for various air emissions violations. The agency issued 20 notices of alleged violations in the first two months of this year, compared to five during the same period last year — a move that won praise from environmental advocacy groups.

“This is an encouraging sign and an important step forward. It shows that DEQ is holding operators accountable if they fail to follow the law,” said Jon Goldstein, Environmental Defense Fund senior energy policy manager.

This week, DEQ said it will keep up the pace of increased monitoring and enforcement on the oil and gas industry, including a focus on engines (or what regulators refer to as small-source emissions). DEQ officials said the agency will again perform additional compliance checks on engines at oil and gas production facilities across the state.

According to Steve Dietrich, DEQ’s Air Quality Division administrator, these increased checks go above and beyond.

“These engines at the facilities already have state air permitting requirements and must meet federal standards when built,” said Dietrich. “However, these additional checks using a portable analyzer, test the operations of these engines in the real world environment, including the effects of weather conditions, elevation, and loading.”

The Petroleum Association of Wyoming (PAW) is smartly putting its support behind the state’s enforcement efforts. PAW vice president John Robitaille told WyoFile that most of the violations discovered in the field are not intentional. He said PAW and its members would bring their own pressure on those who willfully violate rules.

“We don’t need people out there doing things intentionally that harms the rest of us. We don’t condone that. We don’t want that to happen,” said Robitaille. “We as an organization would reach out to them and ask them to follow the rules, and if they’re not familiar with the rules we can help them out and point them to people who can help.”

The oil and gas industry isn’t the only business that state regulators need to monitor carefully. Wyoming DEQ regularly monitors all types of businesses and activities, and you can find the agency’s enforcement actions on its website. A cursory check revealed this notice of violation to PacifiCorp, alleging that cancer agent “sulfuric acid mist” emissions were 250 percent of the maximum allowable limit at its Naughton coal-fired power plant in southwest Wyoming.

“Since the violation occurred, the Naughton units have demonstrated they are in compliance. PacifiCorp is working with the Wyoming Department of Environmental Quality to resolve the violation and ensure a long-term compliance plan is in place,” PacifiCorp spokesman Dave Eskelsen told WyoFile via email.

Kudos to Wyoming officials for stepping up their monitoring and enforcement actions. Wyoming’s vigorous energy industries require vigorous regulation if we are to achieve any balance of energy development and environmental health.

— Dustin Bleizeffer is WyoFile editor-in-chief, and a former Powder River Basin coal miner. You can reach him at (307) 577-6069 or email dustin@wyofile.com. Follow Dustin on Twitter at @DBleizeffer

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