State, Oxy settle Parachute enforcement action

State regulators have backed off a recommendation to impose a record $500,000 fine against Oxy USA in connection with alleged groundwater contamination northwest of Parachute, and the company has agreed to pay $150,000 to settle the matter.

The Colorado Oil and Gas Conservation Commission approved the settlement today. It includes a $90,000 fine and $60,000 that will go for a still-unspecified public project in Garfield County.

Commission staff contended that fluids related to natural gas production seeped from one of Oxy’s pits in the Cascade Creek area, contaminating groundwater. Oxy denied that the pit ever leaked, and makes no admission otherwise as part of the settlement.

The dispute was the subject of a 10-hour hearing last month.

“Candidly, we received some new information both before the hearing and at the hearing,” commission director David Neslin told the commission.

He said staff took into account the views of an expert witness for Oxy, and information that came to light that Oxy had water lines in place for a centralized fluid collection system. Oxy had said that because of that system, it made little use of the pit.

The investigation began when benzene, a carcinogen, was found in a second spring near one that Ned Prather drank benzene-tainted water from in 2008. Regulators fined Williams a record $423,300 in the Prather case, saying it resulted from a leaking pit liner.

In the case of the second spring, investigators focused on high sodium and chloride levels in a groundwater monitoring well, but no benzene was found in it.


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