Encana holding fined $222,500 for leak also targeted in lawsuit

An Encana subsidiary was fined $222,500 by state regulators Monday for an incident in which tens of thousands of gallons of oil and gas condensate spilled from a pipeline north of Parachute, contaminating ground and surface water and spurring a lawsuit by the owner of a big-game hunting ranch.

The Colorado Oil and Gas Conservation Commission approved a fine amount reached under a settlement agreement with Hunter Ridge Energy Services, finding it violated a rule requiring it to manage exploration and production waste in a way that protects waters of the state.

A lawsuit seeking $5 million in damages for the spill, brought by Bishop Ranch LLC in Rio Blanco County, remains pending, said Mark Mason, the attorney representing the ranch in the litigation.

He said a fine that’s a slap on the wrist “following their massive discharge of hazardous waste in the Piceance Basin does not alter their civil liability to private property owners.”

The settlement agreement says the spill “affected soil, waters of the state, and vegetation but did not affect potable use wells; nor did it cause wildlife or livestock mortality or crop damage.”

The state says Hunter Ridge has spent about $2.7 million so far on remediation work and expects to spend a significant amount more on future work.

The state says an estimated 1,195 barrels of condensate, or just over 50,000 gallons, have been recovered so far.

The leak, discovered in June 2016, occurred in the North Parachute Mountain area of Garfield County near the Rio Blanco County line. Hunter Ridge has blamed the leak on bacterial corrosion of the pipeline. Hunter Ridge told the state after the leak’s discovery that condensate traveled underground about 4,200 feet before surfacing in a spring and flowing more than a mile north to a stock pond.

Hunter Ridge’s multi-pronged response has included installing a system to collect water from the spring in a vault and pump it into an oil separation system. Separated oil is pumped into an injection well for disposal.

Caerus Oil and Gas subsequently has bought Encana’s oil and gas assets in the Piceance Basin, but Encana continues to own Hunter Ridge and will remain responsible for the ongoing cleanup.

The lawsuit claims the spill contaminated a 320-acre ranch bought by Michael Bishop in 2002, and killed the completion of a $5 million sale of the property, which is now unmarketable due to the environmental damage and accompanying stigma. The property includes a hunting lodge, a backcountry airstrip and hangar, and a spring and well that provided potable water, the suit says.

Mr. Bishop intends to aggressively pursue his case to bring to light the company’s irresponsible actions that caused extensive environmental contamination — so future similar incidents may be avoided,” Mason said.

Encana has declined comment on the suit.


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