New flood regulations adopted for oil facilities
State regulators Monday adopted rules designed to better protect oil and gas facilities from the kind of flooding experienced on the Front Range in 2013.
However, the Colorado Oil and Gas Conservation Commission declined a request to require tanks and production equipment to be kept away from waterways where possible.
COGCC director Matt Lepore said the agency steered away in its rulemaking process from issues of where to locate facilities and whether riparian setbacks should be required.
“The purpose of this rulemaking from our point of view was and is mitigation measures,” he said.
The measures grew out of the agency’s efforts to learn lessons from the 2013 floods, which damaged not just highways and communities but oil and gas facilities. An estimated 48,000 gallons of oil and 43,000 gallons of produced water were spilled from those facilities, although the contamination was so diluted by floodwaters it wasn’t considered a health or environmental danger.
Under the new rules applying to floodplains, new and existing tanks must be surrounded by hardened berms made of steel or similar protections, rather than earthen barriers; critical equipment must be subject to an engineered anchoring system to help prevent things such as tanks toppling or floating away, exploration and production waste pits must be removed, and new wells must be capable of being shut in remotely. Rules for new equipment are effective June 1; retrofits are required by April 1, 2016, unless a company obtains a variance or extension.
Western Resource Advocates, Boulder County and the Northwest Colorado Council of Governments unsuccessfully asked the COGCC to implement rules to avoid siting of oil and gas facilities near waterways and acknowledge the authority of local governments to have stricter requirements than the state when permitting such facilities.
“Potentially harmful and flammable materials should not be stored in areas prone to flooding,” Laura Belanger of Western Resource Advocates said in a news release.
The oil and gas industry generally was supportive of the newly required measures, many of which a number of companies already follow and which helped prevent further damage in the 2013 flooding. But the COGCC Monday heard concerns that some of the measures, particularly retroactive ones, could make it uneconomical to continue operating more marginally productive wells, sometimes called “stripper” wells.
Edward Ingve, who owns Renegade Oil & Gas Co. LLC, which focuses on stripper wells, said the rules will cost him $100,000 to $200,000. He questioned why the COGCC was adopting the new rules, given that the 2013 damage to facilities wasn’t more extensive.
“The lessons learned from this flood is that there’s no need for any additional rules,” he said.