Record fine, second one against Oxy approved

By Dennis Webb
Thursday, April 29, 2010

The Colorado Oil and Gas Conservation Commission today imposed a record $390,000 fine against Oxy USA and a second penalty of $257,400 for two cases of oil and gas contamination of spring waters northwest of Parachute.

The commission approved the amounts that had been proposed in a settlement agreement between the company and the commission’s staff.

Both incidents involved operating pits without permits. The $390,000 fine was for an incident in the Cascade Canyon area, and the second was for one at Rock Springs.

At Rock Springs, Oxy operated a pit for nearly 10 years without a permit that was needed because it was in a sensitive area. The pit had a liner but it had been torn.

In the Cascade Canyon case, leaks occurred from an unlined pit installed in 2007 that would have had to have been lined had a permit been sought.

Tests of one spring in that case reportedly found levels of benzene, a carcinogen, that were 300 times above groundwater standards.

The two incidents of contamination were discovered in 2008. Commissioners applauded Oxy’s work since then to phase out pits and instead use tanks for fluid storage. But they also expressed disappointment in the company’s actions leading to the violations.

“It’s hard to believe in 2007 a company such as yours would build an unlined and unpermitted pit in Colorado or anywhere,” said commission Chairman Joshua Epel.