Scott eyes field inspector levels for oil and gas

Ray Scott

Reports that state Sen. Ray Scott says he has received of state oil and gas inspectors sleeping on the job have him questioning whether there may be more inspectors than are needed.

While it turns out the Colorado Oil and Gas Conservation Commission has far fewer inspectors than the Grand Junction Republican initially had understood was probably the case, the levels have tripled over the last decade as the state has sought to boost inspection activity. And Scott said he plans to continue looking into staffing levels at the agency and whether the agency’s time is being spent in the most appropriate areas.

Scott raised the issue in July while taking phone calls from area residents during a July tele-town hall conducted by the Colorado Rural Energy Action Council. He brought it up while talking about the high level of regulation of oil and gas in Colorado.

“I’ve had reports in my (Senate) district and other districts that we have so many inspectors out there that operators are actually finding them taking a nap on a pad because they have nothing to do, so they go to the field and just sit there. There’s nothing for them to do,” he said at that time.

“That speaks volumes about how far we’ve pushed the envelope with this governor (Democrat John Hickenlooper) wanting additional inspectors in the field, more regulation, and let’s be honest, it’s just an attempt to slow down a business and it’s not successful.”

In an interview shortly after the tele-town hall, he said he heard the reports of napping inspectors from an oil and gas company and from a COGCC inspector, whose identities he said he is keeping confidential to avoid potential backlash to them.

Scott also said then that it was his understanding that the agency had something like 33 inspectors back in 2007-08, compared to more than 100 today.

In response to subsequent requests for information by both Scott and The Daily Sentinel, the state Department of Natural Resources reported that in fact the oil and gas commission has 30 inspectors today, excluding managers, up from nine in the 2007-08 fiscal year.

The entire agency has a little more than 100 employees. Arguably a lot of those other staff work in support of inspectors. State Sen. Matt Jones, a Boulder County Democrat, said that each additional inspector requires about three additional support people.

Scott acknowledged being initially wrong in his understanding of inspector levels.

“I think they have a lot of other field staff that don’t show as inspectors,” he said, adding that the Colorado Department of Public Health and Environment also inspects oil and gas facilities.

He said it’s also possible that inspectors are having to work so many hours to inspect so many wells that they’re not getting enough rest, rather than napping due to a lack of work. But he thinks the agency’s inspector staffing level merits closer inspection itself at a time when he says Texas is approving oil and gas drilling permits in a matter of days, whereas in Colorado the state can take more than 100 days to approve permits.

Oil and gas commission data as of mid-year showed that the average approval time topped 100 days in three months last year, while the average through May of this year ranged from 91 in January to 37 in June.

“What I’m thinking at this point is maybe they need less inspectors and more staff in the office to get the work done,” Scott said.

After Scott raised the issue in July, Ursa Resources vice president Don Simpson told The Daily Sentinel his company hasn’t experienced inspectors sleeping on the job, “or that there is a glut in inspectors.”

“For Ursa, inspections have increased, but we attribute that to our Parachute/Battlement Mesa operations near the (residential) community,” he said by email, noting that those inspections have deemed its operations to be satisfactory.

“We have not found any inspectors asleep on our pads,” said Bob Hea, executive vice president and chief operating officer of Laramie Energy.

But he added, “We have seen an uptick in inspections overall and more repeat inspections of pads near population centers. We suspect this is driven by recent issues associated with the Front Range and not issues with Western Slope producers. Nevertheless, we pay the same price.”

He said while Laramie can’t say the ramp-up of inspections is meant to slow down drilling, increased state and federal requirements in response to “out-of-state-driven” activism are meant to have that effect.

“The good news is that the tide is turning at the federal level. At the state level, we are taking a wait-and-see approach,” Hea said.

Scott is hopeful that with the Trump administration’s strong support for energy development, there may be fewer mandates to states and an easing of restrictive regulations.

Jones believes that this is hardly the time to suggest Colorado has too many inspectors, given the April explosion at a home in Firestone that killed two men and was blamed on a nearby gas flowline from an area well.

“To say there’s too many inspectors … is just not paying attention to what’s going on,” he said.

He said that at one point, wells were being inspected just once every three years. With increased staffing, that’s down to one every 1.3 years, and he would like to see inspections once a year.

He said if wells are being drilled near homes, as is happening on the Front Range, it’s important that inspectors look at them annually “to make sure they’re working right.”

“Firestone is proof positive that that’s needed,” he said.

After years of increasing in numbers, the COGCC inspector level has remained at 30 for the last two fiscal years, as drilling slowed down in the state. But Jones expects to push for more inspectors next year. He said increasing inspections amounts to being “the easy stuff” in terms of better addressing the dangers of drilling in urban areas.

“Inspectors help industry find problems quicker so they can fix them,” he said.

He said he hasn’t heard reports of inspectors sleeping on the job, although he’s heard someone make what he called a “snide remark” about there being so many inspectors that they’re tripping over each other.

“If somebody’s napping on the job that’s a personnel issue,” he said.

Department of Natural Resources spokesman Todd Hartman said the department’s not aware of people sleeping on the job. Oil and gas commission Director Matt Lepore said a disciplinary process would take place if it was found someone is spending hours at a time doing so.

“We’re not paying them to sleep,” he said.

But he also said that inspectors drive a lot of miles out in the field, and can spend their lunch breaks as they choose, including by taking a nap.

He added, “Look at the number of inspections we did last year. We did 40,000 inspections. Does that strike you as 30 people sleeping on the job?”

In an Aug. 2 emailed response to questions Scott raised through a Senate Republican staff member about inspection levels, Doug Vilsack, legislative liaison for the Department of Natural Resources, said a 2013 bill required the commission to use a risk-based strategy for inspecting oil and gas locations. The strategy targets the operational phases most likely to experience spills, excess emissions, and other types of violations.

Vilsack added that a survey of seven states in 2015 found that they had an average of one inspector for every 1,669 wells, compared to one per 1,920 wells in Colorado. Colorado since has added three more inspectors, bringing its number close to the average for those states, Vilsack said.

He wrote, “While the pace of new well drilling did decrease during the industry downturn, the number of ‘active’ wells subject to inspection continued to climb (i.e. more wells were still being drilled than were being plugged). The number of active wells in Colorado is currently 55,000, and it is worth noting that COGCC has seen a dramatic increase in new well starts in the past three months. As a result, COGCC inspector workloads will continue to increase, not decrease, if staffing levels remain static going forward.”

Vilsack added that inspectors also do other work such as supervising contractors plugging and reclaiming “orphaned” wells that have fallen into the state’s hands to deal with.

While Scott remains concerned about the reports he’s gotten of inspectors sleeping under trees rather than doing inspections, he also acknowledged Lepore’s point that they could be just resting up over their lunch hours.

“It’s kind of hard to go to McDonald’s in the Piceance Basin, right?” Scott said.

But he thinks the subject of inspectors and inspection levels continues to warrant attention. He is interested in reports he’s heard from companies of inspectors with “a huge lack of knowledge” about oil and gas, and companies questioning whether as much on-the-ground inspection activity is required at a time when companies are able to use technology to monitor and control wells and facilities remotely from offices.

He said one thing he’ll be looking at is how the overall picture of the commission’s budget “matches up to all these things we’re discussing.”


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