State panel agrees to fine firm $138,000

After being assured the amount was more than “a slap on the wrist,” a state commission on Tuesday agreed to fine a Texas energy company $138,000 for surface violations near the Project Rulison underground nuclear blast site.

The Colorado Oil and Gas Conservation Commission voted unanimously in favor of imposing the fine amount previously agreed to during negotiations between Presco and the commission’s staff.

“It’s not a slap on the wrist. We believe we’ve gotten the attention of Presco,” said Carol Harmon, a hearings official for the commission.

The state issued citations against Presco in June 2007 for failing to control stormwater and for committing other violations at seven gas well sites. Among the problems at some sites were runoff of stormwater and produced water from drilling pits into a tributary of Battlement Creek, and having drums and sacks of chemicals floating in pits.

All seven locations are within three miles of the Project Rulison site near Rulison and Battlement Mesa. The federal government detonated an underground nuclear device there in 1969 in an experiment to free up natural gas. Drilling within three miles of the site is governed by special regulations.

Harmon noted that the Presco violations didn’t involve any underground problems.

Luke Danielson, an attorney for landowners in the Project Rulison area, said some of the problems occurred at wells closest to the blast site. Some residents are worried about possible radioactive contamination from the drilling.

“If this is the way the surface is managed — this is not a model of management of the down-hole issues either,” Danielson said.

Presco was cited just after selling its local oil and gas interests in the area to Noble Energy, which rectified the problems identified by the state.

Some oil and gas commissioners wondered why Presco was fined for only two days’ worth of violations in many cases, when the problems appeared to have gone on longer.


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