Colorado Gov. John Hickenlooper on Tuesday called for a statewide review of oil and natural gas operations after an investigation determined that an abandoned and severed unrefined natural gas flowline was linked to a fatal home explosion in Weld County.
The abandoned line, which ran about 170 feet from a nearby Anadarko Petroleum Corp. oil and gas well to the foundation of the home in Firestone, had not been capped, Frederick-Firestone Fire Protection District Chief Ted Poszywak said Tuesday.
Investigators have determined that fugitive gas penetrated the ground near the home’s foundation and entered the home’s French drain, where it found its way through the sump pump and inside the home. The mix of gas and air then found “an ignition source” and exploded around 4:30 p.m. on April 17, Poszywak said.
“It would appear an unusual and tragic set of circumstances occurred here,” he said.
The blast killed Mark Joseph Martinez, 42, and his brother-in-law, Joseph William Irwin III, also 42. Critically injured was Martinez's wife Erin Martinez. Her 11-year-old son was treated and released.
In response, Anadarko shut in 3,000 vertical oil and gas wells in the northeastern part of the state and Great Western Oil & Gas Co. followed suit, shutting in 61 wells in Weld County.
Following the determinations by investigators, including from the Colorado Oil and Gas Conservation Commission (COGCC), Hickenlooper mandated that oil and natural gas operators:
Inspect and pressure test existing flowlines within 1,000 feet of occupied buildings;
Ensure pipelines not in use are properly marked and capped; and
Ensure all abandoned pipelines are cut below the surface and sealed.
The gas flowline, severed about 10 feet away from the home, was considered out of service, according to COGCC Director Matt Lepore. Operators are required to detail to the COGCC the planned route of their flowlines, but the state does not have a record of all the lines ever installed, he said.
COGCC requires that a flowline taken out of service, which is considered abandoned, should be disconnected and sealed at both ends, with all flammable gas removed. COGCC does not yet know whether the suspect line was disconnected from the well, or if it had been disconnected but later reconnected for some reason.
The flowline had been cleanly cut, according to Lepore, which may indicate it was severed by construction equipment while the neighborhood near the well was built.
Investigators have concluded that there is no additional contamination or danger to the neighboring homes.
Late Tuesday Anadarko CEO Al Walker said, "I know I speak for everyone at Anadarko when I say that our thoughts and prayers remain with the Martinez and Irwin families as they continue to mourn the loss of their loved ones. The safety of our employees and the people who live and work in the communities in which we operate is our number one priority.
“Consistent with that, and out of an abundance of caution, last week we shut in our vertical wells in the Oak Meadows area and throughout the basin. We hope that doing so also provided some additional reassurance to the community in the wake of this tragic accident. We will continue to take all necessary and appropriate steps in that regard, and will continue to cooperate fully with all ongoing investigations to ensure we fully understand the basis for the fire district's conclusions and that no stone is left unturned prior to any final determinations."
Anadarko, he said, “also will continue to work with the COGCC on additional steps or actions the agency deems necessary.”
“We know an old, abandoned flowline adjacent to the foundation of the Martinez household was cut, under yet unknown circumstances, and that an unusual set of events led to unrefined gases leaching into the property,” said Colorado Oil and Gas Association (COGA) CEO Dan Haley.
“On behalf of Colorado’s oil and gas industry, the safety of our families, friends, and communities is our highest priority and will remain so as we work to prevent tragedies like this from happening again. COGA supports the state’s call to inspect flowlines and ensure the safety of all Coloradans.
“We are committed to partnering with the COGCC, our operators, home builders and Colorado communities to get it right. In the weeks and months that follow, we will endeavor to enhance flowline and pipeline procedures and remain committed to improving Colorado oil and gas production.”
Wells Fargo Securities LLC downgraded some of Colorado's Denver-Julesburg (DJ) Basin players that it covers because the preliminary findings in the Firestone tragedy "will be an overhang" for exploration efforts by Anadarko and operators that include PDC Energy Inc., Extraction Oil & Gas Inc., SRC Energy Inc., Whiting Petroleum Corp. and Carrizo Oil & Gas Inc.
Regulatory concern could pressure "all DJ players," Wells Fargo senior analyst David Tameron said. "In addition, the incident also likely activates the anti-drilling contingent of the Colorado population."
However, the vertical well production impact should not be "overly meaningful" to the public exploration and production players, he said. In addition to the estimated 13,000 boe/d impact related to Anadarko's 3,000 shut-in wells, Noble has about 18,000 boe/d of vertical output, while PDC has around 6,000 boe/d. Extraction has around 3,000 boe/d and SRC has about 350 boe/d.
"Given the production rates associated with older, vertical wells, we think it might make sense for operators to simply shut-in some vertical wells that were eventually going to be abandoned anyway," Tameron said. "One upside potential to operators shutting in production, if this is eventually what happens, would be that tight pipeline pressures expected this summer and next could be partially alleviated."