Colorado Interstate Gas Co. (CIG) has been fined $374,000 by the Colorado Oil and Gas Conservation Commission for a 2006 incident in which a cracked well casing in its 8.5 Bcf Fort Morgan, CO, storage field allowed natural gas to escape, causing the evacuation of some residents and threatening their water supply (see Daily GPI, Oct. 25, 2006).

The order followed an investigation in which CIG was found to have failed to plan and maintain an adequate casing program and failed to exercise due care to protect water-bearing formations. CIG maintained that the gas release was sudden and accidental and occurred on Oct. 9, 2006. However, the conservation commission staff said the leaks may have begun much earlier, noting that consecutively high pressure readings in April and September should have served as an alert calling for further investigation. “CIG personnel missed several opportunities to detect the release of gas in a timely fashion,” commission staff said.

Despite a report from a landowner on Oct. 14, 2006 of water coming out of a cathodic protection well nearby, it was not until Oct. 22 that CIG identified and plugged the well, the commission staff said.

CIG estimated the amount of gas that escaped at between 450 and 700 MMcf. Thirteen families were evacuated while tests of the air and water were conducted. Residents were later able to return to all but two of the residences. CIG later bought those two properties. The escape of the gas and displaced water caused craters, fissures and sinkholes in some parts of the surrounding area.

The commission reduced the initially recommended fine of $416,000 because CIG self-reported the incident, has cooperated with the commission in the investigation and has installed a more rigorous monitoring plan for the storage field wells. The order was the result of a settlement between CIG and the commission, which then was approved.

As part of a comprehensive rules rewrite the commission is drafting measures to require better testing and monitoring of all underground storage facilities in the state, David Neslin, acting commission director, said. He expects the draft regulations to be published by the end of March

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