Regulators in Colorado on Thursday said they would seek an $18.25 million penalty, the largest ever, after an abandoned natural gas flowline exploded in a Firestone neighborhood, killing two men.
Kerr McGee, a subsidiary of Occidental Petroleum Corp. (Oxy), was fined by the Colorado Oil and Gas Conservation Commission (COGCC) for the deadly April 2017 tragedy in a recently built home in Weld County that was about 170 feet from a well. Oxy assumed Kerr McGee operations when it bought Anadarko Petroleum Corp. last year.
The incident led Colorado to revamp oil and gas oversight rules under state Senate Bill (SB) 19-181. The National Transportation Safety Board also last year determined that the Firestone incident occurred because there was incomplete documentation and unsafe abandonment of the flow line, and it noted that local rules had allowed homes to be built on/or adjacent to the abandoned field.
Most of the penalty funds are proposed to be used to help to increase public safety by funding projects relevant to oil and gas flowline monitoring and air emissions.
COGCC Director Jeff Robbins said Thursday it was his and the regulatory staff’s duty “to ensure that the state of Colorado’s oil and gas operations are conducted in a manner that is protective of the public’s health, safety, welfare, wildlife and the environment as directed by SB 19-181.
“The COGCC will continue to work to protect every person’s safety in oil and gas operations using our rulemaking process and our enforcement tools.”
The proposed fine is the largest ever “by more than 11 times and due to the violations, and with the loss of lives, it is fair and appropriate,” Robbins said.
The commission alleges there were four violations of COGCC’s in its Notice of Alleged Violation (NOAV). The $18.25 million penalty is the maximum amount possible and, for the first time, the “aggravating factor of death,” which increased one of the penalties from $3.6 million to $5.4 million.
The next steps in COGCC’s enforcement process is for Oxy to answer to the commission. A special hearing is scheduled April 6 at the Ralph L. Carr Colorado Judicial Center in Denver.
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