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Oil company facing new complaints from state regulators

Absorbent booms are placed in the White Earth River on Oct. 18, 2015, in Mountrail County, N.D., while a nearby oil well owned by Oasis Petroleum was out of control. Photo courtesy of the North Dakota Department of Health

BISMARCK – An oil company facing two complaints of violating state oil and gas regulations could be deemed a repeat offender, forcing them to pay an additional $60,000 in fines for a previous violation.

The North Dakota Industrial Commission alleges that Oasis Petroleum violated state regulations in October when an out-of-control well spewed oil, gas and brine for four days near the White Earth River in Mountrail County.

The commission is proposing $100,000 in fines for the violations, though the commission routinely suspends 75 percent to 90 percent of fines.

This case could be different, however, because Oasis is under a one-year suspension from state regulators for a previous spill that also resulted from a well that was out of control.

In May, Oasis paid $16,500 in fines to the Industrial Commission with $60,000 – or 80 percent- suspended for one year. The settlement agreement stemmed from a November 2014 mechanical failure that caused a well in Williams County to release uncontrollably for three days, Industrial Commission records show.

The state could impose the $60,000 in suspended fines, plus the additional fines, if Oasis commits the same or “substantially similar” offense within a year.

What led to each incident differed, but both involved an “uncontrolled release of subsurface pressure,” which is a violation of state rules.

Alison Ritter, spokeswoman for the Department of Mineral Resources, declined to comment on whether her office considers the latest complaint a repeat violation for Oasis. Ritter said the allegations, as well another complaint for Oasis that stems from a saltwater pipeline leak, are active investigations and she can’t discuss the cases.

Lynn Helms, Department of Mineral Resources director, has pointed to a lack of repeat offenders while defending the state’s practice of suspending the majority of oil and gas fines.

“I think the No. 1 thing to point out is that since 2006 with the suspended penalties, we have had zero recidivism, we have had zero repeat offenders,” Helms told the Industrial Commission last January. “So the concept of leaving 75 to 90 percent of the penalty hanging over their head for one to five years causes them to change their processes and behaviors and results in long-term compliance with our rules, and that’s our real goal.”

In a statement, Oasis said the company works to improve safety and environmental compliance in all of its operations.

“Oasis is working with the North Dakota Industrial Commission to ensure that the facts of these matters are known, thoroughly understood, and that any concerns are properly addressed,” the company said.

In the most recent spill, oil, gas and brine released between Oct. 17 and Oct. 20 near the White Earth River. Although health officials said a majority of the contamination stayed on the well pad, some reached the river and an area with trees and other plants.

Crews recovered 2,715 barrels, or 114,030 gallons, of oil and 13,330 barrels, or 559,860 gallons, of brine, the North Dakota Department of Health spill report states.

In addition, crews recovered 2,495 barrels of a combination of brine, freshwater and oil, said Bill Suess, spill investigation program manager with the health department.

How much contamination reached the river is unknown, but Suess said “it was never more than a sheen.” Tests show there is no lingering impact to the river, which is a tributary to Lake Sakakawea and the Missouri River.

The most significant environmental impact was oil that sprayed trees.

“We’ll have to see how well they come back in the spring,” Suess said.

The health department plans to issue its own penalty to Oasis for the spill, but is waiting to see how the cleanup progresses, Suess said.

The previous Industrial Commission fine for Oasis stems from a release that began Nov. 10, 2014, when crews lost control of an Oasis well during hydraulic fracturing operations. Oil, gas and brine flowed uncontrollably for three days, but the spill was contained within the dikes of the well site, documents say.

Crews recovered an estimated 100 barrels, or 4,200 gallons, of oil and 3,600 barrels, or 151,200 gallons, of brine, the spill report says.

In addition, Oasis faces the potential of $87,500 in fines from the Industrial Commission for a May saltwater pipeline spill that reached Smishek Lake.

Oasis reported the spill on May 4 in Burke County and estimated that 1,500 barrels, or 63,000 gallons, of brine released. A creek that flows into Smishek Lake was contaminated, and there were minor brine impacts to the lake, Suess said.

The focus of cleanup operations now is on soil and groundwater remediation, which Suess said he expects to continue at least into next year.

The health department is planning to issue a separate penalty for that spill, Suess said.

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