Industry self-regulation is a killer

February 20, 2018

Colorado, oil and gas drilling

After the January flowline rulemaking hearings were continued to February, I wrote in my post The COGCC’s wall:

The wall they smacked up against is the totality of the COGCC’s never-ending existential dilemma: How do we maintain the illusion of protecting public welfare, safety, and the environment and wildlife, while at the same time safeguarding the oil & gas industry’s bottom line?

If history is any judge, rest assured they’ll figure it out.

With the commissioners unanimous approval of the flowline rules last week that’s exactly what they did.

The cost of the flowline rules to the industry is minimal. And to placate the masses Governor Hickenlooper, Director Lepore and Commissioner Boigon can beat their chests and boast the most-best rules in the country.

Rulemaking has become a PR stunt for the COGCC. Hearings give local governments and citizens the opportunity to air their grievances in a public hearing, but like the gun debate a circus-like atmosphere takes hold and nothing changes. The outcome is stories across the media about another handbook of new rules that foster the illusion the COGCC is living up to its mission to protect “public health, safety, and welfare.”

After the tragic Firestone home explosion in April last year, Gov. Hickenlooper ordered detailed, online maps of flowlines that carry oil or gas from wells to tanks or other gathering equipment. By August, the governor and the industry (via Colorado Oil & Gas Association spokeshole Dan Haley) scrapped the whole idea of pipeline mapping over sudden concerns that people could intentionally damage pipelines and flowlines.

To date, the COGCC has not provided any evidence or statistics of pipeline tampering, other than COGCC spokesman Todd Hartman telling Westword: “I can verify that vandalism/tampering does occur from time to time.”

It’s puzzling that maps of pipelines could possibly-maybe cause an increase in tampering, but warning signs like these that mark pipeline locations pretty much everywhere haven’t resulted in widespread tampering.

As silly as the pipeline tampering argument is, it came up again at the flowline rulemaking hearing in January, except they upped the threat from mere tamperers to terrorists. No one mentioned the fact that if terrorists want to tamper with pipelines they can just follow the signs.

But the terrorists won that argument. Mapping existing pipelines and flowlines was dropped from the discussion and is not included in the new rules.

What’s really going on?

For one thing it’s 2018. Mapping existing pipelines is done by private companies using GIS (geographic information system). The state could hire a bunch of GIS technicians and do it themselves. Either way would mean the state and/or industry would have to spend millions. The industry has no desire to map existing pipelines or flowlines or they would have done it by now. And there’s certainly no will in the state legislature to allocate funding for a staff of pipeline mapping technicians.

Mapping costs money. It’s that simple. That’s why they scrapped it.

The reason companies never mapped flowline and pipeline routes while they were being constructed, over the past 20 years or more, is because the state never required maps. So that leaves thousands of miles of un-mapped flowlines and pipelines across the state.

With the new rules, mapping is required only when an operator installs a new gathering system from May 1 forward. Operators can provide their own route information. GIS mapping is not required.

On-location and off-location existing flowlines must be registered by October 2019. Operators are only required to provide locations of start and end points, no route maps. Responsibility for conducting proper installation of new flowlines and maintenance of existing flowlines is up to the operators. They are required to submit maintenance/inspection plans for existing off-location flowlines but there’s no provision for the state to verify implementation.

This is called self-regulation.

The on-location flowlines are already mapped by virtue of the well and facilities locations, as in all wells and facilities have flowlines. Once again the operators are responsible for the integrity, monitoring, inspection, and maintenance of the on-location flowlines.

More self-regulation.

Colorado boasts some of the most stringent rules for oil & gas drilling in the country and for the most part the rules as they exist on paper are tough. But compliance relies on the “honor system.” Oil & gas companies self-monitor, self-report and self-regulate.

In 2014, Colorado’s Air Quality Control Commission passed the strictest oil & gas emissions rules in the country but they allow the oil & gas operators to do the air quality monitoring and report emissions data. The cost to operators was a FLIR camera (about $100,000) and some additional paperwork.

Yet the Front Range remains out of compliance with federal ozone standards, and has been for years. The American Lung Association’s 2017 “State of the Air” report lists Denver as the 11th most ozone-polluted city in the country. And now we know that pollution is being pushed up the slope and contaminating our fresh mountain air.

Likewise the new flowline rules require a bunch more paperwork and a new Form 44. Operators are good at completing the required paperwork but there’s little follow-through. Engineers are trained to conduct the required maintenance and inspections but they don’t work on-location.

Rulemaking rarely — if ever — contains any provisions for enforcement. That leaves enforcement up to the COGCC’s tiny inspection unit headed by Margaret Ash, which includes 21 inspectors covering the entire state with over 55,000 active oil & gas wells.

Do the math. Okay. I will. That’s 2,619 wells per inspector.

It would be funny if people weren’t dying.

At least a thirteen explosions and fires have been reported along Colorado oil & gas industry pipelines since two men were killed in the Firestone home explosion. Two of those explosions killed workers.

Workers upgrading an Anadarko Petroleum Co. oil tank facility were caught in a fire that killed one and injured three in Mead, CO, on May 25.

On December 22, 2017, an explosion and fire at a well pad in Windsor sent one worker to the hospital. Firefighters told the local media it was a complicated fire for them to fight because they didn’t know what substance was burning.

According to researchers at the Colorado School of Public Health, there were at least 116 fires and explosions at Colorado oil and gas facilities from 2006 to 2015. Their study, published last summer in Energy Research & Social Sciences, evaluated accident reports from the COGCC and found incidents were reported at 0.03 percent of active wells each year, or about one fire or explosion for every 3,690 active wells.

The rate of these incidents per number of active wells in Colorado is significantly lower than in Utah (0.07 percent of active wells). The difference is that Utah requires mandatory reporting of all incidents involving fires and explosions, but Colorado requires self-reporting only of fires or explosions that have caused harm “to a member of the general public which requires medical treatment” or “significant damage to equipment or well site,” according to COGCC rules.

Dr. John Adgate, the study’s senior author and chair of the department of environmental and occupational health at ColoradoSPH, said: “While the rate of fires and/or explosions were higher in Utah compared to Colorado, this is likely due to the mandatory reporting of all incidents in Utah. In Colorado, the judgment on whether significant damage or injuries to the public have occurred is left the operator’s discretion.”

Last year 619 spills, including numerous pipeline leaks, were reported in Colorado. Altogether, companies spilled more than 93,000 gallons of oil into soil, groundwater and streams. They also spilled more than 506,000 gallons of toxic wastewater. And those are just the spills that companies decided to report to the state’s cozy “honor system.”

The oil & gas industry is really, really bad at self-regulation.

According to Boston Consulting Group, oil & gas “producers have cut costs aggressively, lowering overall operating expenses by $2 to $3 per barrel.” What we are currently living through in Colorado are the disastrous results of allowing an industry that is under enormous financial pressure to self-monitor, self-report and self-regulate.

A 2016 Denver Post investigation revealed one of the ways operators have cut costs: “Oil and gas companies typically leave management of their sites to subcontractors, a practice that dilutes safety standards and protects companies from liability, making an already dangerous job even more so …”

Drilling through Danger [Denver Post; September 2016] is a gut-wrenching expose on Colorado’s oil & gas industry. The Post investigation uncovered a regulatory vacuum combined with a subcontractor loophole that has had and continues to have deadly consequences for workers. Revisiting this series a year and a half later it’s chilling to realize that the same dangers workers face in the oil and gas fields now apply to people whose neighborhoods, school zones, and communities have been invaded by massive oil & gas wells sites and facilities.

The flowlines and pipelines should have been mapped. But mapping won’t stop the next explosion and fire from happening. Neither will the new flowline rules, or any new rules put in place that continue to allow the oil & gas companies to self-monitor, self-report and self-regulate with little or no chance that anyone from the cadre of overworked and underpaid state inspectors will come poking around.

As I finish this post today, the news breaks that COGCC Director Matt Lepore is resigning to take a job with an energy policy consulting firm. This comes as no surprise. He was appointed in August 2012, and lasted longer than his predecessor in the job, Dave Neslin (4 years). Julie Murphy, the assistant director for energy and minerals at DNR, has been appointed to lead COGCC.

However the director does not govern the COGCC any more than a city manager governs the town. The COGCC is made up of nine commissioners (7 men; 2 women), at least four of whom have close ties to the oil & gas industry. The commissioners, who are “charged with fostering the responsible development of Colorado’s oil and gas natural resources in a manner consistent with the protection of public health, safety, and welfare, including the environment and wildlife resources,” have never denied a permit. Even in the face of all the explosions, fires, deaths, injuries, spills, contaminated water, and air pollution, they collectively look the other way and allow the oil & gas industry to self-monitor, self-report and self-regulate.

State Rep. Mike Foote (D-Louisvlle) said it best in his testimony before the commissioners last October: “Members of the commission, so many people are speaking up against the absolute abuse of power we’ve seen from the oil and gas industry … They want someone to say ‘enough is enough.’ They are desperate for someone to tell these oil and gas operators ‘no’ … you have an industry that is out of control. For once, someone needs to say no to this industry. This commission would be a good place to start.”


Drilling through Danger

Flowline Rulemaking: Staff’s Final Draft of Proposed Rules

Is reporting “significant damage” transparent? Assessing fire and explosion risk at oil and gas operations in the United States

, , , , , , , , , , , , , , , , , , , ,

Get From the Styx delivered

Subscribe to our RSS feed and social profiles to receive updates.

One Comment on “Industry self-regulation is a killer”

  1. amyhaddenmarsh Says:

    Peggy, Matt Lepore is resigning March 2. Going to work for Adamantine Energy, a consulting firm. AHM

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: