05 Jan News: Gunnison Energy Fined for Spills in the North Fork Valley

It has recently come to light that the Colorado Oil and Gas Conservation Commission has fined Gunnison Energy $350,000 for a series of spills in the North Fork Valley in 2018.

COGCC records show that there have been four reported incidents in Delta and Gunnison Counties in 2018, with Gunnison Energy being responsible for three. SG Interests was responsible for the other. In total, these incidents resulted in between 11-2,400 barrels of produced water spilled. This massive range is the result of COGCC regulations allowing operators to report in increments of 5-100 barrels.

The incident that finally garnered this fine was a flowline leak caused by an improperly designed vent, which froze, causing 420 gallons (10bbl) of produced water to spill down a hill. Gunnison Energy excavated the contaminated soil and disposed of it at the Adobe Butte Landfill in Delta County.

Gunnison Energy was fined for this spill because the company failed to build its equipment to the proper specifications, failed to properly manage its waste water, failed to properly inspect its equipment, and failed to take the necessary steps to ensure no adverse environmental impact. COGCC requires that all operators “must design each component of a flowline to: prevent failure by minimizing internal or external corrosion and the effects of transported fluids; and withstand anticipated external pressures and loads that will be imposed on the pipe after installation.”

The failure that caused the most recent leak in May 2018 was the result of ice buildup in a vent. The COGCC determined that Gunnison Energy should have anticipated that flowline vents in an area like the North Fork would likely encounter freezing temperatures, and that the failure was entirely preventable. Gunnison Energy’s inspection regime should have discovered the issue before a spill resulted.

The May 2018 incident was discovered as a result of improved inspection procedures the company employed following three previous spills between July 28, 2017 and April 10, 2018. An April 4, 2018 incident, which caused between 210 and 4,200 gallons of produced water to leak, was also the result of frozen valves on a produced water pipeline.

Now, as a result of these failures, Gunnison Energy has been fined $350,000 and must submit to COGCC a plan to eliminate this issue through engineering, inspection, and maintenance. The fine included a 30% discount for not challenging the decision.

Gunnison Energy’s General Manager now believes that they have gone “above and beyond” to prevent this from happening again.

Despite Gunnison Energy’s claims that there was no water contamination as the result of these incidents, at least one of the spill reports included surface water with 1/4 mile of the incident location. This is precisely why we cannot afford any new development in our watershed.

Below are several photos showing the remediation work on the most recent spill.