MEMORANDUM OF AGREEMENT
Between the Water Quality Control Division and the Oil and Gas Conservation Commission
Response to Spills/Releases to Surface Water
Article I. BACKGROUND:
Section 1.01. The Water Quality Control Commission (“WQCC”), the Water Quality Control Division (“WQCD”) and the Oil and Gas Conservation Commission (“OGCC”) have a history of cooperation in regulatory efforts intended to prevent and mitigate impact to water resources in the state of Colorado that may result from oil and gas operations.
Section 1.02. In 1990 the Department of Natural Resources, the WQCC, the WQCD and the OGCC entered into a “Memorandum of Agreement For the Implementation of SB 181 Amendments to the Colorado Water Quality Control Act (§ 25-8-101, et seq)” (the “1990 MOA”). The 1990 MOA provided for the OGCC to act as agent of the WQCD in matters relating to the “disposal of produced waters, and other oil field wastes other than surface discharges” (1990 MOA ¶ 1.1). The 1990 MOA made the OGCC responsible for compliance with “statewide and site-specific water quality standards for discharges into state waters, other than surface waters, . . .” (1990 MOA ¶ 5.1.d).
Section 1.03. In recent years the WQCD and OGCC have become aware that the OGCC and the WQCD monitor and initiate agency enforcement for spills, releases and accidental discharges (“spill/release”) from oil and gas operations that may affect surface waters of the state. The OGCC requires reporting and monitors all spills/releases of any size from oil and gas operations which enter or threaten to impact any waters of the state, and the WQCD requires reporting for any accidental spill or discharge that “may cause pollution of the waters of the state contrary to the provisions of” the Water Quality Control Act. See OGCC Rule 906(b)(3); §25-8-601(2), C.R.S.
Section 1.04. The current regulatory scheme governing spills/releases to surface waters from oil and gas operations creates circumstances where the regulatory efforts of the OGCC and the WQCD may overlap, and may be duplicative. The WQCD and the OGCC desire to implement the most efficient regulatory process for handling the reporting, response, remediation and associated enforcement actions related to spills/releases to surface waters from oil and gas operations.
Article II. DEFINITIONS:
Section 2.01. “Exploration and Production Waste” means
“those wastes that are generated during the drilling of and production from oil
and gas wells or during primary field operations and that are exempt from
regulation as hazardous wastes under Subtitle C of the Federal “Resource
Conservation and Recovery Act of 1976”, 42 U.S.C. Sec. 6901 to 6934, as
amended.” §34-60-103 (4.5), C.R.S.
Section 2.02. “CDPS Permit“ means a Colorado Discharge
Permit System permit issued by the WQCD in accordance with Part 5 of the Water
Quality Control Act. §25-8-501 to –509, C.R.S.
Section 2.03. “Oil and gas operations” means “exploration
for oil and gas, including the conduct of seismic operations and drilling of
test bores; the siting, drilling, deepening, recompletion, reworking, or
abandonment of an oil and gas well, underground injection well, or gas storage
well; production operations related to any such well including the installation
of flowlines and gathering systems; the generation, transportation, storage,
treatment, or disposal of exploration and production wastes; and any
construction, site preparation, or reclamation activities associated with such
operations.” §34-60-103 (6.5), C.R.S.
Section 2.04. The “Rules” means the Rules and Regulations and Rules of Practice and Procedure for the OGCC, as amended from time to time.
Section 2.05. “Surface waters” means all surface waters
that flow through the state, including any subsurface water to the extent there
exists a hydrological connection between the surface and the subsurface water.
Section 2.06. “Spill/Release” means the unauthorized sudden discharge of E&P waste from oil and gas operations to the environment, including the unauthorized discharge of E&P waste from oil and gas operations to the environment over time.
Article III. PURPOSE:
3.01. This Agreement
recognizes the potential for overlapping regulatory authority and concurrent
enforcement actions, and the agencies’ mutual desire to coordinate efforts in
regulating spills/releases to surface waters attributable to oil and gas operations.
3.02. This Agreement
will allow the WQCD and the OGCC to join together to effectively protect the surface
waters of the state from adverse effects resulting from spills/releases to
surface waters attributable to oil
and gas operations.
Section 3.03. This Agreement is intended to recognize the OGCC as the lead agency for reporting, response, remediation and enforcement action related to spills/releases to surface waters from oil and gas operations that do not constitute a violation of an existing CDPS permit. For any spill/release that enters or threatens to impact surface waters of the state the OGCC will coordinate reporting, response, remediation and enforcement with the WQCD.
3.04. This Agreement
is intended to avoid duplicative regulatory efforts and focus on the prevention
and efficient remediation of spills/releases to surface waters.
3.05. This Agreement is intended to allocate
regulatory expertise to most effectively assess and remediate spills/releases
to surface waters.
Section 3.06. This Agreement is intended to ensure
appropriate corrective and remediation action, and to minimize non-compliant
spills/releases to surface waters.
Section 3.07. This Agreement is intended to foster enhanced communications and working relationships between the WQCD and the OGCC and to ensure appropriate non-compliance response under both agencies’ statutes.
IV. STATUTORY AUTHORITY:
Section 4.01. The WQCC has authority under the Colorado Water Quality Control Act (§§25-8-101 to –703, C.R.S.), to “develop and maintain a comprehensive and effective program for prevention, control, and abatement of water pollution and for water quality protection through the entire state . . . ” §25-8-202, C.R.S.
Section 4.02. The Water Quality Control Act establishes a state water quality management program consistent with the Clean Water Act, administered by the WQCD which prohibits any person from “discharg[ing] any pollutant into any state water from a point source without first having obtained a permit from the division for such discharge, . . . .” §25-8-501 (1), C.R.S.
Section 4.03. The OGCC has authority to regulate “[o]il and gas operations so as to prevent and mitigate significant adverse environmental impacts on any air, water, soil, or biological resource resulting from oil and gas operations to the extent necessary to protect public health, safety, and welfare, taking into consideration cost-effectiveness and technical feasibility.” §34-60-106 (2)(d), C.R.S.
Section 4.04. The OGCC “has jurisdiction over all persons
and property, public and private, necessary to enforce the provisions of this
article, and has the power to make and enforce rules, regulations, and orders
pursuant to this article, and to do whatever may reasonably be necessary to
carry out the provisions of this article.”
§34-60-105 (1), C.R.S.
Section 4.05. The Colorado Department of Public Health and
Environment (“CDPHE”) has authority to impose criminal and civil
penalties. §25-8-601, C.R.S.,
§25-8-608, C.R.S. The OGCC has
authority to impose penalties for any violations of the Oil and Gas
Conservation Act, any Commission rule, regulation or order. §34-60-121, C.R.S.
Article V. RELEVANT OGCC REGULATIONS:
Section 5.01. OGCC Rule 906. contains the general OGCC
requirements for spill/release reporting, remediation and prevention.
Section 5.02. OGCC Rule 324A.a. requires operators to
“take precautions to prevent significant adverse environmental impacts to air,
water, soil, or biological resources to the extent necessary to protect public
health, safety and welfare, . . . .”
Section 5.03. OGCC Rule 324A.b. provides that no operator, “in the conduct of any oil and gas operation shall perform any act or practice which shall constitute a violation of water quality standards or classifications established by the Water Quality Control Commission for waters of the state, . . . .”
Article VI. REPORTING REQUIREMENTS FOR
SPILLS/RELEASES TO SURFACE WATERS:
Section 6.01. Any spill/release of less than 5 barrels
that does not enter or threaten to impact the surface waters of the state does
not require reporting to either agency.
The operator shall remediate the impact of the spill/release in
accordance with OGCC rules and regulations.
Section 6.02. Any spill/release of any size or any
unpermitted discharge that enters or threatens to impact surface waters of the
state must be verbally reported by the operator to the OGCC Director and the
WQCD as soon as practicable after discovery.
The agency witnessing any spill/release or unpermitted discharge to
surface waters or receiving the initial spill/release report will instruct the
operator to report the spill/release to the other agency.
Section 6.03. Any spill/release of greater than 5 barrels
shall be reported to the OGCC on an OGCC Spill/Release Report Form 19 within
ten (10) days of discovery.
Section 6.04. Any spill/release of greater than twenty
(20) barrels shall be reported to the OGCC Director within twenty-four (24)
hours of discovery. This notification
is in addition to the written report requirement set forth in Section 6.03.
Section 6.05. The WQCD shall provide and update the OGCC
with a list of discharge permits held by oil and gas operators. Any spill/release of any size in violation
of an approved CDPS permit shall be immediately reported by the permittee to
the WQCD in accordance with the permit terms.
Section 6.06. The OGCC agrees to notify the WQCD and the
affected operator of any witnessed or suspected violations of CDPS discharge
permits or of any unpermitted discharges.
Section 6.07. The WQCD agrees to notify the OGCC of any
reported spill/release from oil and gas operations when the WQCD receives the
Section 6.08. Any spill/release to surface water that
occurs after business hours shall be reported by the operator to the WQCD in
accordance with the Emergency Response reporting requirements of the CDPHE.
Article VII. RESPONSE TO SPILL/RELEASE REPORTS:
Section 7.01. The OGCC shall respond to all
spills/releases to surface waters (that are not a violation of an existing CDPS
permit) in accordance with OGCC Rules, and evaluate the severity and extent of
damage caused by the spill/release.
Section 7.02. The WQCD shall respond to any spill/release
in violation of an existing CDPS permit.
Section 7.03. The OGCC shall contact the WQCD immediately
after receiving a report of any spill/release that impacts or threatens to
impact surface waters of the state in order to coordinate a joint agency
response to the spill/release.
Section 7.04. The OGCC shall notify WQCD of any planned
site visit to inspect the impact of a spill/release to surface water, and shall provide WQCD personnel the option to
accompany OGCC personnel.
Section 7.05. The agencies shall cooperate in the assimilation of data related to the spill/release to surface water. Any physical data collected or evidence acquired that relates to the spill/release shall be shared between the agencies.
Section 7.06. The WQCD shall have the right to participate
in any OGCC response, evaluation and required remediation of the impact of any
spill/release to surface waters of the state as follows:
The WQCD may choose to join as a party to the OGCC’s
response, in which case the required response and remediation shall be
conclusively deemed to satisfy the obligations of both state agencies.
(b) The WQCD may choose to allow the OGCC to respond to the spill/release in accordance with OGCC Rules. Thereafter, the WQCD may monitor the OGCC’s response and remediation requirements, but the WQCD shall not impose any additional remediation requirements, subject to injunctive relief and collection of civil penalties consistent with the WQCD Enforcement Management System (EMS) and Civil Penalty Policy (CPP).
If either agency receives a third party complaint regarding
a spill/release from oil or gas operations, the recipient agency shall
immediately evaluate the source and circumstances surrounding the
spill/release. If the spill/release
allegation is related to a CDPS permit the matter shall be adjudicated by the
WQCD. If the spill/release allegation
relates to oil and gas operations that have not historically required a CDPS
permit the matter shall be retained by or referred to the OGCC.
Article VIII. REMEDIATION OF SPILLS/RELEASES TO SURFACE WATERS:
Section 8.01. The OGCC shall require remediation of
spills/releases to surface waters associated with oil and gas operations in
accordance with its Rule 324A., Rule 324D.,
and the 900 Series Rules, including without limitation, directing the operator
to prepare and submit for OGCC approval a Site Investigation and Remediation
Workplan, Form 27, detailing the action planned to remediate the spill/release.
Section 8.02. When a spill/release enters or threatens to impact the surface waters of the state the OGCC shall consult with the WQCD before approving any Remediation Workplan.
Section 8.03. The WQCD shall prescribe all clean-up conditions for a spill/release in violation of a CDPS discharge permit.
Article IX. ENFORCEMENT PROCEDURES FOR SPILLS/RELEASES TO SURFACE WATERS:
Section 9.01. The WQCD shall be responsible for bringing
any action for civil or criminal penalties resulting from an operator’s
violation of an CDPS permit.
Section 9.02. The OGCC shall take the lead in any enforcement action based on a spill/release to surface waters from oil and gas operations that does not involve a violation of a CDPS permit. The OGCC, subject to WQCD concurrence, shall be responsible for bringing any action for civil penalties that result from an operator’s failure to report a spill/release to surface waters in a timely manner, or to appropriately remediate a spill/release to surface waters in accordance with Rule 906. or any approved Form 27.
Section 9.03. The OGCC shall decide whether to issue a
Notice of Alleged Violation (“NOAV”) to any operator who violates the pollution
standards set forth in OGCC Rule 324A., fails to report or remediate a
spill/release to surface waters as
required in Rule 906. or fails to comply with the conditions of any approved
Form 27 Workplan.
Section 9.04. The OGCC shall notify the WQCD of its
enforcement plans, including without limitation, the nature and scope of the
spill/release, the operator’s diligence in reporting and remediating, any NOAV
issued, any resolved NOAV and any proposed penalty assessment.
Section 9.05. If the OGCC issues an NOAV, the OGCC may resolve the NOAV by entering into an Administrative Order by Consent (“AOC”) with an operator setting forth a negotiated settlement of the NOAV, and may impose agreed-upon penalties, consistent with Rule 522.
Section 9.06. The OGCC shall submit any proposed AOC to the WQCD for its review and comment prior to finalizing the AOC terms with the operator.
Section 9.07. Within twenty (20) days of its receipt of the proposed AOC, the WQCD shall advise the OGCC in writing whether the terms contained therein will meet WQCD requirements for enforcement, or if additional review and assessment are required. If the terms are acceptable, the WQCD agrees that it will not pursue any additional penalty for the spill/release to surface waters or associated operator action described in the AOC. If the WQCD requires additional time to evaluate the proposed AOC, the OGCC may elect to proceed with the AOC, but agrees to consult with the WQCD before it finalizes any negotiated settlement.
Section 9.08. The WQCD shall have the right to intervene in any OGCC proceeding seeking an Order Finding Violation (“OFV”) based on a spill/release to surface water associated with oil and gas operations.
Section 9.09. The WQCD shall advise the OGCC if any penalty assessment for a spill/release to surface water associated with oil and gas operations does not meet WQCD requirements. If the OGCC does not have the authority or does not concur with the WQCD assessment of the required enforcement action, the OGCC may defer any further enforcement action or penalty assessment to the WQCD.
Section 9.10. If the OGCC imposes a penalty for a spill/release to surface water based on a violation of OGCC rules and regulations and the WQCD elects to impose a penalty pursuant to its statutory authority the WQCD shall take into consideration the penalties assessed by the OGCC against the violating operator.
Section 10.01. To the Water Quality Control Division:
Water Quality Control Division
4300 Cherry Creek Drive South
Denver, CO 80246-1530
Attention: Ms. Carla J. Lenkey
Section 10.02. To the Oil and Gas Conservation Commission:
Oil and Gas Conservation Commission
of Natural Resources
1120 Lincoln St., Suite 801
Denver, CO 80203
Attention: Ms. Debbie Baldwin
Section 11.01. This Agreement shall not affect or modify
the terms and conditions of the 1990 MOA and the respective obligations and
responsibilities of the agencies set forth therein.
Section 11.02. This Agreement shall become effective on the
date of execution by the last signatory party.
It may be amended upon the mutual agreement of the WQCD and the OGCC, or
it may be terminated upon thirty (30) days written notice to the other parties
by the WQCD or the OGCC.
Article XII. APPROVALS:
Department of Natural Resources
Oil and Gas Conservation Commission
Oil and Gas Conservation Commission
Department of Public Health and Environment
Water Quality Control Division
Water Quality Control Division
Oil and Gas Conservation Commission