OIL AND GAS:

Spills up 17 percent in U.S. in 2013

The number of spills reported at oil and gas production sites shot up slightly more than 17 percent last year, even as the rate of drilling activity leveled off.

There were at least 7,662 spills, blowouts, leaks and other mishaps in 2013 in 15 top states for onshore oil and gas activity, according to an EnergyWire analysis of state records. That's up from 6,546 in the states where comparisons could be made (EnergyWire, July 8, 2013).

That adds up to more than 20 spills a day.

Many of the spills were small. But their combined volume totaled more than 26 million gallons of oil, hydraulic fracturing fluid, "fracking" wastewater and other substances. That's the same volume as what gushed four years ago from BP PLC's ruptured Gulf of Mexico oil well in 11 days.

Some of the increase may have come from changes in spill reporting practices in a handful of states, but the number of spills and other mishaps rose even without counting those states.

Some of the biggest jumps were in the booming Bakken Shale. North Dakota, which is already contending with flaring and urban woes in its once sparsely populated western end, saw spills jump 42 percent even though the average number of rigs working in the state dropped 8 percent.

Across the state line in Montana, spills were up 48 percent, tracking with the 42 percent increase in rig count figures maintained by Baker Hughes Inc., a common measure of industry activity.

One of the biggest spills of the year flowed from Montana into North Dakota, but it wasn't in the Bakken. It was farther south, at a Denbury Resources Inc. enhanced oil recovery near the state line. Three days before Thanksgiving last year, a pipeline carrying production wastewater broke, and more than 700,000 gallons of wastewater leaked into the ground. The brine surfaced and flowed into a dry Badlands drainage called Big Gumbo Creek, polluting nearly 3 miles.

"We still have this mentality that we have to go faster and faster," said Don Morrison of the Dakota Resource Council, an environmental group that monitors activity in the Bakken. "When you're rushing, things go wrong."

The oil and gas companies say that they're working hard to reduce spills and that some of the increase in spill numbers comes from more diligent reporting.

"I think we're getting closer to 100 percent reporting," said Kari Cutting, vice president of the North Dakota Petroleum Council. "Everybody is very conscious of the situation. Nobody wants spills."

Activity was higher than the rig count would indicate, Cutting added, because rigs have become more efficient. State officials say they measure activity by the number of wells. Records show the number of new wells added in North Dakota last year was up 11 percent, still lagging behind the spill rate.

Pennsylvania had a 60 percent increase in spills, paired with a 30 percent decrease in rig activity. But industry and state officials say the increase is attributable to a lower spill reporting threshold in place for the last three months of the year.

What's counted, what's not

There is no national list of spills from oil and gas production. The Bureau of Land Management keeps reports about "undesirable events" on federal lands, but other spills are handled state by state. EnergyWire assembled the data from the websites and files of state environmental protection departments and oil and gas agencies.

The number and volume of spills is an undercount, as some states don't make data available. It also excludes spills from offshore wells and large interstate pipelines, which are handled by federal officials.

There were also sharp increases in Ohio, where drillers in search of oil and natural gas liquids are moving into the Utica Shale, and Colorado, where floods tore through oil and gas sites in September.

Production-related spills in Ohio doubled, records show, from 51 to 103. But the total number of spills is still small compared with its neighbors, and Ohio is bulking up its enforcement efforts in response to the increased activity, said Mark Bruce, spokesman for the Ohio Department of Natural Resources.

Since 2010, Bruce said, the agency has tripled the number of employees dealing with oil and gas to more than 100. That includes 50 inspectors, and the state is working to hire 15 more.

"ODNR will continue to do all that we can to prevent incidents and will respond quickly and effectively, with our appropriate partners, when they do happen," Bruce said.

In Colorado, where state oil and gas officials are under fire from critics trying to ban fracking, inspectors issued 50 percent more "notices of alleged violations" than in 2013.

In Texas, the oil and gas regulators at the Texas Railroad Commission have also been under pressure to step up enforcement. The agency issued one-third more "severances" -- threats to shut down wells for noncompliance -- than in 2012. An agency spokeswoman, though, said most of the increase was from delinquent organization reports and production reports. And the number of enforcement penalties assessed dropped 40 percent.

In other states, the increase in spills didn't trigger an increase in enforcement. Wyoming had an 8 percent increase in spills, but the Wyoming Oil and Gas Conservation Commission said it issued no fines related to spills in 2013. In Pennsylvania, inspectors found about half as many violations, and the fines levied dropped 22 percent from $420,000 to $326,000. And inspectors in New Mexico's Oil Conservation Division haven't pursued fines against operators in years (EnergyWire, Nov 14, 2013).

North Dakota officials say they don't have enforcement figures. Enforcement reports are kept in individual well files and not compiled.

Cows, twisters, humans causing spills

The reports highlight the variety of ways that spills can happen. Colorado had floods sweep across well sites in September. Montana's wells were hit by a number of tornadoes. One north of Billings in June hurled large steel tanks nearly a mile from a well site.

Among the few states that record causes, the most common are equipment failure, corrosion and human error. But at least 40 reports last year cited frozen valves or other cold weather problems as the cause. More than 20 pointed the blame at cattle.

Some spills come with explosions and injuries. At a Newfield Production site in Utah last May, three workers were tying a new water tank into the tank battery when a series of explosions occurred. One of the workers, the pumper, was pinned under a tank, fracturing his sternum.

About 500 barrels of produced water and oil soaked into the ground.

The largest spill was a 66,000-barrel (2.8 million-gallon) release of coalbed-methane-produced water from a WPX Energy site in Wyoming's Powder River Basin. The water produced from shallow coalbed methane formations in that area can be clean enough for humans to drink, but the salt content can turn farmland hard as concrete.

The company's predecessor, Williams Production RMT, paid an $18,000 penalty to the Department of Environmental Quality for a series of improper production water discharges in the Powder River Basin in 2010.

In Montana, the biggest operator and biggest spiller is Denbury Resources, which doesn't work in the Bakken. The company's focus is enhanced recovery in the Cedar Creek Field in the state's southeast corner. The company accounted for 87 percent of the 123 spills of oil and gas production spills reported to Montana's Department of Environmental Quality.

In North Dakota's Bakken, much of the increase in spills came from smaller, newer companies that hadn't had a large footprint in the Bakken, such as Halcon Resources Corp., which had 67 spills, all in the second half of the year. EOG Resources and Exxon Mobil subsidiary XTO Energy also had big increases in the number of spills.

EOG spokeswoman K Leonard said spill prevention is a "constant focus" for the company.

"In 2014 we are introducing an enhanced spill reduction program in North Dakota designed to provide additional training to employees and contractors working across the state to improve our liquids-handling processes," Leonard said.

The largest operator in the Bakken is Continental Resources Inc., which also had the most spills. The number rose by about 8 percent last year. But Continental executive Tom Oddie said that lagged far behind a 39 percent increase in production.

"Spills were nearly flat from 2012 to 2013, despite increased production," said Oddie, vice president of health, safety, security and environment for the Oklahoma City-based operator.

Oddie said Continental is actively working to reduce spills and their impact, maintaining "spill prevention teams" and taking "appropriate action" against contractors that fail to improve their performance. The company installs steel-lined containment systems and emergency shutdown systems at many of its well sites.

"All these enhancements are part of our drive to continuously improve," Oddie said.

Click here to read EnergyWire's previous reporting on oil and gas spills.

Click here to see the data used for this report.

Click here for information about the data.

Correction: The story and headline have been changed to reflect the correct percent increase in spills from 2012 to 2013. In the original version, it was incorrectly listed as one percentage point higher.

Twitter: @MikeSoraghan | Email: msoraghan@eenews.net

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