State regulators Monday imposed a $1.7 million penalty on Chevron subsidiary Noble Energy for a rare well blowout that spewed oil, sand and water over 7 square miles of Weld County in April and prompted a school closure and a university-led toxins study.
The Energy and Carbon Management Commission issued a consent agreement with Chevron giving the oil giant a 10% discount for settling, meaning the company will pay $1.53 million. Chevron must also at its own expense continue with mandated cleanups of all the contaminated parcels, which were divided into 300 treatment sections for management.
The Bishop well, which commission staff had previously said was by far the worst they’d investigated in decades, blew materials across a 1.5-mile radius of land from the wellhead and prompted a safety closure of Galeton Elementary School about a mile to the north.
The blowout started April 6 and lasted four days. The plume shot into the air over that time and showered the area with 20,000 barrels of produced water, sand and salts, and 5,000 barrels of oil and condensates, according to Chevron.
In the accident report the oil company filed with the ECMC, it said the problem was an improperly installed production tree — an assembly of valves that sits atop the well to control the flow of oil and gas — as well as a poorly installed barrier suspended from the production tree that is designed to prevent the flow of liquids.
When a well is being completed it is capped with a blowout prevention device known as a BOP stack. When the well, which is under pressure, is ready for production the BOP stack is replaced with a production tree.
A barrier — a tube hanger — to control the pressure is put into place as the BOP stack is replaced. In the case of the Bishop well, as the production tree was being put in place it released the tube hanger.
The ECMC issued a notice of alleged violations of state oil and gas well rules in June. Chevron/Noble may face other discipline over the incident. A state body called the Natural Resource Damages Trustees is investigating the blowout “on behalf of the public when Colorado’s natural resources are injured or destroyed as a result of an oil spill or release of hazardous substances,” the ECMC settlement announcement said. Those trustees can pursue their own claims and settlement with the company, on top of what ECMC has already settled.