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Home My WebLink AboutO 157ARCO Alaska, Inc. ^ Post Office Box 100360 Anchoro9e, Alaska 99510-0360 Telephone 907 276 1215 July 12, 1994 Mr. David W. Johnston, Chairman Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, AK 99501-3192 RE: Drilleite 5-23 59'-'751 Dear Commissioner Johnston: C RES ENG SR ENG IR SR ENG I 1§f9T ST_I ST L 1 I' SST ECH ARCO Alaska, Inc. has reviewed the Commission's June 15, 1994 order which levies a $5,586 penalty under the authority of AS 31.05.150(e) and a $35,000 penalty under the authority of AS 31.05.150(a). ARCO Alaska, Inc. will not appeal the Commission's order imposing these penalties. Enclosed please find ARCO's check in the amount of $40,586 in payment of these penalties. ARCO's payment of these penalties is not an admission that its actions were negligent. However, this incident demonstrated that ARCO's wellhead safety procedures could be improved. Consequently, as previously discussed, ARCO has revised its procedures to prevent this type of incident in the future. The Commission's recent revisions to Rule 5 of Conservation Order 145 will also serve to prevent a reoccurrence of this type of incident. Very tr�ul�y` yours, LeL C. Gurul H. Johnson Prudhoe Bay Field Manager /cs RECEIVED JUL 13 1994 ,sakkkasm Alaska Oil 8 Gas Cons, Ccmmisslon Anchorage ARCO Alaska, In e. Is a subnid.ary m An,nreamneiacomw^, aasKa, Inc. Q — oe Bay Unit Disbursement Accow. it J. Box 102776 nrhnrnna AK 9Q510 UUeiJUJO Dale: 07/1: Che& 1{: 00213098 Pay Entity: 0201 Vendor 4: NOo072020253 DATE �-INV.OIC ...;, - r ¢oL it :._... 'l4a`ROSS-.,:+-> 90586.00 rdl;colmrr3ADn2rcaIBN34 _ ,. NET .:. . 07/12/9 V607E294Sd101 C002P 079 9712 40586.00 DRILLSITE 5.23 PENALTY If 3:ai rM- But RECEIVED St C9112LCanmles Ani; rage a 40$86.00 40586.00 s.X•t.rt,a ttus ,.tt,tet.tt- .a .. ,nau. % -...... a Lrat two characters in the SOURCE ID column and ca0ing or writing', 4 90712634366 ATO -800, POB 100360, Anch., AK 99510-0360 SP 9071265 63 18 ATO.925, POB 100360. Anch., AK 99510-0360 H 9071265-6196 P.O. BOX 103560, Anchorage, AK 99510-3560 SX 90712634418 P.O. BOX 103240, Anchorage, AK 99510.3200 f 90712634911 P.O. BOX 103560, AnNorage, AK 99510-3560 BY 90712634911 P.O. BOX 103560, Anchorage. AK 99510-3560 1 90712634913 P.O. BOX 303240, Anchorage, AK 99510-3140 SZ 90712634911 P.O. BOX 103560, Anchorage, AK 99510-3560 O.uen m.n a,r.m 4e.n.Dma .RCO Alaska, Inc. 40 rudhoe Bay Unit Disbursement Account .O. Box 102776 nchorage,'AK 99510 Pay FORTY TSOr3SAND FIVE RUMORED EIGHTY-SIX DOLLARS AND NO CENTS T9 :he order of. STATE OF ALASKA, DEPT OF REVENUE. ALASKA OIL 6 GAS CONSERV COMM 3001 PORCUPINE DRIVE " ANCHORAGE AR 995013192 11@6 Prudhoe Bay unit Dlteurtement Aamunt The Fin, Nan ... I Bma el CMuao.0118 cnloa., lllunits. A. -t 09.11401 Plant.. Tnwuan Rapu011c B.na. shelepllie. ftentuhY 002/3098 00213098 Date 07-22-94 Amount ...... .eo'.40,686.00- n'000021i309&u' 1:08 3 904 26 21: 09 9760911' Void after 90 days 1 , ALASKA OIL AND GAS CONSERVATION COMMISSION March 15, 1994 _ John Whitehead ARCO Alaska, Inc. P.O. Box 100360 Anchorage, Alaska 99510-0360 Re: Drill Site 5-23 Oil Spill Dear Mr. Whitehead WALTER J. HICKEL, GOVERNOR 3001 PORCUPINE DRIVE ANCHORAGE, ALLSKA 99501.3192 PHONE: (907)2729433 TELECOPY. (90n 278]542 The Commission is reviewing the Drill Site 5-23 oil spill on December 30, 1993 for possible imposition of penalties under AS 31.05.150. The spill occurred when high winds caused failure of the 5-23 flow line. Spill size was approximately 365 to 400 barrels of crude oil and 4.0 and 5.3 MMSCF of gas. The Commission concludes the initial cause of the spill was force majeure. ARCO Alaska, Inc., however, appears to have aggravated the spill because it shut-in the well at the well house and disabled the well's safety valve system. ARCO's failure to secure the well at the well head appears inconsistent with sound engineering practices and may violate 20 AAC 25.526, as well as its own operating procedures. Disabling the safety valve system is a violation of Commission regulations, 20 AAC 25.265. Both actions appear negligent. Further, ARCO may have engaged in these actions knowing that each was a violation of Commission regulations. The Commission may impose a civil penalty of $5000.00 per day on persons who negligently violate the statutes and regulations of the Commission. AS 31.05,150(a). It is also within the power of the Commission to define all vented gas related to this incident as waste under AS 31.05.170. Should the Commission conclude, based on the evidence presented, that either a willful or negligent act(s) by ARCO or its employee contributed to the incident, then a penalty may be assessed on every 1000 cubic feet of natural gas vented or otherwise determined to be waste. The penalty is based upon the fair market value of natural gas at the point of waste. AS 31.05.170(e). Before the Commission makes a determination concerning possible imposition of penalties, we are providing you, or anyone else, with an opportunity to provide any additional information to show whether or not the incident was the result of a willful or negligent act(s) and if the gas vented as a result of the incident should be considered waste. Any information you would like to have us consider must be presented in writing or in person before 4:30 PM on April 8, 1994. This will be your final opportunity to comment before we render a decision in this matter. Although penalties are being considered, the Commission wants to compliment you and the rest of the ARCO incident staff for their handling of this case and their forthrightness in reporting the incident to the Commission. The Commission notes that ARCO's response and follow-up to this incident has been reasonable and responsible. We believe ARCO thoroughly investigated the incident and reported all its findings and conclusions to the Commission. We believe the action plan adopted by ARCO, if enforced, will help prevent a similar incident in the future. David W. Chairman cc. Rob Mintz, Dept. of Law WALTER J. NICKEL, GOVERNOR ALASKA OIL AND GAS �3001 PORCUPINE DRIVE CONSERVATION COMMISSION ANCHORAGE, �ZSKA9950"192 March 15, 1994 TELECOPY:(90n 276-7542 John Whitehead ARCO Alaska, Inc. P.O. Box 100360 Anchorage, Alaska 99510-0360 Re: Drill Site 5-23 Oil Spill gjG Dear Mr. Whitehead: The Commission is reviewing the Drill Site 5-23 oil spill on December 30, 1993 for possible imposition of penalties under AS 31.05.150. The spill occurred when high winds caused failure of the 5-23 flow line. Spill size was approximately 365 to 400 barrels of crude oil and 4.0 and 5.3 MMSCF of gas. The Commission concludes the initial cause of the spill was force majeure. ARCO Alaska, Inc., however, appears to have aggravated the spill because it shut-in the well at the well house and disabled the well's safety valve system. ARCO's failure to secure the well at the well head appears inconsistent with sound engineering practices and may violate 20 AAC 25.526, as well as its own operating procedures. Disabling the safety valve system is a violation of Commission regulations, 20 AAC 25.265. Both actions appear negligent. Further, ARCO may have engaged in these actions knowing that each was a violation of Commission regulations. The Commission may impose a civil penalty of $5000.00 per day on persons who negligently violate the statutes and regulations of the Commission. AS 31.05.150(a), It is also within the power of the Commission to define all vented gas related to this incident as waste under AS 31.05.170. Should the Commission conclude, based on the evidence presented, that either a willful or negligent act(s) by ARCO or its employee contributed to the incident, then a penalty may be assessed on every 1000 cubic feet of natural gas vented or otherwise determined to be waste. The penalty is based upon the fair market value of natural gas at the point of waste. AS 31.05.170(e). Before the Commission makes a determination concerning possible imposition of penalties, we are providing you, or anyone else, with an opportunity to provide any additional information to show whether or not the incident was the result of a willful or negligent act(s) and if the gas vented as a result of the incident should be considered waste. Any information you would like to have us consider must be presented in writing or in person before 4:30 PM on April 8, 1994. This will be your final opportunity to comment before we render a decision in this matter. Although penalties are being considered, the Commission wants to compliment you and the rest of the ARCO incident staff for their handling of this case and their forthrightness in reporting the incident to the Commission. The Commission notes that ARCO's response and follow-up to this incident has been reasonable and responsible. We believe ARCO thoroughly investigated the incident and reported all its findings and conclusions to the Commission. We believe the action plan adopted by ARCO, if enforced, will help prevent a similar incident in the future. cc. Rob Mintz, Dept. of Law ARCO Alaska, Inc. Post Office Box 100360 Anchorage, Alaska 99510-0360 Telephone 907 276 1215 July 12, 1994 Mr. David W. Johnston, Chairman Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, AK 99501-3192 RE: Drillsite 5-23 4�,- v-7 Dear Commissioner Johnston: ARCO Alaska, Inc. has reviewed the Commission's June 15, 1994 order which levies a $5,586 penalty under the authority of AS 31.05.150(e) and a $35,000 penalty under the authority of AS 31.05.150(a). ARCO Alaska, Inc. will not appeal the Commission's order imposing these penalties. Enclosed please find ARCO's check in the amount of $40,586 in payment of these penalties. ARCO's payment of these penalties is not an admission that its actions were negligent. However, this incident demonstrated that ARCO's wellhead safety procedures could be improved. Consequently, as previously discussed, ARCO has revised its procedures to prevent this type of incident in the future. The Commission's recent revisions to Rule 5 of Conservation Order 145 will also serve to prevent a reoccurrence of this type of incident. Very truly yours, Leonard C. Gurul /H. William Johnson Prudhoe Bay Field Manager /cs johasl-.l r RECEIVED JUL 13 1994 Alaska Oil & Gas Cons. Commission Anchorage ARCO Alaska, Inc. Is a Subsidiary of AllanlfcRichflelECompany ARM 6001 C BISKa, Inc. �,i loe Bay Unit Disbursement Accotdf it J. BOX 102776 .nchoraae, AK 99510 UUzldUyo Date: 07/1: Check #: 00213098 Pay Entity. 0201 Vendor #: N0 0 0 72 02 0253 iD I - : 1`' VR071294SJH01 ...: C002P 079 SJH S : :` 40586.00 o{laiitwD 07/12/9 4!1586.00 DAILLSITE 5-23 PENALTY '�"z, ii 'Fn"' - - a Ira ' r ' yg r y a �y ECEIVED NMI An rago H' r>a I LL s. 40586.00 B t 40586.00 to First two characters in the SOURCE ID colttmn and calling or writing: A 907/2634366 ATO -800, POB 100360, Anch., AK 99510-0360 SP 907/265-6318 ATO -925, POB 100360, Anch., AK 99510-0360 H 907/265-6196 P.O. BOX 103560, Anchorage, AK 99510.3560 SX 907/263-4418 P.O. BOX 103240, Anchorage, AK 99510.3240 1 907/263-4911 P.O. BOX 103560, Anchorage, AK 99510.3560 SY 907/263.4911 P.O. BOX 103560, Anchorage, AK 99510-3560 T 907/2634913 P.O. BOX 103240, Anchorage, AK 99510-3240 SZ 907/2634911 P.O. BOX 103560, Anchorage, AK 99510-3560 Detach check before disunion, .RCO Alaska, Inc. 4 }1d36 Prudhoe Bay Unit Disbursement Account ,. --To- The Fire, NaOonal Bank of Chfago-0710 Chicago, lllinofe, AanuM 09.97 rudhoe Bay Unit Disbursement Account 609 Payable Through .0. BOX 102776 F4 Repubile Bank, SholbWille. Kentucky nchorage,'AK 99510 3 °1x3,, T 00213098 Pay FORTY THOUSAND FIVE HUNDRED EIGHTY-SIX DOLLARS AND NO CENTS To the order of d -xaxxx.... x• STATE OF ALASKA, DEPT OF REVENUDate 07-12-94 REVENUE Date 40,566. 00x ALASKA OIL .& GAS CONSERV COMM 3001 PORCUPINE DRIVE - Void after 90 days ANCHORAGE AR 995013192 Ien apv 11000002L3096B8 1:0839042621: 09 9760911'