BEFORE THE CORPORATION COMMISSION OF OKLAHOMA

Transcription

1 BEFORE THE CORPORATION COMMISSION OF OKLAHOMA APPLICANT: TIM BAKER, DIRECTOR OIL AND CAUSE NO. EN GAS CONSERVATION DIVISION OKLAHOMA CORPORATION COMMISSION ITN: RESPONDENT: MM & M RESOURCES, INC. RELIEF SOUGHT: CONTEMPT, FINES, FORFEITURE OF SURETY FILED JUN REPORT OF THE ADMINISTRATIVE LAW JUDPURT CLERKS OFFICE - OKC corporation COMMISSION QQKLAl-1OMA 1. This cause came for hearing before Administrative Law Judge Andrew T. Dunn ("A ) ror tne t..orporation Commission for the State of Oklahoma ("Commission") on June 8, 2016 in the Commission's Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to notice given as required by law and the rules of the Commission. Applicant's counsel represented (at the conclusion of the June 8, 2016 hearing) that she intended to appeal the recommendation of the ALJ and requested a report for EN No Party APPEARANCES Counsel Applicant: Tim Baker, Director, Oil and Gas Conservation Division, Oklahoma Corporation Commission, 2101 N. Lincoln Blvd. Oklahoma City, OK Tracy A. Case, Assistant General Counsel, Oklahoma Corporation Commission Respondent: MM & M Resources, Inc. Charles L. Helm, Attorney for Respondent, Helm & P0 Box 302 Boone, 105 North Hudson, Hightower Building, Suite 7936 W Highway 9 700, Oklahoma City, Oklahoma Wetumka, OK JURISDICTION The Commission has jurisdiction over the subject matter and notice has been given in all respects as required by law and the rules of the Commission. The Commission provided notice to the respondent of its violation as well as that the applicant may seek compliance as well as the maximum lawful amount of five thousand dollars ($ ) per violation per day as authorized by 52 O.S. Section 102 or as otherwise specified by law. Forfeiture of surety, or its increase up to the statutory limit, as may be sought against Respondent if necessary based on 52 O.S etseq. 4 SUMMARY OF THE CAUSE Well Name Well Location Interim Order Number CNE/4 of the NE/4 of Section 14, Neal Well No. 2 Township 7 North, Range 11 East in Hughes County, Oklahoma

2 S CAUSE NO. EN Page 2 of 5 5. Interim Order No required; a. That on or before May 6, 2016, Respondent MM&M Resources, Inc. is required to take all measures required to restore integrity to the Neal Well No. 2, or plug the well and restore the site in accordance with Commission rules; b. That on or before April 6, 2016, Respondent MM&M Resources, Inc. is required to pay to the Commission a fine in the amount of $1,000.00; That if the Neal Well No. 2 is plugged in accordance with Commission rules by April 6, 2016, the fine of $1, will be waived; c. That this cause shall be reopened at 8:30 a.m. on the Friday, May 6, 2016, Pollution/Enforcement Docket at the Oklahoma Corporation Commission, First Floor Courtroom, 2101 North Lincoln Boulevard, Jim Thorpe Office Building, Oklahoma City, Oklahoma, to determine if Respondent MM&M Resources, Inc. has complied with the requirements of the Interim Order; d. That if Respondent MM&M Resources, Inc. is determined at the reopening of this cause to have assessed against Respondent for that failure, in accordance with Commission rules; e. That if Respondent MM&M Resources, Inc. is determined at the reopening of this cause to have assessed against Respondent for that failure, in accordance with Commission rules. SUMMARY OF EVIDENCE & FINDINGS OF FACT 6. Exhibits 10 and 11 were admitted into evidence on June 8, Exhibit 10 and 11 contain two pages (each) of pictures of the Neal Well No. 2 location. 7. Summary of Testimony given by Randy Williamson, 0CC District IV Field Inspector a. Testified that he was not involved in the original complaint and that his involvement began when the Respondent sought to file for a temporary exemption for the Neal Well No. 2. Testified that he has inspected Respondent's Neal Well No. 2 site several times. He testified that he inspected the site in preparation for trial prior to each hearing date. He testified that Respondent did not contact Commission staff regularly regarding work at the well. He testified that the Respondent did communicate with staff regarding some work, such as setting a bridge plug and 0CC staff was present for that attempt. The witness also testified that he is aware of Respondent's blindness. b. Testified that the Respondent met the requirements of Order at the time of trial. Testimony provided that Respondent sent a check in the amount of one thousand dollars ($1,000.00) to the Commission as required under Order on March 29, ii. Testimony provided that Respondent restored the well site by removing a tank and casing located on the surface lands. This was completed after April 6, 2016 and before the June 8, 2016 re-opening. iii. Testimony provided that the Respondent plugged the Neal Well No. 2 on April 6, 2016.

3 Page 3 of 5 c. Testified that he requests that the Respondent be fined. He requests that the Commission retain the check for the one thousand dollars ($1,000.00) because respondent failed to comply with the interim order for failure to restore the well site, which was required under Order He testified that exhibit 10 shows the location of the plugged well. He testified that Exhibit 11, page 2 photo, taken May 30, 2016, shows a tank located on the property. He testified that Exhibit 11, page 1 photo, taken June 8, 2016, the tank had been removed from the property. ii. He requests an additional one thousand dollar ($1,000.00) fine against the Respondent for failure to communicate with 0CC Staff about the restoration work done at Neal Well No. 2. d. Testified that he was unaware of Respondent counsel's representations. i. Testified that he was unaware of Respondent counsel's representation that the surface owner intended to buy the Neal Well No. 2 and the tank at the site for use as a disposal well. ii. Testified that he was unaware of Respondent counsel's representation that Respondent paid twenty thousand dollars ($20,000.00) to plug the Neal Well No. 2. e. Testified that the main objectives for the cause had been achieved by the time of hearing. Currently, the well is plugged properly, the site is restored properly, and no risk to treatable water exists. CONCLUSIONS OF LAW AND RECOMMENDATION 8. Applicant's counsel represented (at the conclusion of the June 8, 2016 hearing) that she intended to appeal the recommendation of the ALJ and requested a report for EN No The issue in this case is Respondent's failure to plug or produce the Neal Well No. 2 in contravention of OAC 165: , Duty to plug and abandon. This rule states in subsections (e) and (f); Subsection (e), Time period for plugging well with production casing, provides that "Unless exempted under provisions contained elsewhere in this Section, any well which has production casing in place shall be plugged within one year after the latter of: (1) Cessation of drilling if the well was not completed or tested; or (2) Cessation of the latter of completion or testing if the well has not produced; or (3) Cessation of production." Subsection (f), Operators failing to commence timely plugging operations, provides that "An operator who fails to commence plugging operations as required in (c), (d), and (e) of this Section after due notice from the District Office or the appropriate field inspector may be fined up to $1, " 10. The Commission determined that Respondent was in violation of OAC 165: , Duty to plug and abandon, for the Neal Well No. 2 and, under Order , the Commission required; a. That on or before May 6, 2016, Respondent MM&M Resources, Inc. is required to take all measures required to restore integrity to the Neal Well No. 2, or plug the well and restore the site in accordance with Commission rules (Emphasis added);

4 Page 4 of 5 b. That on or before April 6, 2016, Respondent MM&M Resources, Inc. is required to pay to the Commission a fine in the amount of $1,000.00; That if the Neal Well No. 2 is plugged in accordance with Commission rules by April 6, 2016, the fine of $1, will be waived (Emphasis added); c. That this cause shall be reopened at 8:30 a.m. on the Friday, May 6, 2016, Pollution/Enforcement Docket at the Oklahoma Corporation Commission, First Floor Courtroom, 2101 North Lincoln Boulevard, Jim Thorpe Office Building, Oklahoma City, Oklahoma, to determine if Respondent MM&M Resources, Inc. has complied with the requirements of the Interim Order. d. That if Respondent MM&M Resources, Inc. is determined at the reopening of this cause to have assessed against Respondent for that failure, in accordance with Commission rules; e. That if Respondent MM&M Resources, Inc. is determined at the reopening of this cause to have assessed against Respondent for that failure, in accordance with Commission rules. 11. In summary, Order mandates that Respondent must "take all measures required to restore integrity to the Neal Well No. 2, or plug the well and restore the site" on or before May 6, 2016 with the stipulation that, if the Neal Well No. 2 is plugged in accordance with Commission rules by April 6, 2016 the one thousand dollar ($1, ) fine will be waived. (Emphasis added) CC Staff testimony at hearing provided that the Respondent plugged the Neal Well No. 2 on April 6, Respondent mailed a check for the one thousand dollars ($1,000.00) to the Commission in advance of April 6, 2016 (as the interim order required), which the Commission held pending resolution of the case CC Staff testimony provided that Respondent restored the well site by removing a tank and surface casing located on the surface. This restoration of the site was completed after April 6, 2016 and prior to the June 8, 2016 re-opening date CC Staff testified that the well is currently plugged properly, the site is restored properly, and no risk to treatable water exists. 15. The ALJ recommended from the bench for no fine against the Respondent. The ALJ further recommended that the case be closed. The Neal Well No. 2 and the associated site were brought into compliance prior to the actual re-opening date, June 8, 2016, with the bulk of the work and expense (that being the plugging of the well itself) having been completed on April 6, 2016 the date Order provided that the well needed to be plugged by in order to waive the one thousand dollar fine ($1,000.00). The Respondent is, therefore, in compliance with Commission rules and with Order and no fine is to be assessed against Respondent for failure to comply with the Commission. Regarding the request for an additional one thousand dollar ($1,000.00) fine against the Respondent for not contacting Commission staff regularly regarding work at the well, the ALJ denies Applicant's request. Both parties had counsel communicate and represent their interests through the trial process to the conclusion of the cause. Respectfully submitted this 'V day of U Andrew T. Dunn, Adipinistrative Law Judge

5 Page of S ATD Cc: Tracy A. Case, Attorney for Applicant Charles L. Helm, Attorney for Respondent ALJ Michael Decker, Office of Administrative Proceedings James Myles, Deputy General Counsel for Deliberations, Office of General Counsel Michele Craig, Interim General Counsel for Agency Counsel, Office of General Counsel Court Clerks Oil Law Records Commission Files