The Great Colorado Oil Blowup

Well, it was the well. In Firestone, Colorado, a house exploded because a cut gas line that should have been abandoned but was still connected leaked gas into the soil five feet from the house.  The odorless gas seeped into the basement of the house and was ignited. This determination is almost certain to ignite another, thankfully figurative, firestorm.

Leaving aside the inevitable lawsuits over that explosion, what does this mean and what should it mean for oil and gas development?

Let’s start with the easy part: what it should mean. Oil companies need to be responsible for the safety of their facilities (that includes being legally liable). New construction near existing oil and gas facilities needs to be aware of oil and gas infrastructure, including these flow lines. Government should enforce inspections of existing oil and gas infrastructure and assure the proper sealing and plugging of wells and flow lines being abandoned. Ideally, government should sponsor means of detecting unusual levels of hydrocarbons leaking at well sites and employ them as a means of recognizing trouble spots (CIRES and NOAA have been working on such tools).

Frankly, if GG lived near a well, he’d be trying to find out about the feeder lines and the history of the well. And quite possibly monitoring gas levels in the basement.

The good news is that the state has ordered oil and gas companies to pressure-test all lines within 1000′ of occupied buildings and to make sure abandoned lines are properly marked and capped. It is unlikely that industry will protest.

Unfortunately, that probably won’t be enough to prevent some future tragedy unless something else changes.

Assuring proper inspection given the more than 50,000 active wells in the state of Colorado is hard, and it isn’t clear the state has the inspectors to make sure company-run inspections are up to snuff–and there can be lots of feeder lines associated with a well, lines that, at present, the state does not have maps of. And changes in well ownership over time can complicate who might be responsible for a mistake: for instance, the well in question has had four separate owners. Some wells are outright abandoned with no identifiable owner: the state would have to be the one to try and check up on those wells. Wells are stopped and restarted all the time. Changes as new wells are drilled or storage tanks or pipelines are built means that pipes might be disconnected or shut off more frequently than inspections might catch. A one-time order will help, but a meaningful schedule of inspections is necessary.

Another problem may well arise with building codes in existing oil and gas areas. Northern suburbs of Denver are growing rapidly, and they are in the Wattenberg field, where wells can be found in practically every field. While the state now requires new wells to be at least 500′ from occupied buildings, local building regulations are more lax about where buildings can be built relative to existing wells (Firestone allows new houses to be as close as 150′ of existing wells). If building regulations are tightened, many landowners might find they cannot build on their land–in essence, the oil and gas activity costs them lots of opportunity; odds are many landowners will fight any such regulation. If new regulations also encompass feeder lines, even more land might be taken off the table, or developers might have to physically remove such surface piping before building.

One could imagine adding a requirement that buyers of a home must be informed of the proximity of the home to current and abandoned oil and gas wells. In fact, this might be a clever way of underscoring the breadth of the problem in communities unaware of the oil and gas infrastructure in their neighborhoods.

 

This again underscores a point GG has hammered on. The oil and gas industry has mocked fracking protesters by saying fracking is safe–which is pretty true, strictly speaking, but many protesters are not really speaking strictly. Oil and gas development carries some risks, mainly to the people who work on it but also to neighboring communities, and to pretend otherwise risks looking stupid when, say, a house blows up. (And yes, this isn’t the first house to explode). Fracking opponents are really fighting the wrong war: it is not fracking per se they really oppose but oil and gas development as a whole.

Demanding a high level of responsibility for oil and gas facilities in suburban areas is sensible; opposing new facilities without that assurance is justifiable. Given the kind of turnover of facilities, which can include an operator going bankrupt, the state must be the final guarantor of safety. This means the state must have the resources–personnel, equipment, technology, and law–to oversee these activities. Right now the state depends heavily on the oil and gas companies themselves.

The oil and gas industry has tried mightily to avoid local control of their industry for the simple reason that it makes their job a lot harder, but in fighting that control they have made claims of safety and environmental sensitivity that do not match up with their actions. It may well be that one company’s failure to properly disconnect a pipe at one well might finally lose the industry whatever credibility they had and along with it, the protection of the state they have lived under for so long. Frankly, they deserve that outcome.

And ironically, many oil and gas opponents have championed local control over oil and gas drilling, but the fact that setbacks for new houses from oil and gas wells was left to local governments has not produced a safer environment.

If industry has any sense at all, they will go the the statehouse and ask for an increase in the taxes on extracted oil and gas, with the money to go to two places.  First, to the Colorado Oil and Gas Conservation Commission or a successor oversight body, for them to hire the people and buy the equipment necessary to independently inspect oil and gas facilities.  And second, to a state-managed fund to pay for damages from oil and gas activities which would compensate those damaged by oil and gas activities quickly, the state then to assume the duty of recovering the payouts from liable companies (a process that can be quite lengthy, something the state can suffer but individual landowners often cannot). If they did this, maybe they could head off the restrictions others will seek to impose on them. Fail to get in front of this, though, and they might find themselves at legislative hearings arguing against pictures of the shattered remains of a house they blew up through incompetence.

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