Formatted: Font: (Default) Times New Roman, 12 pt BEFORE THE STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION
STATE OF FLORIDA DEPARTMENT IN THE OFFICE OF THE OF ENVIRONMENTAL PROTECTION WATER RESOURCE DIVISION
OGC FILE NO. 14-0012 vs.
DAN A. HUGHES COMPANY, L.P. ________________________________________/
CONSENT ORDER
This Consent Order (Order) is entered into between the State of Florida Department of Environmental Protection, (Department) and the Dan A. Hughes Company, L.P. (Company), to reach settlement of certain matters at issue between the Department and the Company. The Department finds and the Company neither admits nor denies the following: 1. The Department is the administrative agency of the State of Florida having the power and duty to protect Floridas air and water resources and to administer and enforce the provisions of Chapters 377 and 403, Florida Statutes (F. S.), and Chapters 62C-25 through 62C-30, Florida Administrative Code (F.A.C.). The Department has jurisdiction over the matters addressed in this Order. 2. The Company is a person within the meaning of Section 403.161 and 403.031(5), F.S. 3. The Company obtained an Oil & Gas Well Drilling Permit from the Department in December of 2012 (Permit No: 1349H, 20-30H Collier-Hogan Well) to construct a well to be located at the Hogan Island Farm in Collier County, Florida.
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Formatted: Font: (Default) Times New Roman, 12 pt 4. Upon completion of the construction of the 20-30H Collier-Hogan Well (Well), the Company obtained a Five Year Operation Permit in August of 2013 to operate the Well as an oil production well. 5. On December 23, 2013 the Company submitted to the Department a Workover Notification indicating that it intended to conduct a Workover Operation as described in Exhibit 1 attached hereto. This notice stated that the Company planned to commence the workover operation on 28 or 29 December. Subsequently, at the request of the Department, the Company agreed to delay the workover operation until at least 30 December to allow the Department more time to review and respond to the notice. The Company never received any response to the notice from the Department. 6. The Workover Operation proposed by the Company began on December 30, 2013 and continued through January 1, 2014. 7. On December 31, 2013 the Department entered a Final Order Requiring Operations at Well 20-3H Cease and Desist and served a copy of the Final Order on the Company on December 31, 2013. The Departments Final Order did not allege any violations of any applicable laws or Department rules, stating instead that the Department is not satisfied that it has sufficient information that the proposed workover would be protective of the States groundwater resources . . .. The Company continued the Workover Operations until approximately 2:30 PM on the afternoon of 1 January, 2014 failed to comply with the Departments Final Order. A copy of the Final Order is attached hereto as Exhibit 2. 7.8. The Company contends that at all times it was operating under a valid permit and followed all applicable procedures required to conduct the Workover Operations described in Exhibit 1, and its actions in doing so were legal and authorized in every way.
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Formatted: Font: (Default) Times New Roman, 12 pt Having reached resolution of the matter, the Department and the Company mutually agree and it is, ORDERED: 8.9. Within 10 days of the effective date of this Order, the Company shall pay the Department $35,00022,000 in settlement of the regulatory matters addressed in this Order. This amount includes $320,000 for civil penaltiespayments and $52,000 for costs incurred by the Department during the investigation of this matter and the preparation and tracking of this Order. In lieu of paying civil payments to the Department, the Company may provide in-kind payments by funding the studies required below. WELL SAFETY 9.10. Immediately upon execution of this Order and prior to resuming any operations at the subject well, the Company shall provide to the Department the information in paragraphs 10-13 below. 10.11. The Company shall provide Material Safety Data Sheets (MSDS) for all materials used in the Workover Operation described in Exhibit 1 attached hereto, along with the proportion and total volume of each material used in the Workover Operation. 11.12. The Company shall identify the total volume of water used in the Workover Operation, and the source of the water, including the permit number if the water was obtained from a permitted source and confirmation that the volume of water used for the Workover Operation does not exceed any limitation set in the permit. 12.13. The Company shall provide the following information concerning the flowback material management for the Well operations: (a) estimate of the total volume of flowback material; (b) storage capacity at the pad to contain any flowback material that is anticipated to
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Formatted: Font: (Default) Times New Roman, 12 pt be held onsite; (c) description of the secondary containment measures employed at the site; (d) the final disposal location for the flowback material resulting from the Workover Operation; and (e) and confirmation of the regulatory conditions on final disposal, including the permitting agency and permit number(s). 13.14. The Company shall submit an Interim Spill Prevention and Cleanup Plan (ISPC Plan) to be implemented at the Well. The ISPC Plan shall be subject to the Departments approval before resuming operations. If the Department requests additional information or notifies the Company that the ISPC Plan is inadequate or otherwise unacceptable, the Company shall provide the additional information or submit a revised ISPC Plan within the time frame, not less than fourteen (14) days, specified by the Department in the request or notification. Implementation of the Department approved ISPC Plan constitutes satisfaction of this requirement.
RISK ANALYSIS AND MANAGMENT 154. The Company shall provide information and analysis to confirm that this and other Workover Operations are was designed and carried out in a way that provides reasonable assurance that it will not cause or contribute to any violation of any applicable groundwater quality standardeliminates risk to the environment. To provide reasonable assurance that there is no risk the Workover Operation will not cause or contribute to any violations of any applicable of contamination to the groundwater quality standards from the Workover Operation at the Well, the Company, at its sole expense, shall retain independent third-party experts with the appropriate professional licenses qualifications to assess the level of risk develop a that the
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Formatted: Font: (Default) Times New Roman, 12 pt Workover Operation will cause or contribute to a violation of any applicable groundwater quality standards risk analysis (Risk Analysis) related to the activities of the Company as identified in the Workover Operation. This analysis e Risk Analysis shall consider at a minimum, the potential for fluids to migrate through the deep geological formations or the Well casing into surrounding groundwater bearing zones with total dissolved solids concentrations of 10,000 ppm or less. The Department and the Company shall make a good faith effort to reach mutual agreement on the selection of the third-party experts and the Scope of Work to be performed by the experts within 60 days of the effective date of this Order. If no agreement is reached within 60 days of the effective date of this Order, the Department will select the experts to be used and independently Neither the Department nor the Company shall unreasonably withhold their approvale of the experts or the Scope of Work for the Risk Aanalysis; PROVIDED HOWEVER, the Scope of Work will be limited to analyses reasonably necessary to provide reasonable assurances that Workover Operations similar to the Workover Operations described in Exhibit 1 will not cause or contribute to any violations of any applicable groundwater quality standards. The experts shall prepare a Risk Analysis Report and submit the Report to the Department within one year six months of the effective date of this Order. The Report shall rely upon existing data, pertinent scientific literature and available site specific information. 16. Upon receipt of the Report, the Department shall review the Report and in a timely manner determine whether it provides reasonable assurances that Workover Operations similar to the Workover Operations described in Exhibit 1 will not cause or contribute to any violations of any applicable groundwater quality standards. To this end, within 30 days of the receipt of the Report the Department shall notify the Company and the Report author of any apparent errors or omissions and request any additional information the Department is permitted by law to require.
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Formatted: Font: (Default) Times New Roman, 12 pt If the Company believes that any request for additional information is unjustified, or seeks information the Department is not permitted by law to require, the Department, at the request of the Company, shall proceed to evaluate the Report. The Department shall determine whether the Report provides reasonable assurances that Workover Operations similar to the Workover Operation described in Exhibit 1 will cause or contribute to any violations of any applicable groundwater quality standards within 90 days of the receipt of the Report or any timely requested additional information. If the Department fails to make such a determination within the stated time frame, the Report shall be deemed to be accepted by the Department as reasonable assurances that Workover Operations similar to the Workover Operations described in Exhibit 1 will not cause or contribute to any violation of any applicable groundwater quality standard, and the Company will no longer be subject to the prohibition against Workover Operations similar to the Workover Operations described in Exhibit 1 set forth in paragraph 17, below. The Departments determination shall be agency action subject to challenge pursuant to Sections 120.569 and 120.57, Florida Statutes. The Department hereby agrees to provide written notice of any such determination to the Company and also agrees that the Companys substantial interests will be affected by the Departments determination as to whether or not the Report provides reasonable assurances that Workover Operations similar to the Workover Operation described in Exhibit 1will or will not cause or contribute to any violations of any applicable groundwater quality standards. In addition, the Department hereby waives any objection it may otherwise have had that the Company lacks standing to challenge any such determination by the Department. 175. All No future Workover Operations similar to the Workover Operation described in Exhibit 1 shall be implemented at any of for the Companys wells (existing and proposed under Formatted: Underline Formatted: Underline
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Formatted: Font: (Default) Times New Roman, 12 pt valid permits) shall not be implemented by the Company until the Workover Operations have been reviewed and approved by the Department. This review and approval process shall remain in place only until the Risk Analysis Report described in paragraph 15 above is submitted to the Department, and the Department determines that the Risk Analysis Report provides reasonable assurance that Workover Operations similar to the Workover Operation described in Exhibit 1 will not cause or contribute to any violations of any applicable no groundwater quality standards contamination will occur from implementing procedures similar to the Workover Operation described in Exhibit 1. The Department agrees to expeditiously review and respond to any Workover notifications received from the Company, and shall either approve, deny or request additional information regarding each Workover notification within thirty (30) days of receipt of such notice. If the Department fails to approve, deny or request additional information within thirty (30) days of receipt of a Workover notification, the Workover shall be deemed approved. Notwithstanding anything contained in this Consent Order to the contrary, if at any time the Department allows anyone else to conduct Workover Operations similar to the Workover Operations described in Exhibit 1, the Company shall cease to be bound by the prohibition contained in this paragraph. 186. Within 30 days of the effective date of this Order, the Company shall submit a groundwater monitoring plan (Plan) to the Department. The objective of the Plan is to provide reasonable assurance that the Workover Operation does not affect the groundwater above the Underground Source of Drinking Water (USDW) line. The Plan shall be developed and executed at the expense of the Company. The Plan shall include at a minimum: (a) a one-time analytical sampling of the flowback material prior to its final disposal. The analyses to be performed shall be based on the materials that are were introduced into the Well by the
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Formatted: Font: (Default) Times New Roman, 12 pt Workover Operation and compared against established groundwater standards; i.e., the parameters to be analyzed shall be those parameters that are present in the materials introduced into the Well by the Workover Operation in concentrations exceeding any primary or secondary drinking water standard. (b) installation of a series of four shallow observation wells, placed at the NW, NE, SW, SE corners of the pad. The observation wells shall be designed to test the extent of the Surficial Aquifer System, i.e. 145 feet; (c) installation of a one new deeper groundwater monitoring well on the pad and southwest of the subject well to a depth equal to the base of USDW. The exact depth of the deeper groundwater monitoring well will be established based on the location of where the total dissolved solids is 10,000 ppm as determined by a suite of logs run by the Company during drilling; (d) sampling and analyses of all wells for the parameters found in the stimulation injection fluids in concentrations exceeding any primary or secondary drinking water standard as defined by the Material Safety Data Sheets (MSDS) in paragraph 10 above; (e) sampling and analyses of all observation and monitoring wells on a quarterly basis for five (5) years from the date upon which the Department approves the groundwater monitoring plan the life of the permit; (f) an inventory of freshwater supply wells within a quarter mile buffer of the well bore hole; and (g) a schedule for implementing the Plan. 197. If the Department requests additional information or notifies the Company that the Plan is inadequate or otherwise unacceptable, the Company shall provide the additional information or submit a revised Plan within the time frame specified by the Department in the request or notification. Within 30 days of notification from the Department that the Plan is acceptable, the Company shall begin implementing the Plan.
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Formatted: Font: (Default) Times New Roman, 12 pt WITHDRAWAL OF FINAL ORDER 20. In consideration of the mutual agreements set forth in this Consent Order, the Department agrees to withdraw the Final Order Requiring Operations at Well 20-3H Cease and Desist, and the same is hereby withdrawn. SETTLEMENT OF ALL DISPUTES 21. This Consent Order is in settlement of all disputes between the Company and the Department, and upon entry of this Consent Order, the Department and the Company shall proceed to conduct all interactions with one another in a fair, mutually respectful and productive manner. CONFIDENTIALITY 2219. If any of the information submitted by the Company in response to the requirements of this Order is considered a trade secret or is otherwise confidential information in accordance with Chapter 377 or Section 403.111, F.S., the Company shall request upon submittal of the information that the Department keep such information confidential. The Department will thereafter keep such information confidential in accordance with the requirements of Chapter 377 and Section 403.111, F.S. ORDER ADMINISTRATION 230. The Company acknowledges and waives its right to an administrative hearing pursuant to Sections 120.569 and 120.57, F.S., on the terms of this Order. The Company acknowledges its right to appeal the terms of this Order pursuant to Section 120.68, F.S., and waives that right upon signing this Order. 241. If any event, including administrative or judicial challenges by third parties unrelated to the Company, occurs which causes delay or the reasonable likelihood of delay, in Formatted: Centered
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Formatted: Font: (Default) Times New Roman, 12 pt complying with the requirements of this Consent Order, the Company shall have the burden of proving the delay was or will be caused by circumstances beyond the reasonable control of the Company and could not have been or cannot be overcome by the Companys due diligence. The failure of a contractor, subcontractor, materialman or other agent (collectively referred to as contractor) to whom responsibility for performance is delegated to meet contractually imposed deadlines shall not be a cause beyond the control of the Company, unless the cause of the contractors late performance was also beyond the contractors control. Upon occurrence of an event causing delay, or upon becoming aware of a potential for delay, the Company shall notify the Department orally within 24 hours or by the next working day and shall, within seven calendar days of oral notification to the Department, notify the Department in writing of the anticipated length and cause of the delay, the measures taken or to be taken to prevent or minimize the delay and the timetable by which the Company intends to implement these measures. If the parties can agree that the delay or anticipated delay has been or will be caused by circumstances beyond the reasonable control of the Company, the time for performance hereunder shall be extended for a period equal to the agreed delay resulting from such circumstances. Such agreement shall adopt all reasonable measures necessary to avoid or minimize delay. Failure of the Company to comply with the notice requirements of this paragraph in a timely manner shall constitute a waiver of the Companys right to request an extension of time for compliance with the requirements of this Consent Order. 252. Entry of this Consent Order does not relieve the Company of the need to comply with applicable federal, state or local laws, regulations or ordinances. 263. The terms and conditions set-forth in this Consent Order may only be enforced in a court of competent jurisdiction pursuant to Sections 120.69 and 403.121, F.S. Failure to
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Formatted: Font: (Default) Times New Roman, 12 pt comply with the terms of this Consent Order shall constitute a violation of Section 403.161(1)(b), F.S. 274. All submittals and payments required by this Consent Order to be submitted to the Department shall be sent to the Deputy Director of Beach Management, Mining & ERP, Division of Water Resource Management, Florida Department of Environmental Protection, 3900 Commonwealth Blvd., MS 300, Tallahassee, FL 32303. 285. The Department hereby expressly reserves the right to initiate appropriate legal action to prevent or prohibit any violations of applicable statutes or the rules promulgated there- under that are not specifically addressed by the terms of this Consent Order. 296. This Consent Order is a settlement of the Departments civil and administrative authority arising under Florida law to resolve the matters addressed herein. This Order is not a settlement of any criminal liabilities which may arise under Florida law, nor is it a settlement of any violation which may be prosecuted criminally or civilly under federal law. 3027. Electronic signatures or other versions of the parties signatures, such as pdf or facsimile, shall be valid and have the same force and effect as originals. No modifications of the terms of this Order shall be effective until reduced to writing, executed by both Respondents and the Department, and filed with the clerk of the Department. NOTICE OF RIGHTS 3128. This Consent Order is a final order of the Department pursuant to Section 120.52(7), F.S., and it is final and effective on the date filed with the Clerk of the Department unless a Petition for Administrative Hearing is filed in accordance with Chapter 120, F.S. Upon the timely filing of a petition, this Order will not be effective until further order of the Department.
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Formatted: Font: (Default) Times New Roman, 12 pt 3229. Persons who are not parties to this Order, but whose substantial interests are affected by it, have a right to petition for an administrative hearing under Sections 120.569 and 120.57, F.S. Because the administrative hearing process is designed to formulate final agency action, the filing of a petition concerning this Order means that the Departments final action may be different from the position it has taken in the Order. The petition for administrative hearing must contain all of the following information: a) The OGC Number assigned to this Order; b) The name, address, and telephone number of each petitioner; the name, address, and telephone number of the petitioners representative, if any, which shall be the address for service purposes during the course of the proceeding; c) An explanation of how the petitioners substantial interests will be affected by the Order; d) A statement of when and how the petitioner received notice of the Order; e) Either a statement of all material facts disputed by the petitioner or a statement that the petitioner does not dispute any material facts; f) A statement of the specific facts the petitioner contends warrant reversal or modification of the Order; g) A statement of the rules or statutes the petitioner contends require reversal or modification of the Order; and h) A statement of the relief sought by the petitioner, stating precisely the action petitioner wishes the Department to take with respect to the Order.
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Formatted: Font: (Default) Times New Roman, 12 pt The petition must be filed (received) at the Department's Office of General Counsel, 3900 Commonwealth Boulevard, MS 35, Tallahassee, Florida 32399-3000 within 21 days of receipt of this notice. A copy of the petition must also be mailed at the time of filing to the District Office at the address indicated in Paragraph 35. Failure to file a petition within the 21-day period constitutes a persons waiver of the right to request an administrative hearing and to participate as a party to this proceeding under Sections 120.569 and 120.57, F. S. Before the deadline for filing a petition, a person whose substantial interests are affected by this Order may choose to pursue mediation as an alternative remedy under Section 120.573, F.S. Choosing mediation will not adversely affect such persons right request an administrative hearing if mediation does not result in a settlement. Additional information about mediation is provided in Section 120.573, Florida Statutes and Rule 62-110.106(12), F.A.C.
FOR THE COMPANY:
________________________ __________________________ DATE NAME
__________________________ TITLE
__________________________ COMPANY
__________________________ ADDRESS
DONE AND ORDERED this day of , 2014, in , Florida.
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Formatted: Font: (Default) Times New Roman, 12 pt STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION
____________________________
Filed, on this date, pursuant to Section 120.52, Fla. Stat., with the designated Department Clerk, receipt of which is hereby acknowledged.
______________________________ ___________________ Clerk Date
Copies furnished to: Lea Crandall, Agency Clerk Mail Station 35