Pipeline leak in Piceance Basin prompts $5 million lawsuit

RBC I Mike Bishop is a jovial fellow with a quick wit, ready smile and lively sense of humor, until you ask him about the conditions on his Piceance Basin hunting ranch. Concern etches his features when he talks about the pipeline leak he discovered on his property a little more than a year ago.

Bishop has owned the 320 acres off County Road 5 since 1999. He built a cabin and has used the property for hunting and recreation for family and friends. A buyer and seller of airplanes, Bishop has his own grass airstrip and hangar, and has used the property for high altitude mountain flight training.
In May 2016, Bishop went up to turn on the cabin’s water for the summer season and noticed something unusual—the spring water that runs through his land smelled bad and the grass along the spring was brown.
On June 8, 2016, Encana Oil and Gas filed an initial spill/release report with the Colorado Oil and Gas Conservation Commission (COGCC) reporting a spill of produced water from a flowline of “more than five but less than 100 barrels” that impacted soil. A second report, filed by Hunter Ridge Energy Services LLC, a subsidiary of Encana, stated, “During an annual water sampling event on June 14, 2016, a discharge of hydrocarbon impacted water was identified within the East Stewart Spring. Condensate was identified to be seeping into the drainage at the spring’s discharge point.” The report states that the two private properties impacted had been contacted and that Encana was working with the owners.
Encana, in a statement sent to the Herald Times via email Aug. 23, wrote, “In June of 2016, during a routine inspection, we detected surface water in a drainage area that had been impacted by condensate near Encana’s former North Parachute Ranch property. We identified the source as a nearby A27 liquids line that had developed a pinhole sized leak. The leak was immediately taken out of service and has since been formally abandoned.”
According to Bishop’s attorney, Mark Mason, from the time the leak began—which cannot be determined—thousands of gallons of contaminated water ran downstream, collected in a stock pond, and from there drained through a faulty head gate into the Bishop property for at least nine weeks from the time of discovery until the head gate was repaired by Encana. Mason asserts that the incident was “a massive undetected release of hazardous waste involving an extended seep that increased in its flow and volume until it emerged from underground, not a ‘recent spill’.”
No reports are available for pressure tests on the faulty line for at least three years prior to the discovery of the leak.
As of June 2017, according to reports filed with COGCC, Encana had recovered 1,182 barrels (49,644 gallons) of condensate and/or produced water from the contaminated springs, surface and ground water in the path of the release and continue to recover up to two barrels (84 gallons) a day from the neighboring property above Bishop’s ranch.
The total amount of spilled contaminants is unclear.
In July 2016, Bishop agreed to give Encana a year to remediate the damage done to his property. Remediation is defined as “the action of remedying something, in particular of reversing or stopping environmental damage.”
In their email correspondence with the Herald Times, Encana representatives stated, “In consultation with the COGCC we are performing an environmental investigation and implementing a remediation plan.”
Reports on the COGCC website indicate water and soil sampling on the property performed by industry reflect elevated levels of total petroleum hydrocarbons, which are considered harmful to humans, wildlife and livestock.
Livestock on the neighboring property have been removed, and those property owners agreed to exchange their two sections (640 acres plus or minus) for 10 sections (6,400 acres) with Encana.
“The property line doesn’t stop the contamination,” Bishop said.
The statement from Encana sent to the Herald Times reads, “Based on our prompt response and considering the geologic conditions in the area of the release, the release impacted a relatively limited area of surface and subsurface.”
Hunter Ridge received a Notice of Alleged Violation (NOAV) from the COGCC in September 2016. The notice of violation alleges that Hunter Ridge failed to properly install, maintain and test the pipeline, and caused significant adverse impacts to waters of the state. Encana said, via email, they expect the violation “to be formally resolved in the coming weeks.”
In July 2017, Encana sold all of its Piceance Basin properties to Caerus Oil and Gas LLC for $735 million. As part of the purchase and sale agreement, Encana retained all liability associated with the condensate leak and the associated remediation obligation.
Bishop has filed suit in Rio Blanco County District Court against Encana and its subsidiaries for failing to satisfactorily remediate the damages incurred to his property. Bishop was in the process of selling the property to an acquaintance for $5 million when the leak was discovered. That sale did not go through because of the contamination.
“This isn’t about the money,” Bishop said. “It’s about being good stewards of the land. I tried to help them. This isn’t something I want to do. I’m not fighting for me. What about when the contamination spreads to our water supply?”
Bishop is not opposed to oil and gas development. He said he has a good relationship with another energy company that has a pipeline running through his property. He is, however, opposed to irresponsible oil and gas development.
“If we go pour oil in the river, we go to jail. If a corporation does it, they’re above the law?” Bishop said.

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