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Contractor pays reduced fine, leaves state after filter sock investigation

WILLISTON, N.D. - A contractor that stockpiled filter socks in McKenzie County last year paid a $16,000 fine, with $87,000 in fines dismissed, and agreed to no longer operate in North Dakota.

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Oilfield waste known as filter socks are shown stockpiled on trailers in McKenzie County in February 2014. The waste which contains low levels of radioactive material was not disposed of properly. (Submitted photo)

WILLISTON, N.D. – A contractor that stockpiled filter socks in McKenzie County last year paid a $16,000 fine, with $87,000 in fines dismissed, and agreed to no longer operate in North Dakota.

Continental Resources, the leading Bakken oil producer that hired RP Services, also received a notice of violation from the North Dakota Department of Health, but the department dismissed the violation last month and assessed no fines.

Meanwhile, state officials say North Dakota has had no more incidents of illegal dumping of filter socks since a new rule took effect last June. That rule requires companies to store the waste in special containers on site.

The investigation began in February 2014 when a citizen reported that dozens of bags of filter socks were piled on two flatbed trailers in rural McKenzie County and some of the waste was spilling onto the ground.

Filter socks, a waste product generated during oil and gas development, contain low levels of naturally occurring radioactive material and must be hauled out of state for disposal.

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The investigation showed that RP Services was not trying to hide the filter socks or get rid of them illegally, said Scott Radig, director of the health department’s Division of Solid Waste. The contractor intended to store the waste on the location until workers could have them disposed of properly, he said.

“They did a sloppy job of that and they admit that, but there’s no indication they were trying to hide them,” Radig said. “They were waiting until spring and they were going to take them to disposal.”

The investigation showed that Continental Resources contracted with RP Services to filter flowback water from hydraulic fracturing operations.

RP Services, which did not have a license to haul radioactive waste, stored the filter socks that resulted from those operations on the property it leased in McKenzie County. Best practices call for those filter socks to be stored in covered, leak-proof containers, which is what North Dakota now requires.

In its response to a notice of violation, Continental Resources disputes that RP Services stored or disposed of solid waste in violation of state rules. Continental writes that the site was an “intermediate staging area.”

Radig estimated that the filter socks had been accumulating at the McKenzie County site from summer 2013 until the citizen reported them in February 2014.

A health department inspector found that some of the socks were leaking onto the ground and had affected the soil, but the waste never posed a threat to the public, according to documents from the investigation.

The health department proposed a $103,000 administrative penalty for RP Services. All but $16,000, or 15 percent, was dismissed after the company agreed to settlement terms, which included properly cleaning up the waste and developing waste handling protocols and training.

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“Our general philosophy is that compliance is better than enforcement. Obtaining current and future compliance is more important than just collecting a penalty at the present time,” Radig said.

The state did not require in the settlement that RP Services cease operating in North Dakota, but the parties came to a mutual agreement that it would be better if the company is no longer active in the state, Radig said.

Health officials dismissed last month the notice of violation to Continental Resources, which was based primarily on the fact that RP Services did not have a license to haul radioactive material.

Previously, health officials had informed Continental that subcontractors that generate oilfield waste can transport that waste without a specific permit, Radig said. Because of the previous uncertainty about state rules and the steps Continental took to improve waste management practices and training, the health department dismissed the complaint, Radig said.

Calls to RP Services headquarters in Wyoming were not answered Tuesday. Continental representatives did not respond to an email Tuesday seeking a comment.

Previously, Continental had released a statement saying that the company “demands operational excellence” from its contractors and does not tolerate a contractor’s disregard for regulations.

Continental suspended RP Services as a contractor after learning of the investigation.

Rick Schreiber, director of the McKenzie County Waste Department, said the new state rule has greatly reduced the number of filter socks brought to the local landfill.

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But he said he thinks by reducing the fine, the state missed an opportunity to make a statement that oil and gas regulations will be strictly enforced.

“These were blatant issues. We always hear how the state is going to get tough and we’re going to enforce these regulations. Then when it comes down to brass tacks of it, the fines are negotiated down,” Schreiber said. “I’m glad they fined them something. But I definitely think the bark is bigger than the bite.”

The North Dakota Industrial Commission also received public criticism recently for how it reduced the fine for filter socks that were hidden in an abandoned gas station near Noonan.

In that case, the Industrial Commission initially proposed $800,000 in fines for Zenith Produced Water, which generated the filter socks but was not the company that illegally dumped the waste. The commission later reduced the fine to $170,000 because Zenith responded with information about how many filter socks it had generated and officials didn’t think the $800,000 fine would hold up in court, said spokeswoman Alison Ritter.

The commission then suspended $150,000 of the fine, or nearly 90 percent, and collected $20,795.

The settlement also requires Zenith to fully cooperate in an ongoing criminal investigation into the individuals who illegally disposed of the waste.

Both Radig and Ritter said they have not received illegal dumping reports since the new rule took effect June 1 requiring the filter socks to be stored in special containers.

“We really think it’s been effective,” Ritter said.

 

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