Current through Bulletin 2024-18, September 15, 2024
1.
General. Any person who violated Title 40, Chapter 6, Board and division of
oil, gas and mining, or a division rule, order or permit may be subject to an
administrative penalty.
2. Maximum
Administrative Penalty Amounts.
2.1. An
administrative penalty on any person may not exceed $5,000 per day for each day
of a violation.
2.2. If the board
determines that a violation is a willful violation, the board may impose an
administrative penalty on that person not to exceed $10,000 for each day of the
violation.
2.3. Administrative
penalties assessed by the division or the board may not exceed $200,000 per
violation per person.
3.
Days of Violation. The duration of a violation shall be calculated in days as
follows:
3.1. A reporting or other minor
violation that presents low direct risk or threat of harm to public health,
safety, and welfare, or resource detriment, begins on the day that the report
should have been made or other required action should have been taken, and
continues until the report is filed or the required action is completed to the
division's satisfaction.
3.2.
Violations that present a possibility of distinct, identifiable actual or
threatened adverse impact, or violations that present a significant probability
of actual or threatened adverse impact, begin on the date the violation was
discovered or should have been discovered through the exercise of reasonable
care and continue until the appropriate corrective action is completed to the
division's satisfaction.
4. Penalty Calculation. The base penalty for
each violation shall be calculated based on the division's penalty schedule.
Each violation is initially assessed at the minor violation rate, but may be
escalated to the major violation rate in accordance with Section
R649-11-3.
5. Issuance of Proposed
Assessments.
5.1. If a violation is not
abated prior to the end of the abatement period specified for that violation,
the division shall issue a proposed assessment to the person containing the
penalty amount after the abatement period ends.
5.1.1. Failure by the division to serve a
proposed assessment within 30 days will not be grounds for dismissal of any
part of such assessment unless the permittee or operator:
5.1.1.1. proves actual prejudice as a result
of the delay; and
5.1.1.2. makes a
timely objection to the delay.
5.2. Upon abatement of the violation, or when
the maximum penalty amount has been reached, the division will issue a final
assessment to the person containing the final penalty amount.
5.2.1. Failure by the division to serve a
final proposed assessment within 30 days will not be grounds for dismissal of
any part of such assessment unless the permittee or operator:
5.2.1.1. proves actual prejudice as a result
of the delay; and
5.2.1.2. makes a
timely objection to the delay.
6. Violations Designated as Class 1.
6.1. Violations that present a low direct
risk or threat of harm to public health, safety and welfare, or present a low
direct risk of resource detriment, including:
(a) Section
R649-3-1 bonding
violations;
(b) Section
R649-3-36 shut-in and temporarily abandoned wells violations;
(c) Section
R649-3-15 pollution and surface damage violations;
(d) Section
R649-3-34 well site restoration violations;
(e) Section
R649-3-16 reserve pit closure violations;
(f)
Rule R649-8 reporting violations;
(g) Section
R649-9-2 improperly secured disposal facility violations;
(h) Section
R649-9-2 minor leaks and spills violations;
(i) Section
R649-9-3 garbage and solid waste in evaporation pit violations;
(j) Section
R649-9-3 inadequate supervision violations;
(k) Section
R649-9-4 failure to monitor leak detection system violations;
(l) Section
R649-9-10 inadequate construction notification violations;
(m) Section
R649-9-11 facility records for review violations; and
(n) any other violation listed in Title R649
or Title 40, Chapter 6, Board and Division of Oil, Gas and Mining.
7. Violations Designated
as Class II.
7.1. Violations that present a
possibility of distinct, identifiable, actual or threatened adverse impacts to
public health, safety, and welfare, or resource detriment, including:
(a) Section
R649-3-22 commingling without approval;
(b)
Section
R649-3-23 completion/recompletion without approval;
(c) Section
R649-3-32 not
reporting an incident;
(d) Section
R649-3-20 flaring or venting without approval;
(e) Section
R649-3-23 and
R649-3-4 not adhering to the approved procedure or conditions on an APD or sundry
notice;
(f) Rule R649-5 and R649-9
violation of permit conditions, such as UIC or facility;
(g) Section
R649-5-2 injecting over approved pressure;
(h) Section
R649-9-4 less than 2 feet freeboard;
(i)
Section
R649-9-4;
(j) Section
R649-9-5;
(k) Rule R649-8 false reporting;
and
(l) any other violation listed
in Title R649 or Title 40, Chapter 6, Board and Division of Oil, Gas and Mining
that presents a possibility of distinct, identifiable, actual or threatened
adverse impacts to public health, safety and welfare, or resource
detriment.
8.
Violations Designated as Class III.
8.1
Violations that present a significant probability of actual or threatened
adverse impact to public health, safety, and welfare, or resource detriment,
including:
(a) Section
R649-3-4 drilling or spudding without an approved permit;
(b) Section
R649-3-24 P&A without approval;
(c)
Section
R649-3-15 disposal of fluids in unapproved or improper facility or by improper
method;
(d) Rule R649-5 injection
into reservoir or formation without approval;
(e) Section
R649-9-3 facility operating without a permit;
(f) Section
R649-9-4 pits overtopped;
(g) Section
R649-9-4 breached pit; and
(h) any other
rule violation listed in Title R649 or Title 40, Chapter 6, Board and Division
of Oil, Gas and Mining that presents a significant probability of actual or
threatened adverse impact to public health, safety and welfare, or resource
detriment.
9.
Administrative Penalty Schedule.
9.1. Penalty
Schedule. The division's penalty schedule establishes a daily penalty based on
the classification of the rule violation, Class I, II, or III as provided in
Subsection (6), (7), and (8), and the degree of actual or threatened adverse
impact resulting from the violation, minor or major as provided in Subsections
(9.2) and (10).
TABLE
9.1.1. Daily Penalty Schedule
|
Violation |
Class I |
Class II |
Class III |
|
Degree: | | | |
|
Minor |
$750 |
$1,500 |
$5,000 |
|
Major |
$1,500 |
$5,000 |
$10,000 |
9.2.
Degree of actual or threatened adverse impact. A minor violation and associated
penalty amount may be increased to a major violation and penalty amount based
on the degree of actual or threatened adverse impact to public health, safety
and welfare, or resource detriment resulting from the violation. The division
shall determine the degree of actual or threatened adverse impact to public
health, safety, and welfare, or resource detriment, based on the totality of
circumstances in each case that may involve increasing a Class I violation to a
Class II or Class III violation, or increasing a Class II violation to a Class
III violation.
10.
Penalty Adjustments based on Aggravating and Mitigating Factors. The division
shall consider aggravating and mitigating factors when determining if a
violation is minor or major. These factors shall include:
10.1. Aggravating factors:
10.1.1. The violation involved a substantial
departure from the standards of ordinary care of a reasonable prudent
person.
10.1.2. The violation was a
willful violation.
10.1.3. The
violation had a significant negative impact on human health or resource
detriment.
10.1.4. The violation
resulted in significant waste of oil and gas resources.
10.1.5. The violation had a significant
negative impact on correlative rights of other parties.
10.1.6. The violator was nonresponsive to the
division in correcting or responding to the violation.
10.1.7. The violator benefited economically
from the violation, in that case the amount of such benefit shall be taken into
consideration.
10.1.8. The violator
has a history of previous violations at the particular well or
facility.
10.2.
Mitigating factors:
10.2.1. The violator
self-reported the violation.
10.2.2. The violator demonstrated prompt,
effective and prudent response to the violation, including assistance to any
impacted parties.
10.2.3. The cause
of the violation was outside of the violator's reasonable control and
responsibility.
10.2.4. The
violator made a good faith effort to comply with applicable requirements prior
to the division learning of the violation.
10.2.5. The violator has demonstrated a
history of compliance with division rules, orders, and permits.
10.2.6. The violator has not been served with
a notice of violation within the twenty-four-month period prior to the subject
violation at issue.
11. Repeat Violations. The division shall
consider the history of previous violations at a particular well or facility
when determining an appropriate administrative penalty. If the person has three
or more violations of the same minor violation in the twenty-four-month period
immediately preceding the violation at issue, the minor violation shall
escalate to a major violation.
12.
Unabated Violations. The division may request an emergency order from the board
requiring well or facility operations be suspended for any unabated violation
where the maximum penalty amount has accrued. Operations may only resume upon
abatement of the violation and payment of the penalty.
13. Appeals. A notice of violation, division
enforcement order, or administrative penalty assessment issued by the division
may be appealed by filing a request for agency action with the division within
30 calendar days of the assessment following the procedures provided in Section
R649-10-2.
