Alta Mesa will pay less than half of the civil penalty fines originally proposed in a complaint filed in February by the Idaho Attorney General’s office on behalf of the Idaho Department of Lands.
State officials late last week reached a settlement with the state’s sole oil and gas producer for violating state regulatory rules while performing work on a natural gas well in Payette County. In the settlement agreement and consent order, AM Idaho, also known as Alta Mesa, admits to the violations. Those rules within the Idaho Oil and Gas Conservation Act were violated when Alta Mesa took steps to perform an acid treatment on the ML Investments 1-11 natural gas well in July of 2018 before getting approval.
According to the agreement with the Oil and Gas Conservation Commission, Alta Mesa has 30 days to meet its terms. Those include paying the civil penalties; retroactively applying for the well treatment as well as paying the $1,000 for the application; and handing over a report that Idaho Department of Lands officials have repeatedly requested since they discovered the violation in July of 2018. That’s when Alta Mesa sought last-minute approval to use 500 gallons of Xylene and 1,000 gallons of a mixture containing 15 percent hydrofluoric acid to treat a natural gas well. After IDL denied the work request, the company treated the well and notified the state via its attorney several days later.
An administrative complaint and notice of violation was filed by the Idaho Attorney General on behalf of IDL on Feb. 5, 2019. In that complaint, the state sought $20,000 in civil penalties. For the first violation, performing a well treatment before obtaining proper approval, the state sought $10,000. For the second violation, failing to timely submit a complete report on well treatment, the state also sought $10,000. However, in the settlement agreement the state agreed to accept a total $5,000 for the first violation and $3,000 for the second violation.
The settlement does not preclude Alta Mesa from its obligation to comply with local, state or federal law in the future.
Who’s checking the water?
Even if Alta Mesa had filed the permit required, nearby well owners weren’t quite close enough to be notified of the acid treatment used on the well. A-quarter mile or less is causal for notice to homeowners, well owners and public drinking water systems with a recognized source or protected area according to Idaho administrative rules. Those who receive such a notice are also supposed to be given an opportunity to request Alta Mesa pay for testing of their wells before or after the company treated its well.
According to information on record with the Idaho Department of Water Resources, which was emailed by Mick Thomas, division administrator, Oil & Gas and secretary to the Oil & Gas Commission, there are three private water wells located in a one-mile radius of the ML Investments 1-11 well, though none are closer than 2,200 feet (or about a-half mile).
Monitoring freshwater sources also falls under the responsibility of Alta Mesa, unless it is determined the proposed treatment doesn’t pose a threat.
As far as monitoring wastewater produced by Alta Mesa, IDL does not have the authority to do that, Thomas confirmed. That responsibility goes to Idaho Department of Environmental Quality Wastewater Program, which has oversight of disposal practices in order to protect public health as well as Idaho’s surface and groundwater resources.
“All produced water from the wells in Payette County is disposed of in a facility approved by IDEQ,” wrote Thomas. “Frequency of monitoring or testing of fluids received by the facility are determined by IDEQ.”
‘No hydraulic fracturing took place’
Because the “pressure was below the fracture gradient” in the application of the acid treatment to the ML Investments well, “no hydraulic fracturing took place,” according to Thomas’ email. Placing acid in the well does not make it an injection well either, he said.
In the case of ML Investments 1-11, Thomas pointed to matrix acidizing over fracturing.
“The use of acid in oil and gas exploration dates back over 120 years and is a routine procedure to remove deposits from well surfaces,” wrote Thomas. “Matrix acidizing is a stimulation process used to improve flow, or to remove damage. It does so by dissolving the sediments and mud solids within the pores, which stimulates the flow of hydrocarbons.”
“The industry has long employed acid stimulation to increase the performance of oil, water, or gas wells by removing the near-wellbore damage, which is the natural byproduct of drilling and production operations,” wrote Thomas.
Solutions which contain hydrochloric acid and hydrofluoric acid are often used to dissolve deposits, he said.
Decline in production
Overall, natural gas production on the Willow Field in Payette County appears to be slowing down with fewer and fewer wells in production. In January of 2018, Alta Mesa’s monthly report filed with IDL stated there were 207,830 units of natural gas taken from 12 wells; in January of 2019 that unit number dipped down by nearly half, with the company reporting 115,105 units produced by only four wells.
IDL requires operators such as Alta Mesa to report on the volumes of hydrocarbons and liquids produced from each well along with methods and location of disposal. Those reports are posted on the Idaho Oil and Gas Commission’s website.
According to Thomas, the department, which tracks production volumes and receives production reports per Idaho code, “has seen a reduction in overall field production.”
In reports on the commission’s website, several wells in Payette County are now listed as “shut-in,” including the Fallon and Barlow wells near the Payette River. A shut-in well is one that has been purposely closed off by the oil and gas producer in wells that begin producing water along with the oil or gas.