Document BJD16GvRNajymp7DoJ515a84

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION6 1201 ELM STREET, SUITE 500 DALLAS, TEXAS 75270-2102 February 27, 2023 TRANSMITTED VIA EMAIL Robert Kna ppe Warrior Exploration & Production, LLC P.O. Box 711 Barnsdall, Oklahoma 74002 rknappe@ppcooil.com Re: Notice of Proposed Administrative Order and Opportunity to Request a Hearing Well Number: 3- 10 EPA Inventory ID: OS6I42000 Docket Number: SDWA-06-2023-I I 14 Dear Mr. Knappe: Enclosed is a Proposed Administrative Order (Proposed Order) that the Environmental Protection Agency (EPA) intends to issue to Warrior Explo ration & Production, LLC for violation of the Safe Drinking Water Act (SOWA). The violation was identified based on our review of fil es that we maintain on the referenced injection well. On September 12, 2012, injection Well No. 3-10 was due for a mechanical integrity test and failed to conduct it. T he Proposed Order does not assess a monetary penalty; however, it does require compliance with SOWA requirements. The Proposed Order requires the referenced injection well to comply w ith certain regulations. EPA requests that you immediately confirm receipt of this e-mai l and the attached Order by a response e-mail to Mr. David Aguinaga at agu inaga.dav id(@.epa.gov. You have the right to request a hearing regarding the violations alleged in the Proposed Order. Whether or not you request a hearing, we invite you to confer with us infornrnlly. Jf you choose not to request a hearing, we w ill review any comments on the Proposed Order received from you and the public and determine whether the Proposed Order will be issued as a Final Administrative Order. In the event you choose not to request a hearing within thirty (30) days of your receipt of this Proposed Order, and no public comments are received, EPA shall issue a Final Administrative Order regarding the vio lation(s) and requiring compliance with the SOWA regulations. Also enc losed is a n " Information Sheet" relating to the Small Business Regulatory Enforcement Fairness Act and a "Notice of Registrant's Duty to Disc lose" relating to the disclosure of environmental legal proceedings to the Securities and Exchange Commission. The EPA is comm itted to ensuring compliance with the requirements of the Underground Injection Control program, and my staff w ill assist you in any way possible. Re: Warrior Exploration & Production, LLC 2 SDWA-06-2023-1 11 4 If you have any questions or wish to discuss the possibil ity of a settlement of this matter, please contact Mr. David Agu inaga, of my staff, at (2 14) 665-6439. Sincerely, eI f. d <, "'o _;,._,,f..,,.,.- Digitally signed by Seager, Cheryl Date: 2023.02.27 14:15:02 -06'00' Cheryl T. Seager, Director Enforcement and Compliance Assurance Division Enc losures ec: Mr. Craig Walker, Osage Nation DNR Environmental Supervisor cmwalker@osagenation-nsn.gov Mr. Richard Winlock, BIA Osage Agency Acting Superintendent Richard.Winlock@bia.gov ~o ~,~ UNITED STATES ENVIRONMENTAL PROTECTION AG:kNCt " Li:. ' REGION 6 Dallas, Texas 75270 23 MAR -8 PM 12: 13 In the Matter of Warrior Exploration & Production, LLC Respondent. REG:Cr ::.1 1:c.A:<ING CLERK EP1\ REGlON VI Docket No. SDWA-06-2023-1114 PROPOSED ADMINISTRATIVE ORDER STATUTORY AUTHORITY The following findings are made, and Proposed Administrative Order issued, under the authority vested in the Administrator of the U.S. Environmental Protection Agency (EPA) by Section l423(c) ofthe Safe Drinking Water Act (the Act), 42 U.S.C. 300h-2(c). The authority to issue this Proposed Administrative Order has been de legated by the Administrator to the Regional Administrator of EPA Region 6 who further delegated such authority to the Director of the Enforceme nt and Compliance Assurance Division. The EPA has primary e nforcement . I responsibility for underground injection within the meaning of Section 1422(c) of the Ad, 42 U.S.C. 300h-1 (c), to ensure that owners or operators of Class II injection wells within Osage County, Oklahoma, comply with the requirements o f the Act. F INDINGS I. Warrio r Exploration & Production, LLC (Respondent) is a limited liability company1doing business in the State of Oklahoma and, therefore, is a " person," within the meaning of Section 1401(12) of the Act, 42 U.S.C. 300f(l2). 2. At all times relevant to the violations alleged herein, Responde nt owned or operated an " injection well" which is a "Class II well" as those terms are de fined at 40 C .F.R 147.2902. SDWA-06-2023- 111 4 Page 2 The injection we ll is located in the SE Quarter of Section 05, Township 23 North, Range 11 East, Osage County, Oklahoma, designated as injection Well No. 3-10 and EPA Inventory Num_ber OS6142000 (the injection well). 3. Respondent is subject to underground injection control (U IC) program requirements set forth at 40 C.F.R. Part 147, Subpart GGG, which are authorized under Section 1421 of the Act, 42 U.S.C. 300h. 4. Regulations at 40 C.F.R. 147.2903(a) require that any underground injection is prohibited except as authorized by rule or authorized by a permit issued under the UIC program. The construction or operation of any injection well required to have a permit is prohibited until the permit has been issued. The term 'permit" is defined at 40 C.F.R. 147.2902. 5. Regulations at 40 C.F.R. 147.2903(6) provide that no owner or operator sha ll construct, operate, maintain, convert, plug, or abandon any injection well, or conduct any other injection - activity, in a manner that allows the movement of fluid containing any contaminant into underground sources of drinking water (USDW), if the presence of that contam inant may cause the violation of any primary drinking water regulation under 40 C.F.R. Part 142 or may otherwise adversely affect the health of persons. 6. Regulations at 40 C.F.R. 147.2916 require the owner or operator of a new Class II injection well, or any other Class II injection well required to have a permit in the Osage Mineral Reserve, to comply with the requirements of 40 C.F.R. 147.2903, 147.2907, and 147.2918 through 147.2928. 7. On November I, 2007, EPA issued UJC permit number 06S 1261 P6 I42 (the permit) for the injection well and the permit became effective. SDWA-06-2023- 11 14 Page 3 8. Regulations at 40 C.F.R. 147.2925(a) require the permittee' to comply with all permit conditions, except as authorized by an emergency permit (described at 40 C F.R. 147.2906). 9. Regulations at 40 C.F.R. 147.2920(6) and Part 1.8. of the UIC permit require that the injection well have mechanical integrity and demonstrate mechanical integrity every 5 years. I0. On September 12, 2012, the injection well was due for a mechanical integrity" test and the test was not conducted. To date, the injection well has not successfully demonstrated mechanical integrity. 11 . On July 25, 2022, EPA emailed a letter to Respondent notifying Respondent that EPA determined that the injection well was overdue for a mechanical integrity test. The letter informed Respondent of the potential violations of the Act and the UIC program and that EPA can pursue enforcement actions in response to these violations. The letter also provided the Respondent an opportunity to confer with EPA in regard to this matter. 12. Therefore, Respondent violated regu lations set forth at 40 C.F.R. 147.2903(6), 147.2920(b) and Part l.B. of the permit by maintaining the injection well in a manner that could allow the movement of flu id that contains contam inants into an USDW and by failing to successfu lly demonstrate mechanical integrity. SECTION 1423(c) PROPOSED COMPLIANCE ORDER 13. Based on the foregoing findings, and pursuant to the authority of Section 1423(c) of the Act, 42 U.S.C. 300h-2(c), EPA Region 6 hereby proposes to order Respondent to: a. Cease use of the injection well for the unauthorized underground injection of fluids, and b. Take one of the fo llowing actions: SDWA-06-2023-111 4 Page 4 1. Repair the injection well and successfully demonstrate mechanical integrity according to regulations at 40 C.F.R. 147.2920 and Part't:B'.:M the permit within ninety (90) days after the effective date of a Fi nal Administrative Order; or 11. Complete proper plugging and abandonment in accordance with 40 C.F.R. 147.2905, within ninety (90) days after the effective date of a Final Administrative Order; or 111. Convert the injection well to production use within ninety (90) clays after the effective elate of a Final Administrative Order. 14. Submit copies of completed plugging reports or completed work reports showing_ in conversion to production and BIA Osage Agency Forms 139 within 120 days after the effective date of a Final Adm inistrative Order to: David Aguinaga aguinaga.clavid@epa.gov U.S. Environmental Protection Agency Water Enforcement Branch (ECDWE) NOTICE OF OPPORTUNITY TO REQUEST A HEARING 15. Respondent may request a hearing lo contest the issuance of the Final Administrative Order, pursuant to Section 1423(c)(3)(A) of the Act, 42 U.S.C. 300h-2(c)(3)(A). Such hearing shall not be subject to section 554 or 556 of Title 5 but shall provide a reasonable opportu nity to be heard and to present evidence. 16. A request for a hearing must be made within thirty (30) days of the date of receipt of th is Proposed Administrative Order. If you would like to request a hearing on this Proposed Administrative Order, submit the hearing request to the Regional Hearing Clerk (6ORC); U.S. Environmenta l Protection Agency, Region 6; 120 I Elm Street, Suite 500; Dallas, Texas 752702 102. SDWA-06-2023-1 11 4 Page 5 17. Should a hearing be requested, members of the public who commented on the issuance of this Proposed Adm inistrative Order during the public comment period would have a right to be heard a nd present evidence at a hearing under Section 1423(c)(3)(C) ofthe-~ ct, 42 U.S.C. 300h- 2(c)(3)(C). GENERAL PROVISIONS 18. Issuance of the Final Adm inistrative Order does not constitute a waiver, suspension, or modification of the requirements of 40 C.F.R. Parts 144, 146, and 147, S ubpart GGG, w hich remain in full fo rce and effect. 19. Issuance of the Final Administrative Order is not an e lection by EPA to forego any c ivil or criminal action otherwise authorized under the Act. 20. Violation of the terms of the Final Admin istrative Order after its effective date SY date of final judgment as described in Section 1423(c)(6) of the Act, 42 U.S.C. 300h-2(c)(6), may subject Respondent to further enforcement action, including a civ il action for enforcement of the Fina l Administrative Order under Section l423(b) of the Act, 42 U.S.C. 300h-2(b), and c ivil and criminal penalties for violations of the compliance terms of the Final Adm inistrative Order under Section l423(b)(I) and (2) ofthe Act, 42 U.S.C. 300h-2(b)(I) and (2). TAX IDENTIFICATION 21. For purposes of the identification requirement in Section I62(f)(2)(A)(ii) of the Internal Revenue Code, 26 U.S.C. I62(f)(2)(A)(ii), and 26 C.F.R. 1.1 62-2 1(b)(2), perfonnance of Paragraphs 13 and 14 is restitution, remediation, o r required to come into compIiance with the law. SDWA-06-2023-1114 Page 6 SETTLEMENT 22 . EPA encourages all parties against whom an administrative order is proposed to pursue the possibility of settlement through informal meetings with EPA. Regardless of whether a formal hearing is requested, Respondent may confer informally with EPA about the alleged violations. Respondent may wish to appear at any infonnal conference or formal hearing personally, by counsel or other representative, or both. To request an informal conference on the matters described in this Proposed Administrative Order, please contact David Aguinaga, of my staff, at (214) 665-6439 23. If this action does not proceed to a forma l hearing, EPA shall issue a Final Adm inistrative Order. EFFECTIVE DATE 24. The Final Administrative Order becomes effective thirty (30) days after issuance unless an appeal is taken pursuant to Section 1423(c)(6) of the Act, 42 U.S.C. 300h-2(c)(6). February 27, 2023 Date Digitally signed by Seager, Cheryl Date: 2023.02.27 14:12:29 -06'00' Cheryl T. Seager, Director Enforcement and Compliance Assurance Division Docket No.: SDWA-06-2023-111 4 Page 1of I. CERTIFICATE OF SERVICE I certify that the foregoing Proposed Administrative Order was sent to the fo llowing persons, in the manner specified, on the date below: Signed Original E-mai led: Regional Hearing Clerk (R6ORC) U.S. EPA, Region 6 120 1 Elm Street, Suite 500 Dallas, TX 75270 vaughn.lorena(a),epa.Qov File Stamped Copy Transmitted via Email: Robert Knappe Warrior Exploration & Production, LLC P.O. Box 7 11 Barnsdall, Oklahoma 74002 rknappe(a), ppcooi I.com Electronic Copy: Ellen Chang U.S. EPA, Region 6 1201 Elm Street, Suite 500 Dallas, TX 75270 Chang.El len(a),epa.gov Richard Winlock, Acting Superintendent Bureau of Indian Affairs, Osage Agency P.O. Box 1539 Pawhuska, OK 74056 Richard.Winlock@bia.gov Craig Walker, Environmental Supervisor Osage Nation Department of Natural Resources I00 W. Main, Suite 304 Pawhuska, OK 74056 cmwalker@osagenation-nsn.!.!ov Dated: March 2. 2023 Signed: David Aguinaga